Caps and closures use rises despite price hikes

By Ahmed ElAmin

- Last updated on GMT

Related tags: Packaging and labeling, Packaging

The global increase in demand for caps and closures will be
partially driven by their increased use in traditionally
closureless food and drink packaging, research group Freedonia says
in its latest forecast report.

Like other types of packaging, the prices of caps and closures has been going up in recent months due to hikes in the cost of raw materials, says Freedonia research analyst Anand Mehta. "However, for many types of caps and closures, there are no alternatives," he told FoodProductionDaily.com. Other processors, like Dannone, have found ways to make cuts in the amount of plastic caps and closures they use. Dannon, Dannone's US subsidiary, recently announced it was removing the overcaps onits six-ounce yoghurts, saving 3.6 million pounds of plastic a year. "Increasing raw material costs due to huge increase in demand from China and the use of value-added configurations like child-resistant closures and dispensing systems, which also tend toemploy an additional secondary overcap, are (also) driving average prices up," Mehta said. Freedonia forecasts global demand for caps and closures will increase at an average annual rate of 4.8 per cent to $25.9bn by 2009, partially driven by accelerating economic growth and risingpersonal incomes. The growth will lie mainly in the world's emerging economies, with closures and other packaging materials among the primary beneficiaries. Caps and closures will increasingly be used in conjunction with traditionally closureless packaging media such as gabletop and aseptic drink cartons and plastic pouches, Mehta said. "Plastics caps and closures taking away market share from metal ones as has been happening for a while now," he said. "In wine, both plastic and metal are taking awaymarket share from cork. Numerous new forms of design come and go, and hard to tell which ones are going to stay. The trends also varies by region." The increasing use of metal drink cans, flexible packaging and multiserving plastic bottles will limit the potential inroads caps and closures are making in the food industry. Plastic closures will continue to supplant traditional metal and, increasingly, cork types of closures. Technological advances and the ongoing shift from glass to plastic and paperboard in the softdrinks market will also drive growth. Beverage producers will remain the dominant market for caps and closures, accounting for almost two-thirds of unit demand in 2009. Within the beverage sector, the strongest gains are expected inproducts such as sports drinks and flavored milk. In the food business caps and closures are most commonly used for sauces and condiments, dairy products, oils, spices and seasonings, and baby foods, among others. In the global caps and closures market Freedonia expects above-average gains in the world's emerging markets, especially countries in Asia. China will lead the way through 2009, surpassing the USas the largest closure market in the world in unit terms. The US, which accounts for almost one-fourth of global caps and closures value demand, also enjoys generally favourable prospects fueled by a continued shift in the product mix toward value-addedproducts. Slower growth will occur in the mature markets of western Europe and Japan, the market analyst believes. External links to companies or organisations mentioned in this story: Freedonia

Related topics: Markets

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