In selected packaging markets where paper and plastic compete, plastic’s overallvolume share will continue to expand, reaching 49 percent by 2012.

Thispercentage understates plastic’s share since less plastic is required than paper in mostapplications due to its lighter weight. Plastic’s share of the market will expand moreslowly than in the past decade, as a number of packaging applications are now fairlymature in terms of the share controlled by plastic. Nonetheless, material enhancementswhich enable extended shelf life and increased durability, along with reduced materialrequirements and the addition of convenience features such as resealability and steamcooking, will fuel continued opportunities for plastic packaging. These and other trendsare presented in Paper versus Plastic in Packaging, a new study from The Freedonia Group, Inc., a Cleveland-based industry research firm.

Plastic packaging growth is forecast to outpace that of paper packaging through 2012 in all competitive markets covered in this study and is projected to climb 2.4percent per year through 2012. Advances will result from plastic’s competitive cost andperformance advantages, including light weight, moisture resistance, enhanced barrierproperties and puncture resistance. The fastest market share increases for plastic willoccur in pet food and soy beverage packaging, with good opportunities also anticipatedin protective packaging, foodservice, dairy product, fruit beverage and frozen foodapplications.Slowest volume advances for plastic will occur in relatively saturated marketssuch as milk and baked goods, though plastic will log more rapid growth in smallersized milk bottles, driven by conversions from gabletop cartons in schools and quickservice restaurants. Additionally, below-average growth for plastic in retail bags will bethe result of environmental concerns and/or legislative restrictions.The Freedonia Group, Inc.

Due to inroads by plastic, paper consumption in most of these 17 markets willpost marginal gains or continue to decline through 2012. In a few markets - soybeverages, foodservice, protective packaging, frozen food, dairy products, and meat, poultry and seafood - paper demand is expected to climb above the average pacedespite further inroads by plastic. Despite a sluggish outlook for folding, aseptic andgabletop cartons in a number of these markets, aggregate rigid packaging demand willexpand at a pace similar to that of flexible packaging based on above-average growthfor tubs and cups, trays and other plastic containers such as clamshells and two-piecehigh visibility plastic containers.