Millennials help push pouch growth

FORT LAUDERDALE, FLA. — The pouch, once considered a minor player in the packaging world, is a niche no more.

And one industry observer sees pouches continuing their march toward wider acceptance and use in the coming years.

“The pouch is really an outstanding story of growth even though it's taken a bit to get there. It's really an amazing story,” said Joe Pryweller, senior industry analyst at market research firm Freedonia Group Inc.

Pryweller authored a study of the United States pouch market that came out earlier this year and is working on a world pouch study that will be out toward the end of 2014.

Not all pouches are alike, but Pryweller sees growth in both the flat pouch and stand-up pouch categories, he said at the recent Global Pouch Forum in Fort Lauderdale.

Flat pouches — think chip bags — are expected to grow by 4 percent annually through 2018.

Pretty good, all things considered. But there is something even more impressive in the Freedonia forecast.

“We all know about the stand-up pouch, of course. This is the one that's growing fairly astoundingly,” said Pryweller, who is forecasting annual growth of 6.5 percent through 2018.

Several advantages of pouches compared to other packaging are pretty straight-forward and include shipping costs, lighter weight, convenience, sustainability and transportation fuel savings, Pryweller said.

But he indicated another big factor is taking place in the growing acceptance of the pouch. He calls it the millennial embrace.

“That's the idea that the millennial generation is not as beholden to traditional packaging. That they are looking for new, exciting types of packaging that they can use in their everyday lives,” he said.

Take that folding carton.

In other words, the influence of the baby boomer generation — the youngest of those folks turn 50 this year — will ultimately start to wane.

And those coming up to take their place like using pouches.

“As this marketplace goes and us baby boomers start to retire, we're going to see more opportunity for the pouch with the millennial audience,” Pryweller said.

Pouches serve a variety of markets, and the senior industry analyst said growth can be seen all over. Use of pouches in food and beverage applications is expected to grow by 4.4 percent through 2018. Non-food growth is even greater, at 5.4 percent.

Growth in the use of pouches is expected to grow by 4.1 percent annually over the next five years in a category he calls candy and snacks. In a segment he calls other snacks, like popcorn, nutrition bars and meat snacks, the growth is expected to be 5.4 percent annually.

Frozen foods check in at 4.8 percent annually through 2018, and sauces and condiments are projected at 5.4 percent. Cheese is at 4 percent; fresh produce at 4.7 percent; and beverages at 4.7 percent.

Pet food, meanwhile, has projected growth of 5.8 percent through 2018, Pryweller said, a number he called “pretty huge.”

The pet treats segment of this category seems to be particularly impressive with the adoption of pouches. Heading into pet stores, consumers can see racks and racks of treats in pouches.

“Dogs are eating better than humans these days,” he quipped, as pouches are helping drive growth in that segment with easy-to-handle, resealable and contemporary designs.

Non-food pouch demand, meanwhile, will grow by 5.4 percent annually through 2018, including 6.1 percent annual increases for consumer products and 5.2 percent increases for medical and pharmaceutical usage.

Some 400 companies currently serve the pouch market in the U.S., but the top seven companies have 30 percent of the share. With so many players in pouch business, there is room for blockbuster acquisitions and divestitures, he told the crowd.

“It's quite an emerging industry and we see it growing considerably over the next five years,” Pryweller said.

“Pouches, in general, are one of the fastest growing parts of the packaging industry,” he said, “if not the fastest.”