Flexible packaging demand growing despite recession

Despite the challenging economic conditions of the last twelve months, sales in Europe’s converted flexible packaging market grew by around 1.6 per cent in 2008 to reach €10.3 billion according to a recent report from leading consultancy PCI Films Consulting. 
Commenting on the publication, study author Paul Gaster says: “the flexible packaging industry has shown steady long term historic growth with its prospects only recently being significantly affected by the global recession.”
 
He goes on to note that industry sales growth in the first half of 2008 were largely offset by steep declines in the second half of the year, following the onset of the global economic crisis in the autumn.
 
While demand in most major food applications saw growth overall, mostly associated with demand growth in Eastern Europe, some non-food sectors such as pharmaceuticals and pet foods grew more strongly.
 
However, the report warns European converters of the growing volume of imported converted materials from outside Europe, which although small at present, are likely to become a larger threat over the next few years.
 
 In 2009 with European flexible packaging demand contracting by 4 – 5 per cent in value, largely the result of declines in raw material prices, which are now being reflected in lower converted flexible packaging prices to customers.

The expectation is also that there is likely to be a real year on year volume (area) decline this year as the recession continues to impact consumer spending and sales of packaged foods.
 
PCI expects European flexible packaging demand to stabilise in 2010 and subsequently return to historic growth trends of 1 – 2 per cent per annum thereafter.