With
the top six players including Silgan Holdings Inc, Global Closure
Systems, Bericap, Crown Holdings, Inc., Berry Plastics, and Reynolds
Group Holdings Ltd. barely accounting for 19.7% in 2014 the global
caps and closures market exhibits a highly fragmented vendor
landscape. Competition prevailing in the market is therefore
considerably high and there are little chances of it declining in the
next few years. According to Transparency Market Research, (TMR), key
players have been adopting competitive strategies to cater to the
dynamic consumer demand and establish a strong presence in the
market. A majority of the companies operating in the caps and
closures market are considering mergers and acquisitions to expand
their footprint in emerging markets and expand their product
portfolio. Besides this, product development has also become a part
of their business strategy for strengthening their market position.
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According
to TMR, the global caps and closures market was valued at US$36.23 bn
in 2014. Rising at a CAGR of 5.2%, the market is expected to reach
US$51.57 bn by the end of 2021. By application, the alcoholic
beverages segment led the market in 2014, holding a share of 57.35%
in terms of revenue. Regionally Asia Pacific is expected to maintain
its dominance in the market through the forecast period.
Demand
from Packaging Industry to Emerge as Major Growth Driver
“The
caps and closures market is significantly gaining from the increasing
demand from the packaging industry,” said a lead TMR analyst.
Packaging extends the shelf life of food and beverages and helps
retain their texture and flavor for a longer time. “A paradigm
shift in consumer preference from unpackaged to packaged food items
in countries such as India, China, and Brazil will augur well for the
packaging industry, thus fuelling the demand for caps and closures,”
added the TMR analyst.
The
market will also gain impetus from the rising demand for plastic caps
and closures as their demand has recently surged in the beverages
industry. The increasing use of PET-based disposable bottles will
translate into lucrative sales opportunities for manufacturers of
plastic caps and closures. Ensuring cost-effectiveness and light
weight are crucial aspects in the production of PET-based disposable
bottles. The use of plastic caps and closures in the industry is
therefore expected to increase in the forthcoming years.
Demand
for Lightweight and Cost-effective Packaging Could Dampen Market’s
Growth
Despite
witnessing favorable growth opportunities, competition from the
flexible packaging industry will dampen the market’s growth to an
extent. Flexible packaging such as pouches is fast replacing
containers that require caps and closures in the food and beverages
industry. This is expected to negatively affect the sales of caps and
closures. Moreover, flexible packaging is lighter in weight because
it is made using materials such as PVC, paper, aluminum, and
polypropylene. This is helping flexible packaging emerge as a
potential substitute for caps and closures.
Due
to recent changes in the packaging industry, manufacturers are under
pressure to lower the cost of caps and closures. The trend of
lightweight packaging is compelling them to produce cost-effective
and lightweight caps. Contrary to this, lightweight caps are more
prone to cracking, sealing, and contamination. This could negatively
impact the market’s trajectory.
Nevertheless,
a dynamic consumer demand has impelled manufacturers to invest in
product innovation. The emergence of novel technologies, designs, and
new materials is expected to create growth opportunities for the
market.
This
review is based on a report published by TMR, titled “Caps
and Closures Market - Global Industry Analysis, Size, Share,
Growth, Trends, and Forecast 2015 - 2021.”
Key
Takeaways:
- Product development is the key strategy adopted by leading players to cater to a dynamic consumer demand.
- Spurred by demand from the packaging industry, global caps and closures market to expand at 5.2% CAGR from 2015-2021.
- Holding over 57.35% of the market in terms of revenue, alcoholic beverages emerged as the leading segment in 2014.
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