US Protective Packaging Industry

• Publication date: March 2010

US demand to reach $5.2 billion in 2014 Protective packaging demand is expected to reach $5.2 billion in 2014, a rebound from the 2004-2009 period as the US economy recovers from the recession that began in December 2007. Advances will be stimulated by an upswing in manufacturing activity and the continued proliferation of Internet shopping. These factors will necessitate heightened requirements for cost-effective packaging used i...

US demand to reach $5.2 billion in 2014

Protective packaging demand is expected to reach $5.2 billion in 2014, a rebound from the 2004-2009 period as the US economy recovers from the recession that began in December 2007. Advances will be stimulated by an upswing in manufacturing activity and the continued proliferation of Internet shopping. These factors will necessitate heightened requirements for cost-effective packaging used in the protection of goods from shock, vibration, abrasion and other damage caused by shipping and handling.

Foamed plastic to see sharp turnaround in demand

Foamed plastic protective packaging products will experience above-average demand growth through 2014, a sharp turnaround from the depressed base of 2009. Gains will reflect an improved outlook for the manufacturing sector, which will spur concomitant packaging requirements. Additionally, opportunities will be aided by foamed plastic’s light weight and excellent cushioning capabilities, along with versatility in conforming to virtually any shape to provide enhanced protection. However, longer-term prospects will be constrained by the outsourcing of manufacturing operations to offshore locales with lower labor costs and competition in less demanding applications from greener alternatives.

Molded pulp to see some of the fastest gains

Other segments that are expected to enjoy solid advances include air pillows, molded pulp, bubble packaging, protective mailers and insulated shipping containers. Among factors driving growth will be performance and environmental advantages as well as a rebound in the economy and a continued robust outlook for electronic shopping, which will fuel the need for products offering enhanced resistance to impact, abrasion, temperature changes and other events during movement through the supply chain. Molded pulp, a relatively small segment, will experience some of the fastest gains in protective packaging products as a result of heightened interest in environmentally friendly packaging coupled with more stable pricing than petroleum-based plastics with which the material competes. The growing emphasis on packaging sustainability has also fueled numerous introductions of recycled content and biodegradable alternatives to conventional plastic-based protective packaging. Solid gains for insulated shipping containers will be the result of expanding specialized delivery requirements for temperature-sensitive pharmaceuticals and increased online sales of perishable foods. The growing presence of biotechnology drugs that are temperaturesensitive will benefit demand for these containers as temperature control throughout the supply chain is critical to the efficacy of such drugs. Moreover, insulated shipping containers will continue to have a major role in reducing losses of high-value drugs due to spoilage caused by temperature abuse. More moderate gains are anticipated for paperboard protectors, paper fill, dunnage bags and loose-fill, the result of mature applications and/or competition from faster growing product types. Nonetheless, prospects for paper fill and biodegradable loose-fill will be helped by growing interest in environmentally friendly packaging. In addition, healthy growth for warehouse clubs and home center stores will bode well for demand for paperboard edge protection products, which are used by these establishments to unitize and stack pallets.

Study coverage

This new industry study, Protective Packaging, presents historical demand data (1999, 2004, 2009) plus forecasts for 2014 and 2019 by product and material. The study also considers key market environment factors, evaluates company market share and profiles more than 45 industry players.

Packaging Industry in the United States

TABLE OF CONTENTS

INTRODUCTION ix

I. EXECUTIVE SUMMARY 1

II. MARKET ENVIRONMENT 4

General 4
Macroeconomic Outlook 5
Consumer Income & Spending Trends 8
Demographic Trends 10
Manufacturing Outlook 13
Electronic & Computer Trends 16
Appliance Trends 18
Retail Sales Outlook 20
Internet & Catalog Sales Outlook 23
Packaging Industry Outlook 27
Box Industry Outlook 31
Plastic Resin Outlook 34
Foamed Plastic Outlook 36
Environmental Considerations 38
Regulatory Considerations 42
Pricing Trends 44
International Activity 47

III. OVERVIEW 50

General 50
Products 51
Materials 53
Functions 56
Cushioning 58
Blocking & Bracing 59
Void-Fill 61
Wrapping 62
Insulation 63
Markets 64
Manufacturing 65
Non-Manufacturing 67

IV. FOAMED PLASTIC 69

General 69
Molded Foam 71
Expanded Polystyrene 73
Materials 75
Applications 77
Producers 78
Polyolefins 80
Materials 81
Applications 82
Producers 83
Polyurethane 85
Materials & Applications 86
Producers 87
Foam-in-Place Polyurethane 88
Materials & Applications 89
Producers 90
Polyolefin Rolls 92
Other Foams 95

V. OTHER PROTECTIVE PACKAGING 97

General 97
Protective Mailers 101
Materials & Applications 103
Producers 105
Paperboard Protectors 108
Materials & Applications 109
Producers 112
Bubble Packaging 114
Materials & Applications 115
Producers 116
Insulated Shipping Containers 119
Materials 120
Applications 123
Producers 124
Air Pillows 127
Materials & Applications 128
Producers 130
Paper Fill 132
Materials & Applications 133
Producers 134
Dunnage Bags 136
Materials & Applications 137
Producers 138
Loose-Fill 139
Expanded Polystyrene Loose-Fill 141
Biodegradable Plastic Loose-Fill 144
Markets 147
Molded Pulp 148
Materials & Applications 150
Producers 151

