Trends in Flexible Packaging Markets: Two Different Views

The Flexible Packaging Assn. (FPA) has put out its projection of the top five flex-pack markets in the next five years (2000-2005). I must differ with the association.

Over the course of a year, I visit scores of raw material suppliers, flex-pack converters, package users, and retailers on a worldwide basis. Most supply a diverse list of customers. These visits and years of hands-on experience have given me a “feel” for the industry that helps me assess and evalute trends.

Based on replies from some of its members, FPA names fresh produce the top market for growth by 2005, followed closely by drugs, medical/surgical, pet food, and snacks.

Let's analyze each of these areas.

Using flexible packaging for fresh produce is not new. PE blends and combinations have been used extensively in the US for at least five years. Most pouched salad combinations and variations are now in flex-pack pouches. With more than 50% of the fresh produce market in flex-pack, this area is approaching saturation.

There are some growth opportunities in individual product items such as tomatoes, berries, and lettuce. However, there is also the trend toward “freshness” and a farm-like ambiance in supermarkets; with dramatic improvements in “misters” and refrigeration techniques, a nonpackage approach appears to be growing.

Drugs and medical/surgical are next on the FPA list. It's difficult to project exactly where this growth will evolve. The most vibrant area for package change in drugs is blister packaging, where only the top web is flexible — not the entire package. There is only a small amount of foil or PET laminate used as the peelable/push-through web. Maybe the entire potential market for top blister web is equal to six months usage of dehydrated soup pouchstock!

There is a future market in the US for blister packs in prescriptions, but it will take much more than five years for pharmacies to change from a “stock system” to “drawers,” allowing for blister pack dispensing. Then there's the regulatory and machinery hurdles that must be faced. There is some opportunity for top blister webs in the conversion of prescription to OTC. For niche converters, this does present superb opportunities, but as the second top market for flex-pack growth, it's far off target.

Demographic changes preclude the surgical/medical market from being the third top growth area. With vast improvements in medical technology, less invasive surgery, and shorter hospital stays, there is less usage of medical device packaging. Trends toward package standardization and reduced costs appear to favor flexible packaging over rigid, and the economics imposed on the market by HMOs also may help flexible growth, but neither factor is enough to make this a major growth area.

Pet food may be a growth market. It is now dominated by cans, and there is room for flexible conversion. Factors metering growth are product economics and package machinery. Needed are less expensive retort pouchstock, canning machinery conversion, and more value-added products — not likely by 2005.

The last growth market listed by FPA is snack foods, a largely flexible market characterized by tough pricing, an abundance of converters, and regional differences. Growth appears to be limited by modest product innovation and cost considerations. It's hardly the formula for top market growth by 2005.

I believe the stand-up pouch for beverages is the top flex-pack growth market. Product volume is high, flex-pack usage is strong, and there are significant economies. The metal can is an outdated package for a beverage and will face increased flexible competition by 2005. This will further impinge on the entire metal can and glass bottle markets; less expensive retort stock and improved dispensing technology will penetrate traditional packaging.

The metal can, which hardly has changed in more than a century, seems ripe for obsolescence. That's where flex-pack growth will come — the conversion of the metal can.

Stanley Sacharow has been in the flexible packaging industry for more than 35 years. His company, The Packaging Group, is an organizer of targeted conferences and a consultant to the international packaging/converting industry. Contact him at 732/636-0885; e-mail: univpac@aol.com.


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