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Foodservice Packaging Industry Upbeat about 2005

Their sentiments were also echoed by their European colleagues as well as North American raw material and machinery suppliers.

The Foodservice & Packaging Institute, Inc., Falls Church, VA, discovered in its "Annual Foodservice Packaging Industry Survey" that in response to a question about "How do you expect 2005 to be compared to 2004, in terms of volume?" three-quarters of 24 converters said this year would be better. Sixteen of them also said last year was better than their 2003 volume.

Eleven of 16 European converters and seven of eight North American raw material and machinery suppliers joined them in a positive assessment of prospects this year.

As for profits, 10 North American converters, who said they would be higher this year than in 2004, were joined by nine European companies and six North American raw material and machinery suppliers in this encouraging estimation.

"As the economy as stabilized in recent years, the optimism of those in the foodservice packaging industry has grown. This year's survey data reflects that optimism. Manufacturers are very bullish about the immediate future of the businesses," John R. Burke, FPI president, said in a press release.

This year's survey continues the packaging industry's positive view of foodservice sales and supports foodservice distribution expectations that packaging-sensitive market segments such as take out or home meal replacement and quick service will experience sufficient growth that would require abundant replenishment of packaging supplies.

When asked what the key influencers of their growth are, North American converters listed: acquisitions, cost control, effort and hope resin stability, internal efficiencies and hopeful raw material cost declines, and new products and customers.

Thirteen of 23 responding North American converters stated that they are planning to expand next year in one of the following areas: building a new plant, expanding existing plant or merger/acquisition. Their expansion plans are fueled by a desire to increase market share, the survey found.

Ten of 18 responding North American converters said they were also planning to expand their presence in the foodservice industry, thus again underscoring that segment's continued favorable prospects this year.

Responding to the question, "Which of the following market segments do you believe will see strong growth in disposables usage in the next five years," the respondents listed these operator types:

  • Quick/Fast-casual restaurants

  • Chain QSRs

  • Convenience stores

  • Grocery delis

  • Independent QSRs

  • B&I

  • Full service restaurants

  • Hospitals

  • Nursing homes

  • Primary/secondary schools

  • Mass merchandise/club stores

  • Transportation

  • Colleges/universities

  • Lodging

  • Recreation

    Among the interesting "next big things" that the North American packaging industry foresees are:

  • Economic barrier application

  • Environmentally based raw materials

  • Environmentally beneficial products

  • "Recyclability" and green-awareness

  • Improved industry profitability based on recovery of raw material costs

  • Increase of imports from China and decrease of North American production

  • Lower-cost packaging alternatives

  • More design innovation with environmentally friendly materials

  • New design paperboard packaging replacing bag in box packaging and stand up pouches

  • North America catches on to doilies - "A chicken in very pot and a doily on every table."

  • Plastic replacing board and paper to greater extent

  • Premium products which are customized for a smaller niche or for large individual end users

  • Reclosable travel lid for drink cups

  • Recycling use of product with post consumer recycled product. Better merchandising, more upscale packaging, and high graphics

  • Spectacular retail packaging through graphics and shapes

  • Universally accepted insulated hot cup with reclosable lids.

    Surprisingly, one topic, which has been hotly discussed by many American manufacturers and distributors, but omitted by the North American packaging companies from their "next big thing" answers, though listed by their European colleagues, was RFID.

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