US Molded Fiber Food Packaging

Report Overview

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This Freedonia industry study analyzes the $532 million US molded fiber food packaging industry. It presents historical demand data (2012, 2017 and 2022) and forecasts (2027) by product (trays and flats, egg cartons, baskets, tills and punnets, and new products) and applications (eggs, fresh produce, prepared foods, meat, poultry, and seafood, and other foods). The study also evaluates company market share and competitive analysis on industry competitors including Footprint, Genpak, Hartmann, Huhtamaki, Pactiv Evergreen, and Tekni-Plex.

 

Demand for molded fiber food packaging is expected to grow 3.6% annually to $551 million in 2027. While egg cartons and trays will continue to account for the majority of demand, a proliferation of new product introductions will drive healthy growth in unit sales. Market expansion will result from several key factors such as:

• increasing awareness about sustainability and a global shift towards eco-friendly alternatives

• advancements in sustainable manufacturing technologies leading to improved quality and functionality of molded fiber food packaging products

• the rise in corporate responsibility initiatives where companies commit to greener packaging

Sustainability Drives Development of New Molded Fiber Applications

Molded fiber is primarily made from renewable or recycled resources and increasingly uses waste materials such as sugarcane bagasse, bamboo or wheat straw as a fiber source. Increased demand for ecologically sustainable food packaging combined with consumers’ willingness to pay a premium for it drives food packaging companies to offer molded fiber packaging options:

• Bowls have become a more popular option for frozen prepared foods due to their convenience and efficient portioning and molded fiber is increasingly replacing other materials in the packaging of bowl meals.

• Molded fiber cups will see greater use due to recent improvements in aqueous barrier solutions that allow for improved performance.

• Liquid-resistant bottles have created opportunities in such applications as meal replacements.

Technological Advancements & Material Innovations Propel Market Growth

The molded fiber industry is undergoing expansion fueled by technological progress in international markets. This growth is characterized by the expanding slate of high-quality raw materials and the integration of new biodegradable coatings and barrier additives, which are broadening applications and improving the durability and strength of molded fiber. Such developments are stimulating increased demand for sustainable packaging solutions as a preferred alternative to plastic to meet the needs of eco-conscious consumers.

Historical Market Trends

At the highest level, demand for molded fiber food packaging is driven by multiple factors, primarily related to the production and marketing of food products. In turn, growth in this market is dependent on multiple macroeconomic and demographic factors; they include:

• demographic trends such as age, average household size, and levels of disposable income

• changes in the population mix, especially in terms of age cohorts (such as young adults) who are likely to be more environmentally conscious

• trends in food consumption and the mix of food eaten at home versus away from home

• the health of the overall economy and levels of disposable income, which impact sustainably packaged products, which tend to be higher cost

• food preferences (e.g., demand for enhanced convenience or for organic products)

Beyond these basic macroeconomic indicators, other factors that can impact molded fiber food packaging demand include:

• social factors such as health concerns, as brands focused on healthy foods are more likely to use sustainable packaging

• sustainability initiatives, which impact the overall level of packaging used as well as the types of products and materials used

• regulations, especially restrictions on specific materials or types of disposables

In addition, several competitive variables determine the mix of packaging types used and their cost, including:

• raw material and conversion costs

• changes in the mix of foods being packaged

• trends in packaging size and format, such as shifts toward smaller single-serving packages, family size units, or multipacks

• the proportion of food that is sold via retail channels versus foodservice establishments

• environmental and regulatory factors, including trends such as source reduction, the use of recycled content, and recyclability

In real terms, demand saw its fastest growth of the decade in 2020, as the pandemic forced consumers to dine at home more often, leading to a surge in food retail sales. With the normalization of food retail sales in 2021 and 2022, sales in unit terms slowed significantly. However, a combination of supply chain issues and rising raw material costs caused molded fiber food packaging prices to rise, leading to an acceleration in market value in those years.

Demand by Fiber Type

A mix of other materials can be used in the production of molded fiber food packaging including:

• wood pulp

• sugarcane

• bamboo

• wheat fiber

Demand for molded fiber food packaging is forecast to rise 3.6% annually to $551 million in 2027. Gains will be driven by sustainability trends supporting recyclable, biodegradable, or compostable materials such as molded pulp, bamboo, and sugarcane, which are now being targeted as alternatives to plastic and paper in several applications.

The market share and outlook for molded fiber food packaging materials varies significantly:

• Molded wood pulp has been on the market for a long time but is seeing renewed interest due to sustainability trends. Molded wood pulp can replace plastic foam in products like trays.

• Molded fiber packaging based on bamboo, sugarcane, or wheat fiber recently introduced to the food packaging market and will record robust gains from a small base, particularly in the prepared foods and meat alternatives categories.

Pricing Trends

Through 2027, the average price for molded fiber food packaging is forecast to grow less than 1.0% from a high 2022 base that resulted from pandemic-related supply chain issues. The forecast will reflect a variety of diverging trends:

• Advancements in manufacturing and tooling processes will decrease the price of production, particularly for nonwood fibers.

• Increased focus on performance and especially aesthetic of molded fiber products will increase average price, particularly for packaging of higher end products such as cosmetics and electronics.

• Growth in domestic production will initially increase pricing as manufacturers switch to newer manufacturing processes. However, this will lead to decreasing production costs and lower average prices over time.

In general, prices for molded fiber products are determined by the following factors:

• raw material availability and costs

• labor costs

• shipping and transportation costs

• supply and demand balances

• customization, design, and printing costs

Unlike plastic products, molded fiber exhibits relative price stability, as the material is not influenced by swings in the oil industry or resin prices. Average prices for molded fiber products are instead largely affected by changes in the costs for such raw materials as post-consumer paper products and agricultural waste – materials that are less prone to dramatic price fluctuations.

Molded fiber prices are also determined by product type and manufacturing requirements (e.g., the degree of complexity, customization, and tooling necessary). While manufacturers are working to lower prices and make molded fiber more price competitive with other materials, advances to improve the quality and range of applications for molded fiber packaging are increasing average product prices.

Competitive Packaging Materials

Molded fiber primarily competes with the following materials:

• EPS – in food trays and egg cartons

• rigid polyethylene terephthalate (PET) – primarily in egg cartons

• paperboard

In many cases, the above materials are less costly than molded fiber, and may perform better in certain applications (such as where high strength or moisture barriers are required). Nonetheless, molded fiber packaging offers key advantages over each of the above materials that promote its use.

Molded fiber also competes with other materials poised as sustainable alternatives to traditional packaging – such as bioplastics – to a limited extent, particularly in replacing traditional rigid plastics. Bioplastics are better suited for rigid plastic applications for which visibility and crush resistance are especially important, such as clamshells for salads.

Demand for molded fiber will benefit from sustainability initiatives targeted at replacing plastic packaging, especially foam containers. While molded fiber has been used for years in food packaging for applications such as eggs and produce, new production technology and the use of waste materials such as sugarcane – as well as the growing importance of sustainability – will drive growth.