Market Trends of North America Plastic Caps and Closures Industry
This section covers the major market trends shaping the North America Plastic Caps & Closures Market according to our research experts:
Polyethylene Terephthalate (PET) is Expected to Witness Significant Growth
- Polyethylene terephthalate (PET) is often used in food packaging due to its strong barrier properties against water vapor, gases, dilute acids, oils, and alcohols. PET is also shatter-resistant, moderately flexible, and easy to recycle. According to Earth Day organizers, 1 million plastic bottles are purchased in the US every minute. An average American consumes 167 plastic bottles of water per year; owing to the demand for packaged drinking water in the region, there is a rising demand for plastic caps and enclosures, especially PET.
- The majority of soft drinks are packaged in bottles made from polyethylene terephthalate (PET), as PET is good at retaining CO2. PET also found its applications in markets, such as fruit juice packaging and sports drinks, and it is also used in bottles for cooking and salad oils and sauces.
- Additionally, the rising health and wellness trend, owing to the growing obese population and diabetics in various countries, such as Canada, are anticipated to drive the demand for healthy drinks, in turn, increasing the demand for fruit drinks, energy drinks, etc. influencing the plastic caps and closures market.
- The increase in the demand for PET caps and closures is also a consequence of the rise in PET packaging, such as containers, bottles, tubes, cans, etc. According to International Bottled Water Association (IBWA), the volume of bottled water packaged in Polyethylene terephthalate (PET) plastic grew by 4.76% in the year 2020. It is now at 10.6 billion gallons. However, the home and office delivery volume experienced a decrease of 3.41 % (is now at 1.4 billion Gallons), likely due to office closures that occurred during the COVID-19 Pandemic.
- With this growing trend of recyclability, even food and drink companies, such as Nestlé, are focusing on increasing recycled PET content for all its products between 2020 and 2025. Aside from PET, most plastics are difficult to recycle for food packaging, leading PET to become a significant food-grade recycled plastic. Thus, the potential adoption of recycled PET among other companies is poised to impact the demand for plastic caps and closures.
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Beverage Segment is Expected to Hold a Major Share
- As the North American beverage market is growing, owing to the high consumption of wines and beer, the packaging components and materials also add value through product differentiation. The United States is the top most consumer of wine, with a 15% global share.
- Various companies in the region are manufacturing plastic caps and closures based on the requirements of government regulations to increase sustainability. Bottled water not only has become the largest application for plastic closures, but it also promises and the greatest growth opportunities through 2021 with the increasing concerns over the safety and hygiene of drinking water.
- Most bottled water companies package their products using plastic containers. According to the International Bottled Water Association (IBWA), Plastic containers comprise 97.3% of the bottled water market. Plastic bottled water containers are made from polyethylene terephthalate (PET), polycarbonate (PC), and high-density polyethylene (HDPE) plastics. PET accounts for 78.8% of plastic water bottles, PC for 12%, and HDPE for 9.2%. This shows the increasing acceptance of Caps and closures in the bottled water industry in the studied market.
- Furthermore, plastic bottle usage skyrocketed in carbonated soft drinks (CSD), which have reached saturation in the North American region. Companies like Coca-Cola, Pepsi, and Keurig Dr Pepper, have reported flat sales from their carbonated software division in North America. These three have a combined market share of more than 80% in the North American market, according to the estimates made by Coca-Cola in its annual report. Thus, increasing demand for plastic bottles is driving the growth of the plastic caps and closure market in the North American region.
- Also, to increase productivity, various players are planning to build manufacturing facilities in the United States. For instance, Switzerland-based Corvaglia Group created a new manufacturing facility in the US. The company delivers plastic cap and closure technology solutions to the global beverage industry. It is a vertically integrated supplier of caps and closures for PET (polyethylene terephthalate) containers. The company manufactures lightweight, one-piece caps and closures for the North American beverage market.
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