Packaging Industry in Canada

Euromonitor International's Packaging Industry in Canada report offers a comprehensive guide to the size and shape of the market at a national level. It provides historic market size data by industry, allowing you to identify the most popular pack types. It identifies the leading companies, and offers strategic analysis of key factors influencing the market- be they new product developments, recycling or legislation issues. Forecasts illustrate how the market is set to change.

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• Get insight into trends in market performance
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Executive summary

More stringent packaging regulations

At the instance of the Canadian Food Inspection Agency (CFIA), the Canadian government has decided to change the rules about food products that can claim to be made in Canada. Where the old rules required only 51% Canadian content, the new rule requires all Canadian ingredients, except when an essential ingredient is unavailable in Canada. While food companies claim that the new rule will have no significant impact on them because it is voluntary to label food as made in Canada, this represents a growing trend that affects not only food but all packaged products as consumers are becoming more and more concerned about the products they use for themselves and their pets, following recent happenings like pet food recalls, the discovery of harmful bacteria in food and perceived high amounts of Bisphenol A (BPA) in baby food. The implication of this is that consumers will be paying more attention to the labelling on packaged food and non-food products.

Foreign exchange and energy key factors affecting performance

Across the packaging industry a number of medium to large players were affected by the stronger Canadian dollar, which made Canadian products less competitive compared to US products. Since the US is the number one export market for players in the industry which deal outside of Canada, the stronger Canadian dollar had a dampening effect on margins. There were varying degrees of mitigation of the effect of the stronger loonie among packaging manufacturers. Rising oil prices implied higher cost of raw materials, further putting a downward pressure on margins. Although it is common practice in the industry to pass on higher costs to customers, not all manufacturers were successful in doing so. Customers are also feeling the effect of a stronger loonie and higher transportation costs arising from higher oil prices, and so many continue to seek lower-cost producers. Rising oil prices also meant energy and freight costs increased, which affected glass and metal manufacturers more since they are more energy intensive and tend to incur higher freight costs.

Increasing consolidation

The packaging industry is in an era where being a lower-cost producer is a definite competitive advantage, and some manufacturers are reaping the benefits. Increasing consolidation seems inevitable given the pressing need of packaging manufacturers to benefit from lower costs resulting from economies of scale. In addition to strategies like moving up to premium products, consolidation may be a way to reduce the effect of all-round rising costs. For some players in the industry, acquisitions help them to be closer to their customers, thereby reducing transportation costs, a strategy that has worked well for some manufacturers. While plastic packaging is still relatively fragmented, there have been recent acquisitions and the trend is likely to be sustained into the near future. The trend towards becoming one-stop shops for customers will also drive more acquisitions as medium to large players opt to acquire competencies rather than build from scratch.

Sustainability growing in importance

The issue of sustainability and social responsibility is gradually moving from the domain of a few companies to a centre stage issue. A growing number of medium to large packaging companies either have sustainability initiatives or sustainability as core to their business and a source of competitive advantage. Manufacturers are also looking going beyond taking a snapshot view of sustainability to engaging in life cycle analysis (LCA) of their products, considering their processes and impact on society and the environment. The Packaging Association of Canada seems to be taking environmental impact more seriously than ever before. Most of the recipients of the 2008 awards received the awards because their products, processes or facilities had a positive environmental impact. From the consumer perspective, recycling rates in Canada are steadily increasing across the country and more Canadians now have access to recycling programmes and use them. This implies that issues concerning environmental impact are getting into the public consciousness and manufacturers have no choice but to follow the trend.

