Your Business Outlook - March 2002

 Mastio & Company's latest blow molding market study forecasts continued strong growth for consumer packaging. Liquid foods, dairy products, juices, water, soft drinks (carbonated and non-carbonated), dry foods, cosmetics and other personal-care items, and pharmaceutical/health-care products are everyday necessities for which demand has not been affected by the current economic slump. At 6.6 billion lb in 2001, blow molded consumer packaging represents approximately 60% of total blow molding resin consumption. With an average annual growth rate of 7.5%, consumer packaging is anticipated to surpass 9 billion lb by 2005.

The food-packaging segment, which embodies 80% of consumer blow molding, represents even greater opportunities for processors. This market is forecasted to grow at an average rate of over 8%/yr, while non-food uses within consumer blow molding are growing at a slower rate—around 6%/yr—because displacement of glass and metal and other more traditional materials is further developed in these markets.

 

Where the ‘juice' is

Growth in the juice and non-carbonated sports-drink market is setting a blistering pace, thanks to the advent of heat-set PET containers. We forecast at least 10% average annual increases for the next five years. One interesting product within this market segment is baby juice bottles, which are moving from glass to polypropylene. Gerber, for example, distributes its plastic bottles through grocery and discount stores.

Plastic beer bottles are a great stadium package, and their growth potential is enormous. In fact, there is not enough current PET resin supply to support this market if plastic beer bottles take off like soda or water bottles did. (If you think that's unlikely, keep in mind that industry analysts 25 years ago were not overly optimistic regarding the potential of plastic soda bottles, either.)

The dairy market also has great growth potential for blow molders. What's exciting here is the emerging growth of the offset-neck bottle and single-use dairy container. We believe that demand for blow molded dairy packaging will increase to over 1.4 billion pounds by 2005, with an average growth rate approaching 7%/yr.

Liquid food is another area worth consideration by blow molders. One of the fastest-growing products in this area is containers for salad dressing and condiments. This is due to a combination of new coextrusion technology and bottle designs, plus the advantages of replacing glass with an unbreakable container. Liquid-food packaging is projected to average more than 6% annual growth over the next five years.

 

PET eats into PE, PVC

HDPE and PET still represent the major resins used for blow molded consumer packaging. For the near term, PET bottle markets are expected to continue their double-digit growth of the last few years. PET is still capturing market-share from glass bottles. For example, the milk and juice bottle markets are still trying to catch up with the success of the single-serve soft-drink and water bottles. PET is also displacing resins such as HDPE in personal-care containers because of its superior clarity. Some predictions see PET consumption approaching 6 billion lb by 2005.

Despite some inroads by PET, HDPE remains the largest-volume resin for consumer blow molding. HDPE usage dropped 4% to 5% in 2001 but was still well over 4 billion lb. Many HDPE resin suppliers forecast no real growth in blow molding consumption this year. However, several large processors are more optimistic and anticipate HDPE will reach 6.5 billion pounds by 2006.

Several processors that contribute regularly to our surveys are substituting PET for PVC resin to achieve improved clarity and "environmental friendliness." Many processors are using PET in multi-layer bottles as well, which should further accelerate PET's growth.

Mastio & Company, based in St. Joseph, Mo., is a well-known 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.mastio.com/pt/outlook.html.