U.S. Corrugated & Paperboard Box Demand to top $36 billion by 2016

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Through 2016, growth will benefit from expanded food, beverage, and durable goods output, as well as from a rebound in construction spending, which will stimulate demand for goods and materials used in construction applications. Advances will also reflect a trend toward more expensive boxes such as corrugated types, folding cartons that offer high-quality graphics and printing, and boxes that are retail- or shelf-ready, the report notes.

Corrugated and solid fiber boxes will post the fastest shipment gains through 2016, a result of their position as the shipping container of choice for a broad array of durable and nondurable goods. Though folding carton shipments will increase more slowly due to competition from other packaging formats, growth will accelerate from the performance of the 2006-2011 period based on improved manufacturing output in food and beverages in light of a strengthening economy. Good opportunities are also anticipated in such markets as chemicals and pharmaceuticals, and foodservice and carryout food.

Set-up box shipments are expected to continue their long-term decline due to their higher cost relative to other box types and surging levels of imports from countries (such as China) with lower labor costs. Nonetheless, overall demand will benefit from the entrenched position of set-up boxes as upscale packaging for premium confectionery products and fragrances.

Food and beverages represent the largest single market for corrugated and paperboard boxes, accounting for 50% of total demand in 2011. The beverage and frozen food segments are expected to post the fastest gains, with sugar and confectionery, and grain mill product uses expected to increase more slowly. Despite sustainability efforts aimed at reducing excess packaging by eliminating boxes and cartons or reducing the amount of paperboard used in food and beverage cartons, continued high oil prices and the good environmental profile of paper based packaging will support ongoing use of boxes in the vast food and beverage market.

The durable goods and nonmanufacturing markets are expected to post above average gains through 2016, supported by a recovery in the broader economy. Moreover, a rebound in construction expenditures will drive demand for household appliances, furniture, and other durable goods, as well as related boxes. The continuing popularity of online shopping will propel healthy gains for corrugated boxes used in the fulfillment of Internet sales.

Paperboard demand will rebound from the declines of the 2006 - 2011 period as output in the manufacturing sector improves. However, volume growth will be restrained by heightened use of lighter weight, high-performance containerboard in light of sustainability and cost control efforts. Among other materials used in boxes, above average growth for inks will be driven by trends favoring boxes with high-quality graphics. Healthy prospects are also expected for wax-free alternative coatings, which can provide the moisture resistance of conventional wax-coated boxes while being fully recyclable.