U.S. Demand for Corrugated and Paperboard Boxes to Increase 2.4% Annually Through 2014

Corrugated and paperboard box producers will look for ways to heighten the visual appeal of boxes in order to offset competition from alternative packaging formats and thus increase demand.

May 19, 2010 - Demand for corrugated and paperboard boxes is projected to increase 2.4 percent annually through 2014 to $36.4 billion, with gains driven by an expansion in manufacturing output after the real 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 by The Freedonia Group.

Box demand will also be supported by trends favoring Internet-based shopping, the study shows.

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 serve as appealing product billboards.

Corrugated/Solid Fiber Box Segment to Remain Dominant,
Grow Fastest

Sales of corrugated and solid fiber boxes, which accounted for more than 70 percent of demand in 2009, will increase 2.7 percent annually through 2014. 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.

Demand for folding paperboard boxes will rise 1.8 percent per annum through 2014, slower than the corrugated box annual pace of growth 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 restrain 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.

SOURCE: The Freedonia Group

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