This just in from the “things you rarely think about” department: the North American market for flexible plastic food packaging is an approximately $28 billion market and is growing at about 2.5%. It is the fastest-growing market compared to other food packaging categories.

There are currently three important trends we’re seeing in the plastic food packaging market.

Growth of Convenience

The area where packaging is seeing the greatest surge is directly related to the consumer: retail convenience. This includes small-portion consumer packs, especially those containing healthy food choices. These can be highly decorated and often have features such as zippers or resealable openings, as in packaging for beef jerky, almonds, and ready-to-eat meal choices. This market is growing at double the rate of traditional packaging, which can include fresh protein, whole birds, deli meats, and cheese.

Sustainability

Sustainability for the plastic packaging industry has been redefined. For the last decade, the industry approached sustainability by considering its carbon footprint in terms of the industry’s responsible use of resources. The resources required for plastics is much lower than glass and is considerably lower than metal alternatives. A flexible pouch is estimated to require 10 times less water to produce than a similar-size aluminum can.

But times are changing. With the revelation that 80% of marine waste is plastic, the definition of sustainability has shifted from the industry’s low carbon footprint to the circular economy where reuse and recycling create a close-loop system. Can the material be recycled? How much recycled content is included in the package? This is a major issue that this industry must address and for which it’s not well-positioned.

For example, about 75% of convenience packaging is specified to have a matte rather than glossy finish. While this doesn’t change anything about the sustainability of the package, it does make it feel and appear a bit more like paper. This is a reaction to the public perception of sustainability.

Over the next few years, we’re going to see an increased use of non-petroleum, bio-based resins. The key for the food packaging industry is to find a way to standardize resin formulations to enable the production of a recyclable infrastructure.

Labor Scarcity

Finally, labor scarcity is a major macro trend across mature markets that is directly affecting processors, which bleeds into packaging. With low unemployment rates and restrictions on immigration, labor is becoming a big problem for processors.

Let’s look at a pork processor that pays workers more than $20 an hour. It runs shuttles 50 miles to towns to import labor. Still, turnover is still more than 400%, a number often caused by the undesirable characteristics of some of these processor jobs.

Producers of this stripe can eliminate labor requirements and challenges as they gravitate toward automated packaging processes.

Conclusion

There are not easy substitutes for flexible plastic packaging. The flexible plastic adds great value, ensures food safety, and extends foods’ shelf life in a way that other packaging cannot.

In the popular media, there’s much talk about “the war on plastics” or regulations that might impact the industry. But regulations are normally set state-by-state, with the strictest impacting plastic utensils, straws, or single-use plastics, such as grocery bags. While these won’t impact flexible food packaging in the near term, public pressure will continue to grow.

Globally, the most significant regulation regarding plastic processors is the United Kingdom’s Virgin Resin Tax, which will go into effect in 2022. There is no similar discussion in North America to date.

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About the Author

Jamie Key is a strategic planning, business development, and supply chain leader who most recently served as Vice President, Corporate Strategy with Sealed Air Corporation. Jamie has held a variety of leadership roles with increasing responsibility, including Global Supply Chain, Sales and Marketing, Vice President and General Manager, and Corporate Strategy leadership, including at Johnson Controls and Flour Daniel in addition to Sealed Air.

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This article is adapted from the GLG teleconference Plastic Packaging Outlook for 2020. If you would like access to this teleconference or would like to speak with Jamie, or any of our more than 700,000 experts, contact us. Please note, Mr. Key was not permitted to discuss Sealed Air Corporation during this teleconference.