VI. INDUSTRY STRUCTURE 152

General 152
Market Share 155
Sealed Air 157
Pregis 158
Tegrant 159
Other Market Leaders 159
Acquisitions & Divestitures 161
Marketing & Distribution 163
Competitive Strategies 167
Cooperative Agreements 169
Company Profiles 172
ACH Foam Technologies LLC 173
American Excelsior Company 175
Automated Packaging Systems Incorporated 177
Barnhardt Manufacturing Company 178
BASF SE 180
Bayer AG 182
Buckeye Corrugated Incorporated 184
Caraustar Industries Incorporated 185
Carpenter Company 187
Cellect LLC 188
Cellofoam North America Incorporated 189
Cold Chain Technologies Incorporated 190
Coldpack SAS 192
Corbi Plastics, see Menasha
CPI Packaging, see Sealed Air
Createc Corporation 193
Ecovative Design LLC 195
Elwood Packaging Incorporated 196
Foam Fabricators Incorporated 197
FP International, see Free-Flow Packaging International
Free-Flow Packaging International Incorporated 199
Great Northern Corporation 202
Huntsman Corporation 204
Illinois Tool Works Incorporated 205
Induspac Packaging Group, see Specialized Packaging
Group
INEOS NOVA, see NOVA Chemicals
IntelliPack, see Pregis
ITW Shippers, see Illinois Tool Works
Ivex Packaging, see Specialized Packaging Group
KapStone Paper and Packaging Corporation 208
Koch Container, see Buckeye Corrugated
Landaal Packaging Systems Incorporated 209
LEWISBINS+, see Menasha
Lifoam Industries LLC 210
Marko Foam Products Incorporated 211
MeadWestvaco Corporation 213
Menasha Corporation 215
Multi-Wall Packaging Corporation 217
NanoCool, see MeadWestvaco
North Carolina Foam Industries, see Barnhardt
Manufacturing
NOVA Chemicals Corporation 219
ORBIS, see Menasha
Pak-Lite Incorporated 221
Plastilite Corporation 222
Polar Tech Industries Incorporated 223
Polyair Inter Pack Incorporated 225
Pregis Corporation 228
ProPak Custom Solutions, see Lifoam Industries
Protexic Brands, see Tegrant Corporation
Ranpak Corporation 234
RAPAC, see Ring Companies
Ride Rite, see Illinois Tool Works
Ring Companies 236
Rock-Tenn Company 237
Rogers Foam Corporation 240
RTS Packaging, see Rock-Tenn & Sonoco Products
Sealed Air Corporation 242
Smurfit-Stone Container Corporation 248
Sonoco Products Company 249
Southern Container, see Rock-Tenn
Specialized Packaging Group LP 251
Stephenson & Lawyer, see UFP Technologies
Storopack Hans Reichenecker GmbH 254
Tegrant Corporation 256
Tennessee Packaging, see Buckeye Corrugated
THARCO 260
ThermoSafe Brands, see Tegrant
3M Company 262
True Pack Limited 263
UFP Technologies Incorporated 265
WineLoc Packaging Products, see ACH Foam
Technologies
Other Companies in Protective Packaging 268

LIST OF TABLES

SECTION I -- EXECUTIVE SUMMARY

Summary Table 3

SECTION II -- MARKET ENVIRONMENT

1 Macroeconomic Indicators 8
2 Personal Consumption Expenditures 10
3 Population & Households 13
4 Manufacturers' Shipments 16
5 Electronic & Computer Product Shipments 18
6 Appliance Shipments 20
7 Retail Sales 22
8 Electronic & Mail Order Shopping: Sales by Type & Product 26
9 Packaging Supply & Demand 31
10 Corrugated & Paperboard Box Shipments by Type 34
11 Plastic Resin Supply & Demand 36
12 Protective Packaging Prices 47

SECTION III – OVERVIEW

1 Protective Packaging Demand by Product 52
2 Protective Packaging Demand by Material 55
3 Protective Packaging Demand by Function 57
4 Protective Packaging Demand by Market 64

SECTION IV -- FOAMED PLASTIC

1 Foamed Plastic Protective Packaging Demand 70
2 Molded Foam Protective Packaging Demand 72
3 Molded Expanded Polystyrene Protective Packaging Demand by Market 75
4 Molded Polyolefin Protective Packaging Demand by Market 81
5 Molded Polyurethane Productive Packaging Demand by Market 86
6 Foam-in-Place Polyurethane Protective Packaging Demand by Market 89
7 Polyolefin Roll Protective Packaging Demand by Market 95

SECTION V -- OTHER PROTECTIVE PACKAGING

1 Other Protective Packaging Demand by Type 100
2 Protective Mailer Demand by Type & Market 103
3 Paperboard Protector Demand by Market 109
4 Bubble Packaging Demand by Market 115
5 Insulated Shipping Container Demand
by Application & Market 120
6 Air Pillow Demand by Market 128
7 Paper Fill Packaging Demand by Market 133
8 Dunnage Bag Demand by Material & Market 137
9 Loose-Fill Packaging Demand by Type 141
10 Expanded Polystyrene Loose-Fill Packaging Demand 144
11 Biodegradable Plastic Loose-Fill Packaging Demand 147
12 Loose-Fill Packaging Demand by Market 148
13 Molded Pulp Protective Packaging Demand by Market 149

SECTION VI -- INDUSTRY STRUCTURE

1 US Protective Packaging Sales by Company, 2009 154
2 Selected Acquisitions & Divestitures 163
3 Selected Cooperative Agreements 171

LIST OF CHARTS


SECTION III – OVERVIEW

1 Protective Packaging Demand by Material, 2009 56
2 Protective Packaging Demand by Function, 2009 58
3 Protective Packaging Demand by Market, 2009 65

SECTION IV -- FOAMED PLASTIC

1 Foamed Plastic Protective Packaging Demand, 2009 71

SECTION V -- OTHER PROTECTIVE PACKAGING

1 Other Protective Packaging Demand by Type, 2009 101

SECTION VI -- INDUSTRY STRUCTURE

1 US Protective Packaging Market Share, 2009 157
2 Protective Packaging Industry Flowchart 166