Mastio & Company’s most recent Injection Molding Markets Study reports modest but respectable growth for 2008. Based on interviews with North American molders, the study includes seven major packaging and disposable market segments—food packaging; lids, caps, closures, overcaps and packaging dispensers; preforms; pails; pharmaceutical vials and containers; cosmetics and personal-care items; disposable cutlery, bowls, cups, and plates. Collectively, these segments consumed just over 7.3 billion lb of resins in 2007. They are forecasted to surpass 8.6 billion lb by 2010, with an average annual growth rate (AAGR) of 5.7%.
High resin prices, imports and production shifts from the U.S. and Canada, and the weakening economy were negative factors often mentioned by injection molders participating in the study. High resin prices have caused more offshore competition, forcing several molders to purchase resin overseas to help lower their costs. Most molders have raised their prices to pass on some of the resin price increases to their customers. However, in order to stay competitive, most molders try to absorb as much of the escalating resin cost as possible, resulting in lower profits.
Many study participants feel that imported packaging has had minimal impact on those market segments. The inability of end-use customers to verify or control adherence to FDA manufacturing standards, coupled with dissatisfaction over the quality of some imported products, has caused a number of packaging buyers to return to North American sources.
Nonetheless, imports are a significant factor for some personal-care items; disposable cutlery, plates, and bowls; and lids, caps, and closures remains a standard practice in these markets. A few injection molding participants have moved some or all of their personal-care and cosmetics production to Mexico or the Pacific Rim countries. The high costs of labor and resins have made it very difficult for North American makers of disposable cutlery, plates, and bowls to compete effectively against imports in this low-tech, commodity market. This sector has the lowest growth forecast (see table).
Participants in study acknowledge that the economy does affect their packaging and disposable production. When the economy is slow, consumers have less buying power. They cut back on outdoor activities and purchases, they travel less, and they tend to prepare more meals at home, thus increasing sales of food products packaged in consumer-sized containers. On the institutional side, when the economy is strong, consumers tend to increase dining in restaurants, thereby increasing demand for injection molded food-service items and containers utilized by commercial food establishments.
With all of this in mind, molders expect conservative but decent growth in most injection molded packaging and disposables market segments. Food packaging will see growth similar to the overall average. With the growth of single-parent and dual-income families, many consumers have less time to cook. Injection molded food-packaging and food-service business has doubled in recent years, and the home meal-replacement trend has swept the food-service industry. Home-meal replacement encompasses any kind of carry-out food from restaurants, delicatessens, bakeries, salad bars, and fast food restaurants. To accommodate today’s busy consumers, food-service companies are finding more ways and more places to offer their products. Mini outlets are appearing in malls, airports, gas stations, hospitals, retail chains, schools, and superstores.
Meanwhile, the injection molded preform market will be not only the largest sector, but the one with fastest growth, as new multi-layer preform technology fosters additional PET bottle applications. The most recent multi-layer PET bottles for distilled spirits, beer, and wine should experience rapid growth throughout the next few years. Furthermore, the increasing numbers of health conscious consumers contribute to growing demand for PET juice and water bottles. Flavored water, fruit-flavored tea, sports drinks, and coffee beverages also have increased demand for injection molded preforms.
The aging U.S. population, swelled by Baby Boomers, will ensure growth for pharmaceutical vials and containers and personal-care and cosmetics products designed to disguise the effects of aging. Annual growth in these two segments is forecasted to be around 3%.
Injection and compression molded lids, caps, closures, overcaps, and dispensers should continue to experience moderate growth (around 4%/yr) because today’s busy consumers demand convenience. Dispensing closures and flexible lids are popular for this reason, as they are easy to open and close. They are also popular with aging adults, who may experience difficulty with more complicated types of closures.
Pails are used to package a wide variety of commercial and industrial products, including hazardous and non-hazardous liquids, semi-liquids, pastes, and powders. Most participants in this market segment said the slow economy during 2007, coupled with the downturn in the new housing market, has kept growth sluggish. This is the second-slowest growing segment in this market study. However, the slowdown in new housing has been partially offset by more consumers remodeling their existing homes.
|INJECTION MOLDED PACKAGING & DISPOSABLES IN NORTH AMERICA, 2007-2010|
Average Annual Growth Rate, %
2007 Consumption MM lb
|Lids, Caps, Closures, Overcaps, Dispensers|
|Disposable Cutlery, Bowls, Cups & Plates|
|Cosmetics & Personal Care|
|Pharmaceutical Vials & Containers|
Bart Thedinger is managing partner of Mastio & Company in St. Joseph, Mo., a consulting firm specializing in industrial-consumer opinion research and market trends in the plastics industry. For more information, call (816) 364-6200 or visit www.mastiogale.com