In the study – The Future of Global Flexible packaging to 2016 - the industry analysts said growth in the sector has been driven by its use in replacing traditional packaging materials such as metal cans, glass, cartons and plastic bottles across a wide range of end uses.
The corporate sector is also experiencing a fundamental shift with the historically fragmented nature of the market becoming more consolidated. Future growth of industry players is more likely to be through acquisition rather than organic growth, said the UK-based consultancy.
Flexible packaging has also benefited from the explosion in new products from brand owners. The study notes that barrier flexible packaging will continue to gain in importance as major retail chains demand longer shelf life and greater protection for products – with materials such as BOPET, EVOH and PA demonstrating highest growth.
"Brand owners value flexible packaging for its versatility, comparative low cost and potential for innovation,” said Adam Page, Pira’s head of reports “It is also a lighter-weight pack format, a key attribute given the growing importance being attached to carbon footprint analysis and the environmental impact of packaging."
The research also highlights downgauging in flexible packaging as a “key trend” given that high polymer prices are triggering customer demands for thinner films.
Asian growth
Markets in Western Europe and North America are characterized as mature with major growth forecast in developing markets - particularly Asia.
In Western Europe, sales are projected to increase from $18.5bn in 2011 to $20.7bn in 2016, while those in North America are set to rise 2.4 per cent per year to $14.8bn. European volumes are expected to inch up from just under 4.9m tonnes to 5.3m tonnes over the next five years. North American growth will be similar – rising from 3.7m tonnes to 4.1m tonnes in 2016.
By contrast Asian sales are predicted to jump 6.1 per cent annually from $18.3bn to $24.6bn over the review period – with consumption forecast to jump by almost 50 per cent to reach 7.6m tonnes. Some 55 per cent of global growth is expected in the region.
Asia currently holds the largest regional share of flexible packaging at 29 per cent, followed by Western Europe on 27 per cent and North America at almost 21 per cent.
Central and Eastern Europe will see sales climb by $500m to just over $3bn, with consumption increasing 300,000 tonnes to reach almost 1.6bn tonnes by 2016.
The report said the US will remain the largest national market for flexibles, while China is forecast to leapfrog Japan into second place during the period.
India and China are highlighted as the fasted expanding national markets – accounting together for 44 per cent of growth in the world growth.
End-use sectors
Food and drink will account for around 75 per cent of the forecast global flexible packaging consumption of 22.7m tonnes by 2016 – with meat, poultry and fish the largest end-use markets at a combined total of almost 3m tonnes. This is followed by confectionery at over 2m tonnes and bakery just under 2m tonnes.
Industry consolidation
Pira said the traditional fragmented nature of the flexible packaging industry had undergone some change as consolidation produced a number of major players.
Amcor is now the dominant force in the sector since its takeover of Alcan in 2010 with a European market share of almost 25 per cent.
“As the leading European converters are too small to challenge Amcor since its expansion, more consolidation is likely,” said the analysts.
They added: "The strategic focus of suppliers is likely to shift from organic growth, rationalization and cost cutting to growth by acquisition.”
The Future of Global Flexible packaging to 2016 is available from Pira International