Market Trends of US Packaging Industry
This section covers the major market trends shaping the US Packaging Market according to our research experts:
Paper and Paperboard Vertical to Hold Significant Market Share
- Due to supply-chain constraints, the region's inventory of packaging materials has become increasingly limited, resulting in shortages of everything from household products to electronics to food. Due to the rise in e-commerce, low containerboard and corrugated cardboard inventory have been a growing problem since the pandemic. As supply concerns mounted, merchants like Amazon began storing cardboard in January to fulfill demand, leaving smaller firms without supplies.
- According to the Producer Price Index and the US Bureau of Labor Statistics, the price of cardboard hit a new high in February 2021. In July 2021, International Paper, one of the country's top suppliers of containerboard and corrugated cardboard, warned investors that the supply of cardboard boxes was "very low," with supply chain bottlenecks continuing into the rest of the year.
- E-commerce has been one of the leading drivers of corrugated boxes. The market witnessed a rapid spike in demand in March 2020, tailed off in April and May; however, it then increased in June and reached record levels again in September and October.
- The region has witnessed several strategic acquisitions and partnerships with the increased demand for corrugated packaging solutions. For instance, in July 2021, Bio PAPPEL acquired McKinley Paper Company. With this acquisition, McKINLEY may achieve an efficient integration and broad geographic coverage by operating eight modern industrial paper and packaging plants in California, Washington, New Mexico, Georgia, Indiana, and Baja California, Mex. Further, it may soon operate a new packaging plant in Dallas, Texas, currently under construction.
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Increased Demand For Flexible Plastic Packaging Solutions Across the End-user Industry
- The flexible plastic packaging solutions demand has been experiencing a positive demand across the end-user industry sectors, such as in food, retail, consumer goods, pharmaceuticals, etc., in the country. The demand has been catalyzed by the continued rise in the levels of urbanization, a large expatriate population, and changing dietary habits of the resident citizens. The increasing penetration of e-commerce and the country's processed and packaged food market is currently exhibiting strong growth.
- The attempt of the government to diversify their economic dependence on the oil and gas industry has seen them supporting the real estate developments and has resulted in the increased opening of retail markets and is expected to provide the push in the market for new opportunities for plastic packaging with new demand from such sectors.
- Flexible plastic packaging is considered the right choice due to cost-effectiveness and increased shelf-life of the product, downsizing of packaging, rising demand from end-users, and improvements in global manufacturing activities. The developments in the healthcare, pharmaceuticals, and cosmetics market are expected to remain the primary drivers of the demand for plastic packaging products.
- Flexible packaging plays a pivotal role in reducing beverage and product waste and allows online brands to reinvigorate their packaging to enhance the e-commerce experience. For instance, Emerald Packaging, a US-based flexible packaging converter, launched a bag for potatoes manufactured partly from potato starch. The film is 25% potato starch resin and 75% low-density polyethylene mixture. Emerald claims the film is stronger than 100% low-density polyethylene (LDPE) films.
- Amazon's packaging transition is a boost for the US flexible plastics industry. The company currently controls just over 49% of the US e-commerce market and nearly 5% of the total US retail market and generated sales of over USD 250 billion in 2018. Flexible materials are extensively used in the food and soft drinks industries in the United States, where many consumers actively seek quick and easy solutions that align with their time constraints.
