FPA Publishes ‘2020 State of the Flexible Packaging Industry Report’

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2020/10/16 FPA Publishes ‘2020 State of the Flexible Packaging Industry Report’

FPA Publishes ‘2020 State of the Flexible Packaging Industry Report’

Source from: https://www.flexpackmag.com/articles/90681-fpa-publishes-2020-state-of-the-flexible-packaging-industry-report

The Flexible Packaging Association (FPA) announced that has release its “2020 State of the Flexible Packaging Industry Report.” The report aims to provide industry converters, suppliers, investors and analysts with insight into the performance (i.e. growth, revenue/volume expectations, profitability and capital spending) of the U.S. flexible packaging industry over the past year.

This report examines several aspects of the U.S. flexible packaging industry including:

Performance (growth, revenue/volume expectations, profitability and capital spending)
Materials and processes (printing and expected material usage)
End-uses (end-use forecast)
Structure and consolidation (M&A activity)
Imports and exports (trade outlook)
Industry vision, challenges, and critical issues

The report survey was conducted early in 2020 with the majority of completed surveys received between January and early March, and the remainder were received between April and June 2020. As a result, this year’s forecast data does not fully reflect the impact of the COVID-19 pandemic. Even today, many health experts are wary of a health crisis this fall due to the combined effects of the normal flu season and the on-going COVID-19 pandemic. How this series of events will affect the U.S. and global economies is not clear.

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

The focus of this report is 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 bag/pouch manufacturing. This segment of the industry is estimated to be $26.2 billion for 2019 and does not include retail shopping bags, consumer storage bags or trash bags.

Flexible packaging represents approximately 19% of the total $177 billion U.S. packaging industry and is the second largest packaging segment behind corrugated paper, and it just ahead of bottles and miscellaneous rigid plastics packaging. The report finds that flexible packaging’s solid long-term strength coupled with flexibles’ ability to replace other packaging formats has resulted in the growth of flexible packaging, increasing from 17% in 2000 to the current level of 19% 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 “Great Recession” of 2009. This steady growth and expansion have been aided by innovation in technology and products, 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 a solid annual growth rate for total U.S. flexible packaging of 2.2% 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% is slightly lower than the projected gross domestic product (GDP) growth for the full year 2019, which the latest data indicates an overall U.S. economic growth of 2.3%.

The U.S. flexible packaging industry employs close to 79,000 people in the U.S. 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 $73-$75 million.

The top 100 flexible packaging companies (out of an estimated 453) account for 81% of the total industry revenue with an average size of $248 million. The top 10 flexible packaging companies account for just over half (59%) of flexible packaging industry revenue and have average sales of $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.

This year’s report includes data from the U.S. Census Bureau’s 2016 Annual Survey of Manufactures (ASM) full set of reports for all U.S. NAICS Industries. Census Bureau data for 2017 is now projected to be available in November 2020, as is the full economic census which is conducted every five years.

In addition, information for this report is collected from the U.S. Departments of Labor and Commerce, industry analysts, investment banking reports and other authoritative sources to provide a more complete and insightful picture of the flexible packaging industry.

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