PACKAGING TECHNOLOGY A N D SCIENCE VOL 5 159-163 (1992)
The Structure of the European Packaging
Industry"
Carl H. Wendt
PLM AB. Sweden
Keywords: Packaging statistics; food and beverage packaging; consumer packaging Europe
The paper presents a rough description of the
structure of the European packaging industry with
a focus on food and beverages and to comment on
some issues facing this industry during the nineties.
It will, not, however, attempt to interpret this in
terms of health; such analogies are too adventur-
ous; already a simple symptom such as high tem-
perature is considered to indicate bad health in
humans but good health in the industry.
The presentation is based on statistics used by
PLM for strategic analyses, if they are wrong then I
am responsible. If there is a bias towards beverage
packaging this is because it makes more sense for
PLM to have a clearer picture in areas where we
have substantial business interests.
In this presentation, values are used that make
sense from the business point of view - sales value
or number of units - in preference to weight, even
though in some cases statistics in weight are more
easily available.
TOTAL MARKET SIZE
The size of the market for consumer packaging in
western Europe is estimated to be about 50 billion
ECU (or $60 billion, E35 billion or about 350
billion in FRF or SEK). This figure includes non-
* Paper presented at the Euro Food Pack, Food Packaging
Conference, London, 4-5 March 1992.
0894-3214/92/030159-05$07.50
0 1992 by John Wiley and Sons, Ltd.
food consumer packaging as well as food and
beverage packaging. If we substract 20% for the
non-food portion this leaves about 40 billion ECU
for food including beverage packaging.
If we relate this to the retail sales value of the
total food and beverage market in Europe, which is
estimated at about 550 billion ECU in 1991, we find
that packaging on average accounts for 7-8% of the
value of the food and beverage market.
MATERIALS
Starting again from the figure of 50 billion ECU for
total European sales of consumer packaging, this
can be broken down in different ways. Figure 1
shows an estimate of the market shares for packag-
ing of different materials in 1987. However, the
relative proportion of the different materials is not
constant, it changes. In Figure 1 it is apparent how
the relative market shares have changed from 1967
to 1987.
In terms of unit sales, glass packaging has seen
an interesting development during the 1980s and is
now slowly increasing from a minimum in the
middle of the decade. Metal packaging in total
remained nearly constant but, as we will see later,
the balance between different end-uses changed.
Plastic packaging's share increased substantially.
Received 6 March 1992
Revised 13 March 1992
160 C.H. WENDT

-
Consumer Packaging Europe
Relative importance of Packaging Materia Is
Plastics

1967 estimate. 1987 estimate

Total market value 350 bill. SEK
Figure 1. Estimated market share for different packaging materials in 1987

END-USES The plastics segment is considered to consist of

roughly 50%, by value, flexible packaging and 50%
Let us start again with the 50 billion ECU estimate rigid packaging. The analysis of end-use market
of the market value for food and beverage packag- shares becomes more difficult when you study the
ing. Out of this total we estimate that beverage end-uses for materials such as plastics, paper and
packaging accounts for about half and non-bever- cardboard and to determine what is food packag-
age food packaging the other half. It has to be ing and what is not - and what is delivered as a
stressed, however, that figures are ‘guesstimates’; container and what is not.
consider for example, the question of whether milk
is a food or a beverage.
During the 1980s the beverage packaging market INDUSTRY STRUCTURE
has seen considerable changes. PET bottles for
carbonated soft drinks and mineral water have There are clear concentration tendencies in the
shown dramatic growth. There also is a clear food and beverage industry. Figure 2 shows that
growth trend in beverage cans. At the present time the market share of the top 10 companies in food
we estimate that about 70% of the glass containers and beverages has increased from about 20% in
are used for beverage packaging and 30%for food; 1987 to about 28% in 1991 - a 75% increase in
for metal containers the percentages are reversed. absolute terms considering the expansion of the
If we look at non-beverage food packaging the total market. The trends are the same in the beer
pattern is different, glass remains relatively stable, brewing industry, in soft drinks and the food indus-
while the metal can market is shrinking. The mar- try.
ket for plastics and cardboard packaging is advanc- We see a similar pattern in the food and beverage
ing. packaging industry. Figure 3 shows that the market
EU R 0PEA N PACKAG ING IN D USTRY STR UCTU R E 161

CONCENTRATION IN THE FOOD AND

BEVERAGE INDUSTRY
EUROPE
TOP 10 MARKET SHARE

1987 1991 E
450 bn ECU 565 bn ECU
Figure 2. Change in market share of top 10 food and beverage companies

Consumer Packaging Producers (Europe)

Ranking of players
\

U
Total market value: 50 billion ECU
Figure 3. Market share of consumer packaging producer companies in 1991
162 C.H. WENDT

BARRIER PLASTIC CONTAINERS

Europe
Million 100
units
=Trays Pots 0Bowls
80

60

40

20

0
1988 1989 1990 1991 P
Figure 4. Growth of the barrier plastic containers market

RETORTABLE BARRIER CONTAINERS

U.K. Ready-meals market
Million 32
units

24

16

0
1988 1989 1990 1991 P 1992P
Figure 5. Growth of the retortable barrier containers market
EUROPEAN PACKAGING INDUSTRY STRUCTURE
share of the top 10 consumer packaging companies
in Europe is about one-quarter of the total market
and the rate of the concentration process in the
consumer packaging industry is the same magni-
tude as in the food and beverage industry.
The concentration trend in the food and bever-
age packaging industry is strongest in the ‘tradi-
tional’ products, such as metal cans and glass
containers. Plastics packaging is a younger indus-
try, where more remains to be done in product
development, market structure and environment
control. The structure is still very fragmented, but
in some segments a concentration process has
started.
OTHER TRENDS
An important question, especially related to health
aspects, is: what dynamism can we see in food
packaging? The growth trends for PET bottles and
beverage cans in the beverage segment have been
mentioned already, but what about food packag-
ing?
One dynamic segment relevant to the Food
Packaging Conference is shelf-stable rigid barrier
plastics packaging, where the rate of growth is
impressive (Figures 4 and 5). Many of the players in
this new and still very risky game are the same as
163
those in the top ten list for traditional metal
packaging. At least they seem to know what busi-
ness they are in and what their customers want.
There is no doubt that environmental issues
related to packaging will influence market develop-
ment in food packaging.
SUMMARY
(i) The structure of the industry changes rapidly
- the big corporations merge or make acqui-
sitions to become even bigger.
(ii) In this way a larger portion of the business
belongs to international companies well pre-
pared for the integrated EC market.
(iii) There is considerable market dynamism with
important growth trends, particularly in some
beverage segments but also in some food pack-
aging segments, such as shelf-stable high-
barrier packaging.
(iv) The packaging industry as a whole seems less
affected by the recessive tendencies typical for
some other markets, such as automobiles and
building construction at the present time.
(v) The pressures generated by new legislative
tendencies dealing with packaging, waste man-
agement and environment will strongly in-
fluence the packaging market development in
the 1990s.