North America Flexible Plastic Packaging Market

The increase in e-commerce activity throughout North America has led to an increased need for the flexible plastic mailers that offer the durability and lightweight characteristics necessary for high-volume parcel shipping. In addition to their cost efficiencies of lower dimensional weight charges and reduced shipping costs, the use of PE and co-extruded film mailers provides retailers and fulfilment centres with a stable, durable product that is capable of withstanding the severe conditions of parcel shipping as a result of numerous punctures and tears, due to the complexity of modern packing lines. Furthermore, these flexible mailers enable automated packing lines and allow for increased throughput during busy shopping times, when most retailers experience peak demand. In response to the demand for recyclable packaging materials, mono-material PE flexible mailers that can be dropped off at retail locations or placed into specialized collection bins are being utilized more frequently and contributing to the growth of flexible packaging production throughout the e-commerce supply chain.

The flexible plastic packaging market in North America is facing major restraint because the availability of recycling systems for films is limited and is not evenly distributed. In the majority of municipalities, there is no curbside collection service for flexible films, and consumers have to rely on store drop off sites, where recovery rates are low. There is still a significant lack of washing, reprocessing, and pelletizing facilities in different regions, leading to increased difficulty to convert post-consumer flexible films into high-quality recyclate for use in new packaging. The lack of necessary facilities will further impede converters' transition to recyclable mono-material structures as compliance under future EPR policies becomes an increasing burden, while at the same time forcing both brands and converters to continue their reliance on virgin resin leading to increased costs and sustainability challenges.

The North America flexible packaging market has a significant opportunity around the growth of chemical recycling-ready films being developed, in particular with CR-grade polyethylene (PE) and polypropylene (PP) constructions that have been engineered specifically to work with newer depolymerization technologies. The investments being made by large resin manufacturers and recyclers into pyrolysis and solvent-based chemical recycling facilities are providing converters with the ability to develop flexible films that will perform at the same level as traditional films while satisfying the feedstock specifications necessary to be accepted into chemical recycling streams. As a result, the creation of food-grade circular polymers allows brands to achieve their post-consumer recycled (PCR) goals that would otherwise not be possible through mechanical recycling processes. Chemical recycling-ready films represent an emerging, high-value growth segment as the alignment of material science, recycling technology and brand sustainability commitments continues to grow.

The North American flexible plastic packaging market is experiencing unprecedented volatility in the price of resin due to the significant reliance of converters on sourcing PE, PP, BOPP and PET film. The price of resin has been affected significantly by instability in petrochemical feedstocks, global geopolitical events, as well as unplanned outages from the major Gulf Coast facilities. The instability in resin pricing has led to unpredictable cost swings that have compressed converter margins. Therefore, converters are experiencing significant challenges in establishing long-term contracts. Inventory management is also being disrupted, and converters are frequently adjusting prices they charge for their products to brand owners. In addition, the transition to sustainable materials as well as mono-material solutions is contributing to the challenges caused by volatility in resin price and resin qualification and supply chain security. As a result, converters must find effective ways to manage costs and strategically source resins to remain competitive in the flexible packaging industry.