Demand for foodservice disposables to rise in USA

Demand for foodservice disposables is projected to approach US$18 bln in 2013 as per a report by Freedonia. Though advances will decelerate from the past decade due to slower growth in consumer spending and more moderate material price increases, demand for disposables will be supported by a rebound in away-from-home food expenditures as the economy recovers. Rising away-from-home food expenditures will also reflect faster-paced lifestyles and the willingness of consumers to pay for convenient, ready prepared foods. Packaging and service ware made from biodegradable materials will post robust advances from a low base, the result of increased price competitiveness with petroleum-based plastic materials; rapidly expanding capacity; heightened consumer interest in environmental issues; increased pressure on foodservice operators to reduce their environmental footprint; and growing bans on polystyrene-based disposables. The fastest gains are anticipated for packaging products, fuelled by above average revenue growth in the large limited service segment, which accounts for nearly half of overall restaurant revenues but generates a much higher share of foodservice disposables demand. Expanding menu options in limited service restaurants and longer hours to incorporate breakfast and late night snacking will also bode well for related packaging. Wraps and lids will register the fastest growth, with most container types also expected to register healthy gains. The popularity of takeout food from full service restaurants will provide a further boost for packaging, especially since these restaurants often use higher-value disposable containers designed to maintain food temperature and minimize leakage problems. Additionally, packaging gains will be supported by expanded prepared food offerings in supermarkets and other retail stores, along with increased catering activity by limited and full service restaurants. The report believes Foodservice disposables suppliers are increasingly emphasizing the development of sustainable packaging, which seeks to make greater use of packaging materials and systems that promote economic and environmental health. As a result, a plethora of new foodservice disposables products using recycled content or biodegradable materials have entered the market in the past few years, with heightened activity in all product segments. Reflecting a recovery from the US economic slump, the demand for food service disposables is set to see an annual growth of 3.5% to touch US$17.7bn in 2013. Despite a price rise in raw materials and transportation costs, the demand will be supported by continued growth in the share of away-from-home food expenditures, US research firm The Freedonia Group said. The fastest gains are anticipated for packaging products such as wraps and lids, which are forecast to annually increase at 4.2% to reach $8.2bn in 2013. Demand for service ware, including cups, dinner ware, utensils and other products is forecast to grow at 3.2% annually to $8bn in 2013, the report said.Growing presence of prepared foods in supermarkets, warehouse clubs, convenience and retail stores will boost the growth of the disposables market.