FPA publishes flexible packaging industry report

The report examined several aspects of the US flexible packaging industry including performance, materials and processes, end-uses, M&A activities, imports and exports as well as industry vision, challenges, and critical issues. It was conducted early in 2020 and as a result, the data does not fully reflect the impact of the Covid-19 pandemic.

The total US flexible packaging industry is estimated to be USD 33.6 billion in annual sales for 2019, including packaging for retail and institutional food and non-food, medical, pharmaceutical, industrial materials, shrink and stretch films, retail shopping bags, consumer storage bags, and wraps and trash bags.

The report focused on the segment of the industry that adds significant value to the flexible materials, usually by performing multiple processes, such as printing, laminating, coating, extrusion, and pouch manufacturing. This segment of the industry is estimated to be USD 26.2 billion for 2019 and does not include retail shopping bags, consumer storage bags, or trash bags.

Flexible packaging represents approximately 19 percent of the total USD 177 billion US packaging industry and is the second largest packaging segment behind corrugated paper, and just ahead of bottles and miscellaneous rigid plastics packaging. Flexible packaging’s solid long-term strength coupled with the flexibles’ ability to replace other packaging formats has resulted in the growth of flexible packaging, increasing from 17 percent in 2000 to the current level of 19 percent in 2019.

The industry has shown steady growth over the last 20 years with two exceptions, the downturn of 2001 due to the 9/11 terrorist attacks and the recession in 2009. The growth and expansion have been fueled by innovation in technology, growth in new and existing markets, and an ability to adapt to the ever-changing environment of today’s marketplace.

For 2018-2019, FPA estimates an annual growth rate for total US flexible packaging of 2.2 percent based on information provided by FPA members in the FPA State of the Industry Survey, by non-members in the FPA Industry-Wide Converters Survey, the Census Bureau’s latest Annual Survey of Manufactures, and FPA’s long-term historical model of flexible packaging industry growth. This projection is in line with the long-term trend line of flexible packaging growth for 2003-2019 as the industry continues to improve from the low level experienced in 2009. The estimated growth rate of 2.2 percent is slightly lower than the projected gross domestic product (GDP) growth for the full year 2019, which the latest data indicates an overall US economic growth of 2.3%.

The US flexible packaging industry employs close to 79,000 people in the United States and encompasses a wide variety of manufacturing methods, materials, and resources. The average flexible packaging converter is a small to medium-size company with annual sales totaling approximately USD 73-75 million.

The top 100 flexible packaging companies (out of an estimated 453) account for 81 percent of the total industry revenue with an average size of USD 248 million. The top 10 flexible packaging companies account for just over half (59 percent) of flexible packaging industry revenue and have average sales of USD 1.7-1.8 billion. The majority of flexible packaging plants are concentrated in the Midwest, although many plants exist in the Southeast and California.

The report is available for all FPA members and is available for purchase for non-members.