ATLANTA (Oct. 4, 11 a.m. ET) — Although caps and closures rarely take center stage in discussions about packaging, they are a vital part of many packaging systems, with 250 billion made in the U.S. each year.
Curt Begle, president of Berry Plastic Corp.'s rigid closed-top business, likened a consumer's decision to buy a packaged product to a first date — and their first attempt to open a closure to a first kiss.
“If you want another kiss, if you want marriage down the road, if you want repeat buys: That experience had better be at least a satisfactory experience, [or] you're not going to sell that product again — no matter how good the contents are on the inside,” he said.
Begle spoke Sept. 14 at Plastics Caps & Closures 2011, organized by Plastics News Global Group and held Sept. 12-14 in Atlanta.
As a 30-something parent, Begle said his home is full of caps and closures attached to various types of plastics packaging, and he pays attention to what his children do with the closures.
“[Berry is] very bullish on what the next generation is going to be accustomed to,” he said. “I grew up in the era of the plastics revolution. Looking at a glass container is strange for me. Kids today are growing up with pouches and flexible packaging.”
At the same time, Evansville, Ind.-based Berry is mindful of North America's aging population, which the Administration on Aging predicts will grow, among adults aged 65 and older, from 40 million people in 2010 to 70 million by 2030.
Jeff Resnick, business development manager at Freedonia Custom Research in Cleveland, agrees that caps and closures adapted for use by the elderly will have much value in coming years.
“The aging population has really expanded the demand for pharmaceuticals, so the ability to get the precise amount of medicine that they need and to help dispense the pill or the low-viscosity liquid is going to be the kind of value-added closure that's going to grow the market,” he said Sept. 13 during the conference.
Citing Freedonia studies published in October 2010 and January 2011, Resnick said that between 2009 and 2014, Freedonia sees tremendous potential for plastics caps and closures. Among the findings:
c Demand for caps and closures of all materials was $7.8 billion and 241 billion units in 2009. Freedonia expects the segment to grow 4 percent in value to $9.5 billion, and 3.8 percent by volume to 275 billion units in 2014.
c Plastics accounted for 79 percent of cap and closure demand in 2009 and is forecast to reach 81 percent in 2014 — an increase of 4.5 percent annually to $7.7 billion.
c Fitments on single-serve containers — with flexible packaging growing its share of that segment year after year — as well as specialized closures for hot-fill applications, and lightweighting, will continue as predominant trends in the space.
c Beverages, food and pharmaceuticals will continue through 2014 to be the top three end uses for caps and closures. Cosmetics and toiletries, many of which rely on dispensing closures such as pumps, sprays, applicators and flip-tops, will be the next-largest piece of the pie.
“Going forward there's less material being used in the packaging product and more complex closures are being used, and that's helping to drive value for the cap and closure market in overall packaging,” Resnick said.
Begle said Berry's engineers continue to strive for material savings as they work to enhance performance of new designs.
“We'll continue to lightweight parts, because not only is that the right thing for the environment, it's also a big cost savings,” he said.
Berry also has found the use of filler materials to be beneficial in rigid top packaging.
“What we're finding is ancillary benefits from doing that — better processing windows for us, reduced cycle times, rigidity of the packaging — those are the benefits of something as simple as using a filler of calcium carbonate,” Begle said.
Among the estimated 100-150 U.S. companies making caps and closures, Berry is part of an elite group. According to Freedonia, the six largest players in the segment — Berry, Rexam plc, Aptargroup Inc., Silgan Holdings Inc., Reynolds Group and MeadWestvaco Corp. — accounted for 31 percent of demand by sales in 2009.
(Berry recently acquired Rexam's specialty/beverage closures business for $360 million.)
Both Resnick and Begle said caps and closures manufacturers will have to be on guard against continued consumer backlash in the U.S. against waste generated by PET water bottles, and by replacement, especially in food packaging, of rigid, open-topped containers by pouches and bags with zip and tear-off closures.
“We can … come up with all the cost savings in the world. We can come up with the best thing since canned beer. Really, [what matters], is those consumers in the store, making choices at the shelf and having experiences at home,” Begle said.
To please those shoppers, Berry has designed several caps and closures that combine more than one design concept, such as tamper evidence with child resistance. Berry also has experimented with designs that combine compression molded and injection molded parts, he said.
World cap and closure demand is projected to rise 4.6 percent per year to nearly $40 billion in 2014, or 1.7 trillion units, Resnick said. The plastic caps and closures segment is projected to grow 4.8 percent annually to 944 billion units in 2014 — with plastics accounting for 55 percent of the total volume of materials used in 2014.
Freedonia estimates the Asia-Pacific region's demand for caps and closures will grow 8.7 percent through 2014, with China leading the growth at 14.5 percent as its citizens become more urbanized and affluent.
Among caps and closures manufacturers, the global market is even more fragmented than in North America, Resnick said: The six largest producers account for only 21 percent of total sales.