Strong growth ahead for food & beverage bottles.

* Blow molded food and beverage containers consumed over 5 billion lb of resin in 2003, a figure that will surpass 6.2 billion lb by 2006, according to the recently published Mastio blow molding market study. Plastic containers for liquid and dry foods, water, carbonated soft drinks, juices, sports drinks, milk, water, beer, and liquor will grow at a 6.2% average annual rate for the next three years.

Market trends

New bottle designs will help spur demand. For example, new sizes of milk containers are on the horizon. Some dairies are manufacturing single-serve plastic bottles, which are sold primarily in convenience stores and have seen as much as 100% annual growth. Other recent product introductions include Ocean Spray's new square juice bottle, designed to fit in a refrigerator door shelf, and Miller Brewing Co.'s PET beer bottle.

Amcor PET Packaging is developing "smart packaging" that incorporates special features that enable it to be tracked through the supply chain. Indicators can be built in to provide information on the freshness of the packaged product.

Heat-set technology and use of nitrogen gas have increased the ability to hot-fill PET containers and extend the contents' shelf life. Barrier technologies have also made significant inroads in the beverage market. For example, packagers are exploring use of oxygen-scavenging resins blended with PET for smaller single-serve carbonated soft-drink bottles. And Plastipak's Actis plasma coating is being used to extend shelf life while preserving flavor. In beverages, adoption of barrier technology is highest for juices and teas.

Seven blow molders of food and beverage containers hold about 58% of the market. They are, starting with the largest, Consolidated Container Co., Amcor PET Packaging North America, Constar International, Southeastern Container, Owens-Illinois, Plastipak Packaging, and Graham Packaging Co.

Uneven growth prospects

PET salad dressing and condiment containers are replacing glass and contribute to 6.7% average annual growth for liquid food packaging. This sector should reach over 1 billion lb by 2006. Dry food containers are growing at a similar rate although this is the smallest sector of food containers. It will consume an additional 31.7 million lb/yr, raising the level to 176.2 million lb by 2006.

Milk is the slowest growing beverage packaging sector (3.5%/yr) and will gain only 111.3 million lb of additional resin consumption by 2006. At the same time, water bottles will continue to increase dramatically from 729.6 million lb to 1.02 billion lb by 2006. This sector enjoys the highest average growth rate of 11.7% annually. Juice and noncarbonated beverage bottles have slowed compared to recent years and will grow an average of 7.1%/yr, adding 200.8 million lb of resin demand over the next three years. Softdrink packaging growth also will lag behind recent years with only 4.2% annual growth, causing this market to add only 206.2 million lb of PET resin consumption.

HDPE & PET dominate

The two major resins used in this market are HDPE and PET. Together, they account for about 4.9 billion lb of food and beverage bottles. HDPE amounts to around 32% of the market or 1.6 billion lb/yr. PET represents around 66% or roughly 3.3 billion lb/yr. Annual consumption of HDPE in these containers is expected to grow by 2.6%/yr to 224 million lb and PET will grow 3.7%/yr to 653 million lb by 2006.

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Mastio & Company, based in St. Joseph, Mo., is a consulting firm specializing in industrial-consumer opinion research and market trends in the plastics industry. For more information, call [phone] or visit www.mastio.com/pt/outlook.html.

By Bart Thedinger

Managing Partner

Mastio & Company