Pundits see folding carton production in the US—and for that matter, North America and the rest of the world—on a steady climb in 2023.
Sales volumes are ticking up, with different market watchers assigning compound annual growth rates (CAGR) that range from 1.8 percent to better than 5 percent. Forecast periods differ, with the earliest concluding this year and the latest carrying through to 2031.
Predictions cite differing US sales volumes. Paperboard Packaging Council (PPC) points to $13.3 billion in 2026; Freedonia Group, $12.8 billion at that time. Research and Markets echoes Freedonia’s call. Meanwhile, Smithers points to worldwide demand at $172 billion that same year. Growth is measurable considering starting points of $9.5 billion and $11.7 billion in the US, and $136.7 billion worldwide.
Consensus comes with critical impact points on business. Universal agreement indicates sustainability, e-commerce, fundamental economics, smart packaging, customer convenience and eye-catching graphic requirements are all contributing to the gradual ascent.
Here’s the rundown on what influential analysts see happening.
PPC reports, “US demand for folding cartons will grow on average by 1.3 percent annually, with the market reaching 5.4 million tons by 2026. Output growth in nondurables, comprised of many carton-packaged goods, is expected to expand by 0.8 percent over the five-year forecast.”
The trade group portends, “General economic fundamentals in the US economy will remain strong throughout the coming years, with consumer spending growing by 1.8 percent from 2021-2026.” It observes, “Shipment growth will be healthiest at the end of the five-year forecast, as the current business cycle is predicted to peak.”
It continues, “The total value of US carton shipments is predicted to grow from an estimated $9.5 billion in 2021 to $13.3 billion in 2026.” Factors including changing consumer spending habits, substitution away from plastic packaging and efforts to reduce plastic waste are proving significant.
PPC holds, “Some of the largest fast-food companies and municipalities across the country seem to be providing hope that paperboard packaging materials are poised to benefit from their environmentally friendly profile. Plastic substitution and environmentally friendly packaging trends should provide a tailwind for carton growth over the forecast.”
Evidence supporting those trends can be found in the photos accompanying this article. They depict PPC’s Carton of the Year, for 2022; Sustainability Application of the Year, Innovation of the Year and Paperboard Package of the Year. All pieces were printed by FTA members.
Big Box Boon
Freedonia Group relays, “Through 2026, demand for folding cartons in the US is projected to rise 1.8 percent per year to $12.8 billion, with an uptick in real growth offset by slowing price increases.”
Analysis finds that, “Food and beverage applications will remain the largest outlet, boosted by growth in food production and increasing spending at big-box retail stores and wholesale warehouses.” Of importance, “Demand for folding cartons in the beverage market will benefit from the popularity of smaller, regional runs of beverages—most notably craft beer—and proliferation of limited, seasonal varieties of hard seltzers and premixed cocktails.”
Freedonia also indicates, “The frozen food market will see relatively healthy growth, boosted by continued consumer interest in convenient trays or bowls, which frequently employ folding cartons as secondary packaging. However, further gains in this market will be limited by competition from paper sleeves for secondary packaging of frozen food.”
Sustainability = Momentum
Research and Markets mirrors Freedonia’s 2026 business volume estimate and pegs it at $12.8 billion. Its basis for growth starts at the $11.7 billion US market for 2020. “The folding carton market share in North America is expected to increase by $2.68 billion from 2020 to 2025, and the market’s growth momentum will accelerate at a CAGR of 5 percent.”
It contends, “Through 2026, demand for folding cartons in the US is projected to rise 1.8 percent per year… Consumer interest in sustainability is boosting the use of paper folding cartons.”
