The ubiquitous grocery bagger's question, “Paper or plastic?” is being answered more and more with a resounding “Plastic” when it comes to consumer packaged-goods makers and their choice of converted materials and containers.

In 18 markets where plastic and paper compete directly as packaging materials, plastic is expected to increase its share of the market (in pounds) to 53 percent in 2010, according to a new study by Cleveland-based researcher The Freedonia Group, Inc. (www.freedoniagroup.com). This percentage understates plastic's share because less plastic is generally required than paper in most applications due to its lighter weight. Plastic's share of the market will expand at a slower pace than in the past decade, as a number of packaging applications are now fairly mature in terms of the share controlled by plastic.

Overall, volume for these two fields will climb from 23.6 billion lbs last year to 25.6 billion in 2010—about 1.7 percent annually.

Growth in demand for plastic packaging is forecasted to outpace that of paper packaging by a 10:1 margin through 2010 in all competitive markets covered in the Freedonia study. Demand will rise 2.9 percent a year versus paper's increase of only 0.3 percent (see chart). While barely in positive territory, this contrasts with the 1.0 percent annual decline in paper-packaging demand seen in the 2000-05 period.

Plastic's advances will result from its competitive cost and performance advantages over paper, Freedonia says. The most rapid gains in market share are anticipated in soy and other nondairy beverages and pet food applications, with the frozen food, fruit beverages and detergent markets also expected to see favorable increases. Converters, take note: Robust growth is also expected for single-serve plastic milk bottles, driven by conversions from half-pint gabletop cartons in quick-serve restaurants and school lunch programs.

While paper packaging will post marginal advances or continue to decline in most competitive markets, above-average opportunities are expected in foodservice, dairy and soy-milk applications, with organic milk also a growth niche, reports Freedonia. Foodservice demand will be sparked by growing use of paperboard boxes, cartons, buckets and pails, wraps and bags. While most dairy applications for paper are mature, watch for frozen novelties to drive folding-carton growth.

Solid prospects for paper in soy-beverage packaging will result from the ongoing shift of soy drinks into the mainstream marketplace, as well as the general preference for paperboard containers in promoting a natural image. Thumbs up: Think gabletops and aseptic cartons.