Paper versus Plastic in Packaging to 2012

According to a new study from The Freedonia Group, US demand for plastic packaging will continue to outpace paper in markets where they compete, albeit more slowly as applications mature. The fastest market share increases for plastic will occur in pet food and soy beverage packaging, followed by protective packaging, foodservice and dairy products, among others.

In selected packaging markets where paper and plastic compete, plastic’s overall volume share will continue to expand, reaching 49% by 2012. This percentage understates plastic’s share since less plastic is required than paper in most applications due to its lighter weight. Plastic’s share of the market will expand more slowly than in the past decade, as a number of packaging applications are now fairly mature in terms of the share controlled by plastic. Nonetheless, material enhancements that enable extended shelf life and increased durability, along with reduced material requirements and the addition of convenience features such as resealability and steam cooking, will fuel continued opportunities for plastic packaging.

Plastics’ competitive cost and performance advantages to spur growth

Plastic packaging growth is forecast to outpace that of paper packaging through 2012 in all competitive markets covered in this study and is projected to climb 2.4 % per year through 2012. Advances will result from plastic’s competitive cost and performance advantages, including light weight, moisture resistance, enhanced barrier properties and puncture resistance. Other factors supporting gains include increased consumer spending, and favorable outlooks for foodservice revenues and Internet commerce. The fastest market share increases for plastic will occur in pet food and soy beverage packaging, with good opportunities also anticipated in protective packaging, foodservice, dairy product, fruit beverage and frozen food applications.

Slowest volume advances for plastic will occur in relatively saturated markets such as milk and baked goods, though plastic will log more rapid growth in smaller sized milk bottles, driven by conversions from gabletop cartons in schools and quick service restaurants.

Additionally, below-average growth for plastic in retail bags will be the result of environmental concerns and/or legislative restrictions that will negatively impact consumption. Plastic demand in the detergent market will post an outright decline, the result of the shift to more concentrated liquid formulations that use smaller bottles.

Paper packaging to grow slowly or decline in competitive markets

Due to inroads by plastic, paper consumption in most of these 17 markets will post marginal gains or continue to decline through 2012. In a few markets (soy beverages, foodservice, protective packaging, frozen food, dairy products, and meat, poultry and seafood) paper demand is expected to climb above the average pace despite further inroads by plastic.

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