Plastics to Replace Metals in Closures Market

The U.S. plastic closure market continues to witness steady growth, benefiting significantly from the ongoing conversion from metal to plastic closures, according to a study by Frost & Sullivan (www.frost.com). The study, titled "Strategic Analysis of U.S Plastic Closures Market," shows continuous technological advancements in end-user industries such as beverage, food, personal care, automotive segments, and household and industrial products are expected to provide new growth opportunities for plastic closures in the future. The study says revenues in the plastics closures market totaled $2.93 billion in 2006 and predicts them to reach $3.89 billion in 2013.

With regard to end-user segments, the beverage segment is presently the largest, accounting for almost 33 percent of the total demand. Soft drinks hold the largest share in this segment with 28 percent, followed by bottled water and coffee with 14 and 12 percent, respectively. A notable trend in this segment is that beverage producers are increasingly looking for offshore growth opportunities to offset the maturation in the overall U.S. beverage market. This is driving the cap and closure manufacturers to build capacity outside the United States.

Following the beverage segment, the foods segment is the second largest market for plastic closures. This segment continues to use a relatively large amount of metal, especially in sauces and condiment applications, thereby offering considerable market opportunity. Among other segments, the household and industrial chemicals (HIC) segment is one of the fastest growing market segments for both dispensing and child-resistant closures.

However, the closures market is becoming increasingly competitive, driven by customer demand for novel products at competitive prices. Price competition in commodity-type packaging markets such as continuous thread and tamper-evident closures has intensified slightly during the last few years due to higher manufacturing costs because of increasing raw material and energy prices.

Going forward, market success is expected to hinge primarily on technological investments, good customer service, and technical support. Therefore, it is imperative that closure suppliers heighten focus on consistent product innovation as well as deliver superior customer service.