Wednesday, 7 May 2014

Pouch Packaging Sector to Reach $9.4 Billion by 2018

Pouch Packaging Sector to Reach $9.4 Billion by 2018
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It’s been a little more than one year since Capri Sun took a beating over research conducted at Indiana State University that discovered five different types of mold in the popular kids’ drink. The research project was triggered after reports of consumers finding fungal mats in the beverages hit the mainstream media, causing consumer outcry for more transparency.

The fungal growth occurred because Capri Sun does not contain preservatives, and both Kraft Foods (the maker of Capri Sun) and scientists were quick to point out that for the majority of people, other than being grossed out, the fungal mats pose no harm to humans except possibly for patients who are immune-compromised or have some other underlying diseases. Kraft’s website stated that the mold was a result of breaches in packaging and a lack of preservatives in the drink.

So why is this important more than a year later? Over the past month, I have noticed Capri Sun ads touting new pouch packaging with clear bottoms—clearly a move by Kraft to convey more transparency. According to Kantar Media, Capri Sun spent millions to the development of the clear panel, and nearly doubled its marketing budget to $45 million over last year.

According to the company’s website, “We made the change for several reasons. Moms across the country told us they like that Capri Sun juice drinks are made with no artificial preservatives, colors or flavors, but wanted the ability to see inside the pouch. The clear bottom makes it easy to verify that the Capri Sun kids love contains all the goodness moms expect and nothing they don’t."

So why didn’t Kraft just scrap the pouch packaging? The answer: Because pouch packaging clearly presents food and beverage makers with a number of advantages.

In fact, demand for pouches in the United States will reach $9.4 billion by in 2018, fueled by above average gains for stand-up pouches stemming from sustainability, function, and marketing advantages over alternative packaging media, according to a new report from Freedonia.
Advances for stand-up pouches will be well above those of most other packaging types, resulting from growing interest among packaged goods companies. This interest is based on savings achieved in shipping costs due to the lighter weight and lower material use of stand-up pouches compared to rigid containers. Also supporting gains will be the ability of stand-up pouches to differentiate products on store shelves due to their use of high-quality graphics. In addition, heightened use of reclosing and dispensing components will increase the competitiveness of pouches against rigid containers.

According to the report, in flat pouches, the fastest growth will be seen in four-side-seal pouches, driven by rising demand in medical and pharmaceutical markets, and in food applications, such as meat, poultry, seafood, sauces and condiments. Flat pouch advances will also be supported by improved barrier structures and the incorporation of such convenience features as resealable closures, spouts, and tear notches.

Spouted pouches are expected to register double-digit growth through 2018, driven by expanding use of pouches in general, along with the functionality and convenient dispensing afforded by spouts. Baby food, sauces and condiments, and other processed food applications will offer solid opportunities for spouted pouches. In fact, spouted pouches for baby food provide advantages in terms of portability and convenience as they enable self feeding. Rapid advances are also expected in the beverage market as spouted pouches become more common with alcoholic beverages, premixed cocktails, sports drinks and energy drinks.

Food and beverage markets accounted for 80 percent of pouch demand in 2013. Stand-up pouch demand will outpace that of flat pouches based on their combination of performance, strong shelf appeal, user friendliness, and sustainability qualities due to their lighter weight and reduced material use. Value gains also will be fueled by heightened demand for larger sized pouches, spouted pouches, pouches with carrying features, and pouches that use self-venting films to enable steam cooking of contents in the package.

Through 2018, the fastest-growing food and beverage applications for pouches will be pet food and meat, poultry, and seafood.

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