Table of contents

EXECUTIVE SUMMARY

MORE STRINGENT PACKAGING REGULATIONS

FOREIGN EXCHANGE AND ENERGY KEY FACTORS AFFECTING PERFORMANCE

INCREASING CONSOLIDATION

SUSTAINABILITY GROWING IN IMPORTANCE

MARKET BACKGROUND

PACKAGING LEGISLATION

FOOD AND DRUGS AND THE CONSUMER PACKAGING AND LABELLING ACTS AND REGULATIONS

RECYCLING AND THE ENVIRONMENT

Recycling rates increase across Canada

Influx of recycling initiatives

General trend towards reduced packaging

A difficult recycling market

Table 1 Overview of Packaging Recycling and Recovery 2007

Table 2 Packaging Material Generation and Recovery Rates – Ontario 2006

Table 3 Residential Recycling Rate by Province 2004

CORPORATE ACTIVITY IN PACKAGING

INCREASING CONSOLIDATION

RISING RAW MATERIALS COSTS

INCREASING FOCUS ON CORE COMPETENCIES

FOCUS ALSO ON SUSTAINABILITY

PREMIUM PRODUCTS SEEN AS A WAY UP

MAJOR MARKET PLAYERS

ALCAN PACKAGING CANADA LTD

Expansion and sustainability

Summary 1 Alcan Packaging Canada Ltd: Packaging Operational Indicators 2007

Summary 2 Major End-Use Markets for Alcan Packaging Canada Ltd by Pack Type 2008

CASCADES INC

Betting on a green future

Summary 3 Cascades Inc: Packaging Operational Indicators 2007

Summary 4 Major End-Use Markets for Cascades Inc by Pack Type 2007

CCL INDUSTRIES INC

Focusing on speciality packaging

Summary 5 CCL Industries Inc: Packaging Operational Indicators 2007

Summary 6 Major End-Use Markets for CCL Industries Inc by Pack Type 2008

CELPLAST LTD

Summary 7 Major End-Use Markets for Celplast Ltd by Pack Type 2008

CONSOLIDATED BOTTLE CO

Summary 8 Major End-Use Markets for Consolidated Bottle Co by Pack Type 2007

CROWN CORK & SEAL CANADA INC

Maintaining focus on metal and prices

Summary 9 Crown Cork & Seal Canada Inc: Operational Indicators 2007

Summary 10 Major End-Use Markets for Crown Cork & Seal Canada Inc by Pack Type 2007

FPC FLEXIBLE PACKAGING CORP

Summary 11 FPC Flexible Packaging Corp: Operational Indicators 2007

Summary 12 Major End-Use Markets for FPC Flexible Packaging Corp by Pack Type 2007

GRAHAM PACKAGING CANADA LTD

Chasing opportunity in longer shelf lives

Summary 13 Graham Packaging Canada Ltd: Operational Indicators 2007

Summary 14 Major End-Use Markets for Graham Packaging Canada Ltd by Pack Type 2008

HOOD PACKAGING CORP

Summary 15 Hood Packaging Corp: Operational Indicators 2007

Summary 16 Major End-Use Markets for Hood Packaging Corp by Pack Type 2008

IPL INC

High-value products only

Summary 17 IPL Inc: Operational Indicators 2007

Summary 18 Major End-Use Markets for IPL Inc by Pack Type 2008

O-I CANADA CORPORATION

Paring down workforce

Summary 19 O-I Canada Corporation: Operational Indicators 2007

Summary 20 Major End-Use Markets for O-I Canada Corporation by Pack Type 2008

PRETIUM PACKAGING LLC

Summary 21 Pretium Packaging LLC: Operational Indicators 2007

Summary 22 Major End-Use Markets for Pretium Packaging LLC by Pack Type 2007

REYNOLDS FOOD PACKAGING CANADA INC

Fighting in a competitive market

Summary 23 Reynolds Food Packaging Canada Inc: Operational Indicators 2007

Summary 24 Major End-Use Markets for Reynolds Food Packaging Canada Inc by Pack Type 2008

RICHARDS PACKAGING INC

Battling higher prices

Diversified clients

Summary 25 Richards Packaging Inc: Operational Indicators 2007

Summary 26 Major End-Use Markets for Richards Packaging Inc by Pack Type 2008

SILGAN PLASTICS CANADA INC

Company structure

Customer service drives company forward

Summary 27 Silgan Plastics Canada Inc: Operational Indicators 2007

Summary 28 Major End-Use Markets for Silgan Plastics Canada Inc by Pack Type 2007

TETRA PAK CANADA

Sights set on low costs and environment

Summary 29 Tetra Pak Canada: Operational Indicators 2007

Summary 30 Major End-Use Markets for Tetra Pak Canada by Pack Type 2006

WINPAK LTD

Hit by price increases

Capacity expansion expected

Summary 31 Winpak Ltd: Operational Indicators 2007

Summary 32 Major End-Use Markets for Winpak Ltd by Pack Type 2005

MAJOR MARKET PLAYERS BY PACK TYPE

RIGID PLASTIC

Canadian manufacturers experiencing reduced margins

More than packaging

Summary 33 Major Rigid Plastic Packaging Manufacturers by Pack Type 2007

METAL

Metal packaging hit by rising energy and material costs

Innovation and premium products key to growth

Summary 34 Major Metal Packaging Manufacturers by Pack Type 2007

FLEXIBLE PACKAGING

Industry players seeking differentiation

Summary 35 Major Flexible Packaging Manufacturers 2007

GLASS

Glass packaging remains resilient

Summary 36 Ranking of Major Glass Packaging Manufacturers 2005

LIQUID CARTONS

Successfully promoting versatility of liquid cartons

Summary 37 Major Liquid Carton Manufacturers 2007

PAPER-BASED CONTAINERS

Sustainability becoming a centre stage issue

Summary 38 Major Paperboard Packaging Manufacturers by Pack Type 2007

CLOSURES

More consolidation, acquisition and integration to come

Specialisation has it benefits

Summary 39 Major Closure Manufacturers 2007

APPENDIX

Summary 40 Households That had Access to and Used Recycling Programmes, by Province, 2006