According to the avid industry observer, growth will be supported by:
- Increasing production of beverages, the largest application. In 2021, food and beverage accounted for 61 percent of folding carton demand
- Frozen food will see relatively healthy growth, boosted by continued consumer interest in convenient trays or bowls
- Ongoing gains in the popularity of both takeout and delivery will be amplified by the rise in online ordering and third-party delivery services
- Rising need of pharmaceutical product makers must meet the needs of an aging population
New Business Models
Smithers sees global demand reaching $172.0 billion in 2026 following a 4.6 percent CAGR from 2022 to 2026. It claims, “Converted carton volumes rose marginally from 48.0 million tons in 2019 to 48.3 million tons in 2020 and are forecast to rise further to 61.6 million tons in 2026.”
Elaborating on the observation, Smithers says, “Production volumes rose by just 1.6 percent in 2019-2020 and conversion volumes increased by less than 1 percent during the year. Total cartonboard production—materials sold to converters—projects out to $46.3 billion in 2021, based on latest price estimations.”
According to the Smithers statisticians, “Multiple drivers will help redefine the market proposition for cartonboard.” They include:
- Sustainability’s influence will widen, as consumer, retailer and brand owner concerns over the environment lead to substitution of plastic material. Brands and retailers keen to promote themselves as green businesses are calling for grades with more recycled pulp
- Additional interest in recycled board grades will be generated, with the nascent market for uncoated recycled board seeing the fastest growth
- Legislation in many jurisdictions will place an emphasis on the evolution of sustainable barrier technologies, especially for food-contact applications, like fresh produce trays
- E-commerce has become a focus for many retailers, with online sales rising by 25 percent over one year, even as overall retail sales fell by 3 percent
“Fiber-based packaging, such as folding cartons, enjoys superior green credentials over many alternative packaging materials—principally plastics,” Smithers admits. “This is increasing opportunities for cartonboard to replace or reduce the use of plastic packs in many end-use sectors. Moves happening now involve:
- Replacing thermoformed foamed polystyrene (PS) clamshells and similar formats in foodservice applications
- Replacing other rigid polymers in retail food packaging
- Replacing plastic blister packs and interior retaining structures for pharmaceuticals, such as pills and medical devices
Addressing premium solutions, Smithers notes, “There is already increased demand for high-quality cartonboard grades used in packaging top-end lines of confectionery, premium spirits and cosmetics. A key requirement is to have grades that are optimized for the necessary decorative techniques employed for these products. These include specialized finishing techniques, such as embossing, and adding holographic films.”
Analysts immediately point to experiences contrary to the norm in this arena. “Contrasting the trend for more recycled content, premium cartonboards are generally made from virgin fibers to further enhance both the performance and aesthetics of the board—such as brightness and tactile feeling.”
E-commerce catches Smithers attention as well and prompts multiple pieces of narrative. “Cartonboard—mainly micro-flute formats—are already widely used in the booming e-commerce segment. The growth of e-commerce is now leading to the investment in stronger designs and board grades optimized to give the extra protection needed by the increased handling involved in its distribution network.
“New business models in e-commerce are opening the potential for specific cartonboard designs.” These include:
- Meal kits formats, especially in the US
- Subscription commerce (subcom), has a varied marketplace ranging from dog food to cosmetics
- Consumer electronics sellers and smartphone manufacturers in particular
Technavio, like others, suggests the Asia/Pacific region sets the pace. Following is North America, Europe, MEA and South America, respectively.
“Growth of the folding carton market share can be attributed to factors such as the thriving e-commerce market, increase in consumption of food products, personal care and consumer goods, and a rise in use of novel technologies.”
Analysts observe, “Folding carton market share is expected to increase by 14.41 million tons in the five years leading to 2025, and the market’s growth momentum will accelerate at a CAGR of 5.5 percent.”
Other points of note put forth by Technavio follow. “The smart folding carton market is growing, owing to the rise in the need for sophisticated packaging in applications such as medical monitoring. Also, advances in the printed electronics technology are making the development of smart packaging economical. In addition, smart folding cartons features the advantage of enabling vendors to track the package throughout the delivery process, as they provide customers with product information using QR codes or feature individualized design and messages for customers.”
It concludes, “Incorporation of several technologies such as QR codes, NFC, RFID and embedded bar codes will help in gaining customer trust through improved experiences.”