Chicago — The packaging industry — including plastics — had record growth last year, continues to be robust, and looks to continue to trend next year.
As part of Pack Expo in Chicago, officials from show organizer and trade group PMMI gave an overview of the business that forecasts continued growth for the foreseeable future.
"The packaging industry in the U.S. is very strong and growing. Manufacturing is very strong and growing. The question is why is this happening," Jorge Izquierdo, vice president of market development at PMMI, said.
Well, for one, consumers are confident and spending money, he said.
Companies, spurred on by federal tax breaks, also are making capital investments.
Productivity at companies is improving even as companies have problems finding enough workers, he said.
"It's been a challenge to fill those spots. The industry is growing, but we really don't have the people to fill those slots," Izquierdo said.
That means companies are increasingly turning to automation, which helps drive those productivity improvements.
And electronic commerce cannot be overlooked at a key trend in driving growth in the packaging industry, he said.
"E-commerce is definitely one of the drivers of growth here," Izquierdo said. "E-commerce is exploding. Packaging is changing at an incredibly fast rate. It's hard to keep up."
Donna Ritson of DDR Communications LLC worked with PMMI on its newly released report on e-commerce.
With the explosion of home shipments, the corrugated packaging industry has experienced more demand for its products.
But plastics also is benefiting from the trend, especially flexible plastic packaging, she said.
"We know flexible is growing," Ritson said. "Rigid is certainly not going away."
"This isn't an Amazon report. But we can't ignore what Amazon has done. They not only changed the rules of the game. They created a whole new game," she said at the show.
"E-commerce is really changing the entire world. I think it's going to be an amazing future. Where is our packaging going to go and what's it going to look like in 10 years? Because this whole e-com thing is not going away. What's it going to look like. How are our products going to look? Brick and mortar is still super important. It's not disappearing. In fact, you have ecom companies that are opening brick and motors stores because they are so successful at e-com. It's pretty amazing," Ritson said.
Consumer packaged goods companies will continue to push packaging machinery makers and packaging converters to innovate as the world rapidly changes.
"They are looking for the next thing. They are looking for something that is sturdy and durable and can last through an omnichannel supply chain through e-com," Ritson said.
Companies are looking to build entirely new packaging lines to handle e-commerce or at least diverting from existing lines to handle the new opportunities.
PMMI, which calls itself the Association for Packaging and Processing Technologies, indicated that packaging machinery shipments hit $8.2 billion in 2017, a 6.4-percent growth.
That growth is expected to continue at a compound annual growth rate of 4.1 percent until 2023, the association said.
"The expectation of 2019 as well is show us a very robust growth," Izquierdo said.
