Flexible and rigid packaging prices to rise post-recession

By Jenny EAGLE

- Last updated on GMT

Flexible Packaging will see one of the strongest growth rates to 2017
Flexible Packaging will see one of the strongest growth rates to 2017

Related tags Rigid plastic packaging Compound annual growth rate

The UK packaging industry will grow with a Compound Annual Growth Rate (CAGR) of 2.01% to 2017, claims a report by Canadean.

Consumer trends will drive the use of lightweight flexible and rigid plastic packaging with innovative pack shapes, closures and dispensers.

Dominic Cakebread,director of packaging services, Canadean, believes the industry is on a ‘threshold’ at the moment where prices have been driven down by the competition but supply and demand will pick up again post-recession.

The last five years have been very hard on the industry regarding price because people want the same functionality at minimal cost​,” he said.

Private label market

The private packaging label market is growing where people buy more supermarket own-brand products, and consumer trends, such as greater urbanization, people who move around and eating out has driven PET packages rather than glass​.

The recession has pushed prices down but as we come out of that the packaging market has to adapt to that.If the economy improves there are signs that there will be less pressure on the market and margin prices will go up​.”

The market research company said evolving consumer lifestyles means people are looking for increased convenience.

For British consumers, finding packaging that provides greater convenience has become increasingly important.

The packaging industry has responded to this by offering handheld packs for on-the-go consumption.

Easy-open packs

Packs that enable easy preparation at home or at work, such as resealable packaging, single-serve portions or in-pack cooking, are also popular.

According to Canadean, demand for packaging that offers increased convenience will help flexible packaging and rigid plastic packaging increase its share of the UK market, due to the materials’ ability to mould to shapes and formats, lower costs, and lightweight nature.

Flexible Packaging will see one of the strongest growth rates to 2017, with a CAGR of 3.09%, led by its use in the food sector.

Rigid Plastic Packs is expected to see growth with a CAGR of 2.10%.

In addition to its traditional use in the food and health and beauty sectors, it will be increasingly utilised by the alcoholic drinks and home improvement sectors.

Reduction in raw materials

Lightweighting, achieved through the reduction of the amount of raw materials used, produces lighter packaging which lowers transportation costs and supports improved sustainability and company profitability targets.

In this respect, plastics is increasingly popular, as its lightweighting enables lower unit prices to be maintained in the face of rising raw material costs.

For example, in 2011 Carlsberg introduced a 500ml PET bottle to the UK beer market as a substitute for the heavier glass bottle.

Whilst use of rigid plastics for beer products will remain low, products such as Carlsberg’s PET bottle highlight how lighter weight materials can be used.

The findings are based on Canadean’s report: Latest Trends and Key Issues in the UK Retail Packaging Market​.

Related topics Processing & Packaging

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