Freedonia Reports on Protective Packaging

Published: December 30, 2015

CLEVELAND, OH | A new report from market research firm The Freedonia Group says demand for protective packaging in the US is forecast to expand 4.9%/yr to $6.8 billion in 2019, bolstered by strong gains in Internet shopping. According to Protective Packaging, as consumers purchase more products online, demand will increase for packaging that can protect these goods from shock, vibration, abrasion, and other damaging effects of shipping and handling.

Continued growth in manufacturing markets and acceleration in construction spending will also support increases for protective packaging, although gains will moderate from those during the 2009–2014 period, which was positively impacted by recovery from the recent recession. Additionally, offshoring of durable goods manufacturing continues to present a challenge to local packaging providers.

The fulfillment of e-commerce sales will be the main driver of growth for protective packaging, supporting gains for products such as air pillows and protective mailers, which are used by various participants in the Internet shopping market.

The study says environmental concerns will bring about a number of changes for protective packaging, primarily for goods delivered directly to consumers. E.g., foam loose fill is being supplanted by air pillows and paper fill products in part due to concerns that foam is harmful to the environment. “The burgeoning Internet-based grocery and meal-kit delivery market,” notes analyst Katie Wieser, “will support gains for products made from environmentally sustainable insulating products, including jute and reusable vacuum insulated panels, as firms look to make their business as environmentally friendly as possible.” Likewise, the desire to reduce packaging weight and bulk has led to the introduction of packaging which is customized to the specific product.

Flexible packaging products, including protective mailers, bubble packaging, air pillows, paper fill products, and dunnage bags, will continue to dominate due to their cost efficiency and their ability to package a wide variety of goods, says the new study.

Foam protective packaging will comprise the second largest share of total demand, with established applications in manufacturing markets providing growth opportunities despite competition from rigid and flexible materials with more favorable environmental profiles. Foam products include insulated shipping containers, molded foams, foam-in-place polyurethane, rolled foam, and loose fill.

Rigid protective packaging products account for the smallest portion of total demand. However, these products are expected to post healthy gains as molded pulp and paperboard protectors both benefit from a less variable pricing structure and trends toward sustainability.

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