Trends Report (CONT’D FROM PAGE 16)
The Perfect Combo Get Peak Performance From Your Equipment with Matched Component Sets
dipped 0.5 percent in 2022. “Consumer spending on processed food witnessed strong growth of 5.7 percent and 3.7 percent in 2020 and 2021 respectively. With people returning to restaurants and fewer people working from home in 2022, processed food spending dropped 4 percent in 2022. “Lockdown measures and consumer wariness to return to in-person dining caused spending on food service to contract 21 percent in 2020. “Food service spending grew 23.5 percent in 2021 and another 9.8 percent in 2022, finishing the year 7.2 percent above 2019 prepandemic levels. “The gains in folding carton demand reflected consum- er spending trends. The restocking seen during lockdowns fueled a lot of the growth in shipments. While e-commerce supported some growth in folding carton demand, this will change in the medium term. “Folding carton is best suited for shelves in brick-and- mortar stores. However, the shift to e-commerce for dry foods and non-food products could create a separate packaging and delivery channel, which could shift market share from recycled boxboard to corrugated packaging. “Additional headwinds include changing consumer be- havior and the increasing demand for non-carton intensive products, such as liquid soaps and detergents.” The report continues, “Economic uncertainty, lower lev- els of consumer spending on goods and an end to the inventory rebuilding cycle, which helped drive carton de- mand higher in 2021-22, will cause carton shipments to drop an estimated 3.8 percent in 2023. In the years that follow, however, macroeconomic indicators suggest that demand for folding cartons should continue its positive, albeit slow, growth. “Over the forecast period of 2022-27, we estimate that folding carton demand growth will average 0.4 percent annually, reaching 5.4 million tons by 2027. We anticipate output growth in nondurables, which comprises many car- ton-packaged goods including processed foods, will ex- pand 0.7 percent over the forecast. General economic fun- damentals in the US economy, such as the unemployment rate, will remain strong. “A potential recession is becoming more of a concern for the near future as inflation eats into consumer bud- gets. We currently forecast a short, two-quarter downturn in economic output in 2023, but growth will remain strong over the forecast, with consumer spending growing 1.7 percent in 2022-27. “In addition to the overall economic performance, there are other factors that play an essential role in folding car- ton growth dynamics, such as shifting consumer spending habits, substitution away from plastic packaging and ef- forts to reduce packaging waste. “In 2020, Canadian folding carton shipments increased significantly by 3 percent, but decreased 0.3 percent in
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CONTINUED ON PAGE 20
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December 4, 2023
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