One way to visualize the US packaging-materials industry might be as a six-legged stool—with each leg supporting the protection, marketing and distribution of millions of different products. Some of the legs, like corrugated and rigid plastics, are large and strong, while others, such as metal cans and glass, are smaller and potentially weakening. Fortunately for US converters and their suppliers, the support provided by flexible packaging is getting larger and stronger by the day.

Depending on who's reporting the statistics, the US flex-pack market is growing at between 3.2 and 3.6 percent a year, putting it halfway between the growth rates (over the last 10 years) of rigid plastics at 3.9 and corrugated at 2.5 percent. Paperboard has been averaging only a 1.1 percent annual rise, while glass is at 0.6 percent and metal cans fell into negative territory since 1996 at -0.4 percent a year.

In his presentation on the 2006 State of the Industry Report, Flexible Packaging Association chairman Peter B. Schottland offered ample evidence of the field's re-bound from the last recession. He also pinpointed which end-use markets are hot and which issues concern converters the most. Schottland spoke as part of the group's annual meeting this spring.

"Value-added" is where it's at when it comes to the overall US flex-pack market. From a total of $21.8 billion in sales last year, 78 percent or $17 billion fell into this category of more colorful, complex constructions versus the $4.8 billion of retail-shopping, storage, trash and other poly bags.

Food continues to dominate the major end-use markets (see chart below). Retail and institutional food segments accounted for 55 percent or $12.2 billion in sales in 2005. Retail non-food and consumer products together made up another quarter of overall sales last year.

So what further-targeted markets does the industry see as opportunities? The converters surveyed listed beverages, confectionery and pharmaceuticals, while suppliers chimed in with pet-food and supplies, snacks, confectionery and pharma. These markets clearly stand out among this year's 13 FPA Achievement Award winners for packaging items such as sports drinks, fondue, dog treats, chewing gum and margarita mix.

While generally "optimistic," the US flex-pack industry remains wary for 2006 and beyond, Schottland says. Rising raw-material costs combined with ever-tightening margins lead the list of converter concerns. Still, 61 percent of flex-pack makers say they plan increased capital-equipment spending for added capacity this year; 6 percent say they're looking at business acquisitions.