U.S. Box Demand to Reach $37.8 Billion in 2014

April 5, 2010 - Demand for corrugated and paperboard boxes is projected to increase 2.3 percent annually through 2014 to $37.5 billion, with gains driven by an expansion in manufacturing output after the declines registered during the 2004-2009 period. In particular, an acceleration in shipments of nondurable goods such as food and beverages will support demand for related boxes, according to a new study conducted by The Freedonia Group.

Additionally, box demand will benefit from the increasing importance of higher-value boxes that can support improved printing and graphics as producers continue to look for ways to heighten the visual appeal of boxes in order to offset competition from alternative packaging formats. Although boxes with superior graphics capabilities are more prevalent in the folding carton segment, the continued popularity of mass retailers and warehouse club stores has compelled many boxmakers to develop corrugated boxes that can also serve as appealing product billboards. Box demand will also be supported by trends favoring Internet-based shopping.

Corrugated, Solid Fiber Boxes to Remain Dominant

Sales of corrugated and solid fiber boxes, which accounted for nearly 70 percent of demand in 2009, will increase 2.7 percent annually through 2014 to $26.6 billion. Advances will be aided by their well entrenched position as the shipping container of choice in nearly all manufacturing sectors.

Demand will also benefit from the favorable environmental profile of corrugated boxes, which will become increasingly important as producers continue to seek ways to adopt sustainable packaging practices. Moreover, value gains will be bolstered by heightened demand for more costly linerboard grades that can support high-quality printing and graphics.

Folding Boxes Face Competition from Other Packaging

Demand for folding paperboard boxes will rise 1.5 percent per annum through 2014 to $10.5 billion, slower than the corrugated box pace as folding cartons face stiff competition from alternative packaging (e.g., pouches, blister packs and clamshells) in many markets. Source reduction efforts, many of which involve the elimination or downsizing of cartons, will also slow demand. However, gains will be supported by advances in printing and graphics capabilities and a more favorable environmental profile than plastic packaging. Set-up box demand will be supported by their widespread use in high-end confectionery, silverware and jewelry applications.

Food, Beverages to Remain Largest Box Market

Food and beverages will remain the largest box market, accounting for more than 40 percent of demand in 2014. Good prospects for boxes are expected in markets such as frozen foods, dairy products, and meat, poultry and seafood products. Other nondurable goods markets offering favorable opportunities for boxes include cosmetics and toiletries, and rubber and plastic products.

In the durable goods sector, box demand will post healthy gains in machinery and equipment, and other products such as motor vehicle parts and instruments markets as both the industrial machinery and automobile markets recover from sharp declines in the 2004-2009 period.

In non-manufacturing markets such as retail shipping and carry-out foodservice, box demand will be supported by consumer preferences for online shopping and food prepared or eaten away from home.

About the Study
This new Freedonia industry study, Corrugated & Paperboard Boxes, presents historical demand data (1999, 2004 and 2009) and forecasts for 2014 and 2019 by board type, product and market. The study also considers market environment factors, evaluates company market share and profiles 26 industry competitors.

For further information, visit Fredonia's website: www.freedonia.com.

SOURCE: The Freedonia Group, Inc.

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