Your Business Outlook - November 2006

Mastiogale’s 2005 polyethylene film market study forecasts North American consumption of PE food-packaging films this year at 2.93 billion lb, representing 17% of total PE film resin usage.

Mastiogale’s 2005 polyethylene film market study forecasts North American consumption of PE food-packaging films this year at 2.93 billion lb, representing 17% of total PE film resin usage. PE food packaging films include wrappings for baked goods, candy, cheese, meat, seafood, and poultry; fresh produce bags; self-serve and wet-pack bags; bag-in-box liquid packaging; boil-in bags; deli bags and wrap; carton liners and slug wrap; snack-food packaging; and frozen-food packaging and ice bags. With an average annual growth rate (AAGR) of 4.9%—larger than anticipated growth in gross domestic product (GDP)—PE film processors predict that this packaging sector will reach 3.4 billion lb by 2008.


Meat wraps top the charts

Meat, seafood, and poultry film has the highest expected growth rate (5.9%/yr) and is the largest segment of PE food-packaging film. It reached 695.1 million lb in 2005 and is expected to hit 826.1 million lb by 2008. Meat and poultry film alone grew nearly 38% in the last three years, and some producers had 10% to 15% annual growth.

Frozen-food packaging and ice bags make up the second-largest PE food-film segment at 439.4 million lb. With a modest AAGR of 5.4%, it will reach 515.9 million lb by 2008.

At 427.4 million lb, baked-goods film is expected to grow 4.2%/yr, adding 57 million lb by 2008. Film producers are caught between high resin prices and major retailers reluctant to accept price increases. This squeeze has forced some smaller extrusion companies out of business.

Fresh-produce bags and self-serve/wet-pack bags consumed 382.1 million lb of PE in 2005. With an AAGR of 5%, they should reach 443.2 million lb by 2008. Film extruders have enhanced the breathability of PE films to preserve the flavor, appearance, and texture of fresh produce.

Pouches are another dynamic PE food-film market, which is expected to grow 5.1% annually, pushing consumption from 201.4 million lb in 2005 to 234.2 million lb by 2008.

Carton liners and slug wrap use 196.1 million lb. With an AAGR of 3.9%, they could reach 220 million lb in the next few years.

PE cheese wrap hit 168.2 million lb in 2005, and an AAGR of 5.2% will take it to 195.9 million lb by 2008. Mexican cheeses, specialty cheeses such as pepper jack, low-fat, and shredded varieties continue to fuel growth in cheese sales and packaging. Film makers are also gaining market share through im proved barrier properties.

Manufacturers of bag-in-box packaging processed 163 million lb of PE resin last year. With an AAGR of 3.3%, consumption will reach 180 million lb by 2008. Europe and North America are the largest consumers of bag-in-box, but growth is expected in Asia and South America.

Snack foods consumed 135 million lb of PE last year. An AAGR of 4.4% will raise that to 153.9 million lb in 2008. Health-conscious consumers are creating a new market segment of natural/organic snacks such as reduced-fat potato chips and low-salt snacks.


Smaller segments

PE candy film represented 58 million lb last year and is expected to continue to grow 4.3% annually. Diet candy is experiencing strong growth, more than doubling in sales this year.

Producers of deli bags and wrap consumed 38.8 million lb of PE and have the lowest AAGR of 2.2%. Volume should grow to 41.5 million lb by 2008.

Another small PE food-film market is boil-in bags—only 29.8 million lb. They are expected to reach 33.6 million lb in 2008 with an AAGR of 4%. Restaurants and other food-service institutions use boil-in bags extensively.


Mastiogale, with offices in Houston and St. Joseph, Mo., is 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