Annual US sales for the flexible packaging industry is expected to reach an estimated $33.6 billion in 2019, according to the 2020 State of the Flexible Packaging Industry report, published by the Flexible Packaging Association (FPA). The survey was conducted during the first quarter of 2020, with the majority of completed surveys received between January and early March. Thus, it does not account for the ongoing COVID-19 pandemic's effect on the US and global economies.
The report examines several aspects of the industry, including materials and processes; end-use forecasts; M&A activity; imports, exports, and trade outlooks; and industry challenges. Flexible packaging is present in retail and institutional food and non-food outlets; medical and pharmaceutical applications; industrial materials; shrink and stretch films; retail shopping bags; consumer storage bags and wraps; and trash bags.
The focus of the report is on the segment of the industry that adds significant value to flexible materials, usually by performing multiple processes such as printing, laminating, coating, extrusion, and bag/pouch manufacturing. This segment is estimated to reach a value of $26.2 billion in 2019, and does not include retail shopping bags, consumer storage bags, or trash bags.
According to the FPA, flexible packaging represents approximately 19% of the total $177-billion US packaging industry. It is the second largest packaging segment behind corrugated paper, and just ahead of bottles and miscellaneous rigid plastic packaging. Flexible packaging’s solid long-term strength coupled with its capability to replace other packaging formats has resulted in growing market share from 17% in 2000 to 19% in 2019.
The industry has shown steady growth over the last 20 years with two exceptions — the downturn of 2001 because of the 9/11 terrorist attacks and the Great Recession of 2009. This growth has been aided by innovation in technology and products, greater penetration in new and existing markets, and adaptation to a changing marketplace. For 2018/2019, FPA estimates a 2.2% annual growth rate for US flexible packaging. The estimated growth rate of 2.2% is slightly lower than the projected 2.3% growth in gross domestic product for the full year of 2019.
The flexible packaging industry employs close to 79,000 people in the United States and encompasses a variety of manufacturing methods, materials, and resources. The average converter is a small-to-medium size company with annual sales totaling approximately $75 million. Flexible packaging is produced from paper, plastic, film, aluminum foil, or any combination of those materials, and includes bags, pouches, labels, liners, wraps, rollstock, and other flexible products.
The top 100 flexible packaging companies (out of an estimated 453) account for 81% of total industry revenue with an average size of $248 million. The top 10 companies account for 59% of revenue and have average sales of $1.7 billion to $1.8 billion. The majority of flexible packaging plants are concentrated in the Midwest, although many plants exist in the southeastern United States and California.
The report is available to FPA members free of charge and to non-members for $4,500. It can be downloaded from the FPA website.