U.S. beverage container market has solid outlook

Food & Drink Weekly, Sept 8, 2003

According to a five-yearly report from the Freedonia Group, U.S. demand for beverage containers, by far the biggest market in the world, is projected to increase 1.7 percent per year to 224 billion units in 2007, giving the sector an estimated value of $17.5 billion. The report also highlights the belief that U.S. beverage consumption growth, and hence related container sales, will be driven by healthy levels of consumer spending, favorable demographic trends, tap water safety concerns, high levels of new product introduction and marketing activity, and the further development of nontraditional distribution channels.

Carbonated soft drinks and beer will remain the largest markets for beverage containers through 2007, with unit shares of 44 and 24 per cent, respectively. By 2012, bottled water will surpass fruit beverages and milk as the third largest drink container market. Smaller non-alcoholic drink markets will also fare well, the report says.

Accordingly, plastic containers (including fast-growing pouches) will continue to represent the growth segment of the industry, as they further supplant metal, glass and paperboard alternatives. Advances will be propelled by PET-bottled water's emergence as a popular beverage in its own right, coupled with the proliferation of single-serving soft drink bottles, which will continue to intensely compete with aluminum cans. Plastic containers will account for over 30 per cent of total unit sales in 2007, and, given their large size relative to other beverage containers, will represent 54 per cent of packaged beverage volume--the report claims.

Metal cans will remain the dominant beverage container in unit terms, based on their heavy use in the sizable soft drink and beer markets, and the popularity of can multipacks. Despite favorable opportunities in vending, cans are predicted to continue to lose ground to plastics and/or glass in these bedrock markets. In soft drinks, cans face further losses to single-serving PET bottles. Outright declines are expected in beer uses, reflecting low growth in beer production and steady inroads by glass, especially in premium beers and in the growing 'malternatives' sub-segment.