SOURCE: Freedonia Group, Inc.

March 06, 2007 11:37 ET

Demand for Paper & Plastic Packaging in Competitive Markets to Exceed 25 Billion Pounds in 2010

CLEVELAND, OH -- (MARKET WIRE) -- March 6, 2007 -- In 18 selected markets in the U.S. where plastic and paper compete as packaging materials, plastic is expected to increase its share of the market to 53 percent (in pounds) in 2010. This percentage understates plastic's share since less plastic is required than paper in most applications due to its lighter weight. Plastic's share of the market will expand at a slower pace than in the past decade, as a number of packaging applications are now fairly mature in terms of the share controlled by plastic. These and other trends are presented in "Paper versus Plastic in Packaging," a new study from The Freedonia Group, Inc., a Cleveland-based industry research firm.

Plastic packaging growth is expected to outpace that of paper packaging through 2010 in all competitive markets covered in this study and is forecast to expand nearly 3 percent per year through 2010. Advances will result from plastic's competitive cost and performance advantages over paper. The most rapid gains in market share are anticipated in soy and other nondairy beverages and pet food applications, with the frozen food, fruit beverages and detergent markets also expected to see favorable increases. Robust growth is also expected for single-serving plastic milk bottles, driven by conversions from half-pint gabletop cartons to plastic bottles in quick service restaurants and school lunch programs.

Paper packaging will post marginal advances or continue to decline in most competitive markets through 2010 due to inroads from plastic. However, above-average opportunities are expected in foodservice, dairy and soy milk applications, with organic milk also a growth niche. Foodservice opportunities will be fueled by favorable foodservice revenue growth and widespread demand for products such as paperboard boxes and cartons, paperboard buckets and pails, wraps and bags. While most dairy applications for paper are mature, heightened demand for ice cream novelties, especially reduced-fat and bite-sized varieties, will support folding carton opportunities. Solid prospects for paper in soy beverage packaging will result from the ongoing movement of soy beverages into the mainstream marketplace and the general preference for paperboard containers in promoting a natural image.

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