Thin wall plastic packaging like tubs, cups, pots, trays, clamshells and plastic jars provide a means of supplying consumer appeal, convenience and product protection, while reducing the carbon footprint versus more traditional materials, such as glass or metal. TWP applications include yellow fats, yogurt, ice cream, meat, bakery, fresh fruit and vegetables. Microwave, freezer, and oven-proof containers are a rapidly growing market enabled by developments in manufacturing technology and barrier materials. Innovative designs and decoration technologies are used as tools that help OEMs communicate brand image to the target consumer.
In recent years, TWP has become a space of dynamic structural changes in the rigid plastics market, as per a report by AMI Consulting. With the consumption of 3.1 mln tons of polymer in 2015, TWP is a large and relatively stable market in Europe. Nonetheless, the search for higher margins and market positioning causes the industry to focus on improvements in material and process engineering. The past few years have been particularly productive for the industry and advances in process technology synergistic with polymer science have enabled changes which have facilitated the emergence of new applications. TWP is a market with a clear definition in Europe. Fuelled by consumer demand for convenient and attractive packaging solutions, Thin Wall Packaging is increasing its penetration within food applications in particular. Facilitated by the expansion of centralised retail distribution across Europe and technological advancement in plastics engineering, food processing and packing, traditional packaging media are under increasing pressure from the superior functionality offered by plastic alternatives. The ability of plastic TWP to enhance brand modernity, aesthetics and usability, and offer differentiation is driving demand and intensifying competition in its supply.
Concomitant with these changes have been the changes in the supply chain. The industry actively consolidated and the leaders attempted to re-define and re-structure their businesses to maximise technical competence and to create a stronger negotiation platform. This has driven the disposal of non-strategic business units and targeted investment. There has been significant site rationalisation, exchange, production re-location and acquisition amongst the leaders. Multi €b converters have started emerging in the global multi-sector packaging arena, including Reynolds (Rank Group), Berry Plastics and Amcor. RPC Group following the acquisition of Promens and Global Closure Systems, and Coveris have reached these ranks as well. In 2015, the top 10 converters of Thin Wall Packaging in EU28+3 accounted for 43% of the market. Outside of the leader base, the supply in Europe remains relatively fragmented and more consolidation is expected.
Retailers remain ever stronger customers of TWP, driving improved quality standards of value products. Brand owners employ a range of packaging solutions to capture discrete marketing opportunities, using multiple formats. This enables brand owners to monitor and compare costs, alter the packaging mix and spread risk. Over the next five years those suppliers with a focused business strategy are expected to continue to strengthen their market position. TWP in Europe remains comparatively fragmented, but the consolidation is on-going. Only by probing into the activity of both large and smaller producers can the size and structure of demand be properly demonstrated, and the variations by end-use application highlighted. This depth of analysis serves to highlight opportunities and threats by end-use application and provides insight into winning supplier strategies.
According to another report from AMI, TWP is a market with a still unclear definition in North America. The intelligence perceives TWP from the perspective of the end-use market and packaging formats. The TWP industry encompasses thermoformed and injection moulded plastic tubs, pots, trays and cups. The 8 bln lbs industry can be split into foodservice and retail packaging. The proportion of foodservice and retail TWP in North America is skewed towards foodservice, which accounts for 56% of the market by volume. This translates to the demand of nearly 4.3 bln lbs in 2012. The remaining 44% of TWP volume was used in retail packaging applications, with volume demand equivalent to 3.4 biln lbs in 2012. TWP is a market with a still unclear definition in North America. AMI Consulting perceives TWP from the perspective of the end-use market and packaging formats. The TWP industry encompasses thermoformed and injection molded plastic tubs, pots, trays and cups. The 8 bln lbs (3.5 mln tons) industry can be split into foodservice and retail packaging. The proportion of foodservice and retail TWP in North America is skewed towards foodservice, which accounts for 56% of the market by volume. This translates to the demand of nearly 4.3 bln lbs in 2012. The remaining 44% of TWP volume was used in retail packaging applications, with volume demand equivalent to 3.4 bln lbs in 2012.
Retail TWP applications include for example chilled dairy cups, meat/fish/poultry tray, fruit punnets, margarine tubs and long-life food containers. The intense retail environment is increasing retailer focus on ways to differentiate from the competition, efficiency gains to lower margin pressure, rationalisation of SKUs, and inventory reduction. Price competition drives efforts to streamline supply chain and improve vertical coordination. It has become imperative for the North American TWP industry to review operations in search for cost savings and efficiency optimisation to counteract the ever squeezing margins and offer more competitive prices for customers addressing consumer spending constraints.