What's the current market size and future growth potential of the food container industry in North America?
Hello, thanks for your question on current market size and future growth potential of the food container industry in North America.
In short, the current market is valued at $64 billion as of 2015 for USA, Canada and Mexico. Growth rate is over 3% annually.
According to a market report by Smithers Pira, namely "The Future of Global Packaging to 2018", North America's consumption of packaging accounted for 23% of the global market in 2012, or $177.6 billion in dollar value. The expected numbers for 2018 are 21% and $204.6 billion [link 1].
By end-use sectors, as reported by the World Packaging Organization (WPO), food packaging remains the largest element, taking up 40% of the total market [link 2, page 38]. As of 2009, North America is the largest region which accounted for 31% total sales, equaling $60.9 billion with CAGR between 2004-2009 of 2.4% [link 2, pages 38-39]. (North America consists of USA, Canada & Mexico). If CAGR remains the same for 2010-2015 period, then food packaging demand in North America as of 2015 would be $70.2 billion.
According to an interview article with Freedonia on Packaging Digest, food container demand in North America (which consists of USA and Canada) was $27 billion and $31.3 billion in 2007 and 2012, respectively. The figures is estimated to reach $36.7 billion in 2017, growing at 3.2% annually for the period 2012-2017 [link 4]. So estimated number for 2015 is $34.4 billion.
The above article also stated that much of "much of that growth will come from the continued use of premium features, such as high-barrier materials for shelf stability and unique package shapes and sizes."
Reasons for the differences between 2 estimated values from WPO ($70.2 billion) and Freedonia ($34.4 billion) are that Freedonia (1) excluded Mexico demand and (2) only took into account rigid & flexible food containers while the former may included other types of food packaging such as pallets, wrappers, bags etc.
Ernst & Young number for North America (USA, Canada, Mexico) is $56.1 billion as of 2013. The same study also provided Hanover's estimation of the US food packaging market at the low end which is $54.4 billion, also for 2013 [link 5, page 6]. If annual growth rate is 3% for both estimations, the 2015 figures would be $59.5 billion and $57.7 billion, respectively.
Take Hanover's estimation as the lower end and WPO's estimation as the higher end, we'd have approximately $64 billion as the current market size of food container in North America.
In addition, last month's industrial study from Freedonia offers several interesting facts for the food containers market in the US [link 3]:
- The 2020's projected demand for food containers is $31 billion
- Overall growth of the market is estimated to be "fairly modest, and generally in line with moderate growth in domestic food production."
While evidences show that food container market in the US and Canada will grow at around 3% annually, Mexico is considered a developing countries with higher demand which leads to substantially higher expected growth rate. Specifically, it's reported by Packaging Digest to be at 6.4% for Central & South America region in 2012-2017 [link 4]. Consequently, CAGR for North America region that is comprised of the US, Canada & Mexico will be higher than 3%.
Other key trends of North America food container market by 2020:
- Growing usage of packaged food as well as rising demand for ready-prepared foods
- The shift to central packaging operations to reduce waste and control stocks more effectively
- Rise in the number of smaller households, leading to increasing units of smaller pack sizes
- The shift from metal, glass and other packaging to plastic packaging in areas such as soups, sauces, pet food and other products
- The emergence of new packaging formats, such as "clear plastic cans designed to directly compete with traditional metal cans, and squeezable spouted pouches for mayonnaise and sour cream."
- Healthy food products help boost demand for related packaging like plastic tubs, cups, and jars, as well as pouches.
- Heightened demand for "value added packaging that provides enhanced freshness protection and convenience of use."
- Unit expansion comes with the popularity of single serving packaging, which is "particularly attractive to consumers seeking portable food options to be eaten in the car or at work."
- Pouches, plastic containers will grow the fastest, taking place of paperboard, metal, and glass containers.
- Flexible packaging such as pouches will make "further inroads into rigid packaging applications."
I hope this has been helpful. Thanks again for using Wonder!