The prevalence of plastic containers kept the industry from declining, despite the recession
Los Angeles, CA (PRWEB) September 22, 2013
Whether a consumer is buying a soda at the corner store or purchasing laundry detergent at the supermarket, plastic is the preferred way to package these staple products. The prevalence of plastic containers and bottles, however, has not kept the industry immune to economic volatility. In the five years to 2013, industry revenue is expected to increase only a marginal 0.2% per year on average to $13.0 billion.
According to IBISWorld Industry Analyst Antal Neville, “The Plastic Bottle Manufacturing industry relies on several key industries to purchase its products.” Soft drink producers, for example, account for over half of industry revenue. However, since 2008, revenue in the Soda Production industry (IBISWorld report 31211a) has declined due to changes in consumer tastes and reduced spending during the recession. This decline has led to weakened demand for the plastic bottles in which soft drinks are packaged. In 2010, downstream markets began their recovery from the recession due to renewed beverage consumption. Industry revenue has since caught up to prerecession levels and is expected to rise 0.7% in 2013.
Meanwhile, the industry has had to contend with production abroad; industry imports are expected to grow at an average annual rate of 3.7% in the five years to 2013. The United States has been a net importer of plastic bottles and containers since 2004. As globalization increases, foreign imports will continue to challenge the viability of domestic manufacturing, forcing domestic manufacturers to innovate or decrease per unit production costs to stay competitive. However, “import penetration will level out over the next five years as wage costs in China rise, preventing Chinese manufacturers from easily undercutting domestic prices,” says Neville.
Mergers and acquisitions among large players have increased, an effective way for established players to increase their market share in a mature industry. Large players can more easily undertake product development to give them an edge over competitors. Furthermore, the Plastic Bottle Manufacturing industry has a moderate level of market share concentration. This industry's four biggest players are Graham Packaging Company, Plastipak Holdings, Consolidated Container Company and Constar International. Furthermore, despite increased prices, plastic will remain a more effective, lower-cost alternative to glass or metal packaging, ensuring its continued use by downstream buyers in lieu of those substitutes.
For more information, visit IBISWorld’s Plastic Bottle Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
The Plastic Bottle Manufacturing industry manufactures a range of bottles from different plastic compounds based on their end use. These bottles are then sold to beverage, food and chemical manufacturers for packaging soft drinks, milk, condiments and household and automotive chemicals. This industry does not manufacture reusable plastic bottles or other plastic containers.
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