Industry News | March 3, 2008

Foodservice Packaging Industry Remains Optimistic

Over two-thirds of manufacturers and their suppliers of single-use foodservice packaging in North America said they expect their sales volumes to be better in 2008 than in 2007, according to the Foodservice Packaging Institute (FPI) "Foodservice Packaging Industry Survey."

This annual survey, which collects information and opinions from foodservice packaging manufacturers and suppliers in North America and Europe, also found that just under two-thirds of the North American respondents expect their profits to be better than last year.

In another positive indication for the industry, nearly three-quarters of North American manufacturers responding said they plan to purchase new machinery in 2008, and almost half of the North American foodservice packaging manufacturers said they plan to expand their operations in 2008, mostly aimed at the foodservice segment of their business.

In Europe, almost three-quarters of foodservice packaging manufacturer respondents are expecting volumes to be better than last year, with almost all expecting profits to be better. One third of respondents indicated they will be purchasing new equipment, and slightly more plan to expand their operations in 2008.

The foodservice packaging industry’s customers are not as optimistic. According to a similar survey sent to North American foodservice operators, just over one third of respondents indicated that they expect their sales to be better this year than last.

Of particular interest to the foodservice packaging industry is that half of the commercial operators responding to the survey indicated that takeout (i.e. drive thru or carryout) accounts for 50 percent or more of their foodservice sales, and 38 percent said they foresee their takeout sales to increase this year.

When looking towards the future, manufacturers and their suppliers see strong growth for single-use packaging in quick/fast casual restaurants over the next five years, with the greatest growth in both that market as well as convenience stores.

While optimism reigns, the foodservice packaging industry and its customers do see some challenges ahead. There were six common issues that ranked in the top ten for the European and North American foodservice packaging industry respondents:

  • Development of new products in response to calls for "sustainable" packaging
  • Government regulations
  • Increasing raw material costs (listed as the top challenge by North American converters and raw material suppliers)
  • Margin compression (listed as the top challenge by European converters and North American machinery suppliers)
  • Mergers and acquisitions
  • Public perception of packaging or foodservice packaging as "waste"
  • Operators indicated they are most troubled by rising costs, particularly for food, packaging and labor.

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