Submitted by the Paperboard Packaging Council
According to the Paperboard Packaging Council’s (PPC) recent Trends: 2022-23 Industry Outlook and Market Data Report, US demand for folding cartons will grow on average by 1.3% annually, with the market reaching 5.4 million tons by 2026. Output growth in nondurables, comprised of many carton-packaged goods, is expected to expand by 0.8% over the five-year forecast.
Prepared for PPC members by RISI, a provider of pulp and paper industry intelligence, the Trends Report describes how overall economic trends will affect the folding carton market in the near and far terms. The report states that general economic fundamentals in the US economy will remain strong throughout the coming years, for example, with consumer spending growing by 1.8% from 2021-26.
In addition to the overall economic performance, other factors play an essential role in Trends’ growth forecast for the next five years, including changing consumer spending habits, substitution away from plastic packaging and efforts to reduce plastic waste. Shipment growth will be healthiest at the end of the five-year forecast, as the current business cycle is predicted to peak in 2026. The total value of US carton shipments is predicted to grow from an estimated $9.5 billion in 2021 to $13.3 billion in 2026.
The folding carton industry is not without near-term challenges. A short, two-quarter downturn in economic output is expected in 2023, likely due to a recession becoming more of a concern as inflation eats into consumer budgets. Economic growth will provide a boost for folding carton producers in the coming year, but overseas production will continue to challenge the domestic market as competition with imports persists over the next five years. Competition from alternative packaging methods and materials also will remain a challenge for domestic folding carton producers, especially with increasing prices of boxboard substrates.
On the flip side, decisions by some of the largest fast-food companies and municipalities across the country seem to be providing hope that paperboard packaging materials are poised to benefit from their environmentally friendly profile. Plastic substitution and environmentally friendly packaging trends should provide a tailwind for carton growth over the forecast.
“Trends equips leaders in the folding carton industry with the knowledge they need to prosper in the changing marketplace,” said Ben Markens, PPC president. “Should they make an offensive move? Should they ramp up their defense? Trends helps them figure it all out.”
In addition to forecasts for the overall folding carton market, Trends also analyzes 17 end-use segments, including confectionery, dairy, dry foods, cosmetics, pharmaceuticals and recreational products. This year, nine categories were classified as growing markets, seven as mature and one as declining.
The entire 2022-2023 Industry Outlook and Market Data Report for the folding carton industry is available through the Paperboard Packaging Council (PPC). For over 90 years, PPC has been the North American association for converters of paperboard packaging and their suppliers. PPC works to grow, promote and protect the paperboard packaging industry while providing its members with resources and tools to compete successfully in the marketplace. For more information, call 413.686.9191 or visit www.paperbox.org.