U.S. Demand for Dairy Packaging to Reach $4.3 Billion in 2010

Demand for dairy packaging is projected to expand 4.1 percent annually to $4.3 billion in 2010. Growth will be fueled by favorable trends in consumption of a number of dairy products resulting from increased nutritional awareness among consumers and heightened demand for fresh foods as part of a healthier diet. Although aggregate per capita consumption of dairy products will remain essentially flat, packaging demand will benefit from trends such as expanded offerings of dairy items in smaller convenience-oriented container sizes and favorable growth in spending on food eaten or prepared away from home. These and other trends are presented in "Dairy Packaging," a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm.

Among major applications, best gains are anticipated in cultured dairy products and cream. Above-average expansion for cultured dairy applications will be led by continued robust expansion in yogurt consumption and a plethora of new product introductions, including expanded varieties of drinkable yogurt, products targeted at children, and functional types offering health benefits beyond standard nutrients. Packaging demand will be further aided by the popularity of smaller multipacks and even faster growth for drinkable yogurt, which is packaged in bottles rather than less costly cups. Cream applications will be driven by continued solid growth in coffee houses and rapidly expanding sales of coffee in other away-from-home venues, such as convenience stores and quick service restaurants. While per capita milk consumption is expected to continue to decline, the shift to single-serving plastic bottles in favor of gabletop cartons in schools and quick service restaurants tends to boost milk sales in these venues.

Pouches and bottles will present the strongest opportunities, with tubs and cups also expected to record above-average growth. Pouch demand will be fueled by continued opportunities with cheese, along with faster gains in frozen dairy and cultured dairy uses. Bottle prospects will be aided by robust expansion for single-serving plastic bottles with milk and drinkable yogurt. Tub and cup demand will be driven by favorable expansion in cultured dairy applications. However, limited volume growth in frozen dairy and cream cheese production will moderate gains. Slower expansion for cartons and boxes, and bags and wrap will result from the presence of mature applications as well as inroads by bottles and pouches.