CHICAGO - The U.S. market for converted plastic film roll stock for flexible packaging has grown at almost double the expected rate during the past five years, and is expected to grow 4-5 percent in the next five years. Those optimistic rates were included in results of a survey of the 41 largest flexible packaging makers in North America by Kline and Co., a Fairfield, N.J., consulting firm.
Highlights of the study were presented by Mary M. Vaughan, Kline project manager, at the Flex-Pak Worldwide Flexible Packaging Conference, held March 28-29 in Chicago.
Vaughan said the market for flexible roll stocks grew 9.5 percent to $4.1 billion from 1988-1994, and is expected to climb to the $5 billion mark by 1999.
``Our data show that many factors have contributed to the growth,'' she said. ``But in general, the advantages of flexibles for source reduction and other environmental concerns, replacement of rigid packages with flexible, emergence of the liquid pouch packaging segment, and lower raw material costs than for rigid were major contributors.''
Continued growth in next five years will be due to many of the same attributes, as well as improving graphic capabilities, opportunities in developing countries, and new product intro-ductions in existing markets.
The Kline study showed food end markets accounted for about 70 percent of all converted roll stock sales in 1994, or about $2.9 billion, with $700 million, or about 17 percent of that figure, being in snack foods, the largest single food use.
Of the companies surveyed, 50 percent indicated they export converted packaging overseas. But exports accounted for only about 3 percent, or $120 million, of the $4.1 billion total sales.
Decisions on entering the export market were influenced by environmental legislation, marketing, distribution and competition from foreign companies, as well as the availability of a skilled work force, and acceptance of flexible packaging.
``There has been quite a trend in the five-year period for companies to consolidate, merge and acquire other companies,'' Vaughan said. ``And our respondents expected that they would continue to reduce the number of suppliers with which they work, as well as continued consolidation.''
Kline reported that the top five flexible packaging makers in sales are Printpack Inc. of Atlanta; Curwood/Milprint Inc., a unit of Bemis Co. Inc. of Minneapolis; James River Corp. of Richmond, Va.; American National Can Co. of Chicago; and RJR Packaging Division of Reynolds Metals Inc. of Richmond, Va.
Those firms account for 52 percent of the total sales, or about $2.1 billion. Only six of the 41 firms in Kline's survey had sales of $200 million or more.
In assessing the future, the survey respondents expect that customers will require them to meet their needs on a global basis, that packaging will become as much a marketing tool as a product protection, and that environmental issues and cost reduction efforts will have an impact in the next half-decade.