Packaging Industry Outlook in Argentina: Market Size, Key Trends, Drivers and Challenges to 2016 - PDF by BRICdata

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                            Packaging Industry Outlook in
                            Argentina– Market Size, Key
                            Trends, Drivers and Challenges
                            to 2016
BRICdata
                            Industry Forecast Report
John Carpenter House
7 Carmelite Street          Reference code: PK0040MR
London EC4Y 0BS
United Kingdom              Published: January 2012
Tel: +44 (0) 20 7936 6400
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                            © BRICdata. This product is licensed and is not to be photocopied
TABLE OF CONTENTS


                               1 Executive Summary
                               Argentine packaging industry expected to record robust growth over the forecast period
                               The Argentine packaging industry totaled US$4.8 billion in 2011, after recording a CAGR of
                               5.85% during the review period. By 2012, the industry is expected to reach a value of US$5.1
                               billion, while it is projected to record a CAGR of 6.3% over the forecast period to reach an
                               anticipated value of US$6.5 billion in 2016. Within the industry, paper and board and glass were
                               the largest packaging categories during the review period, a dominance expected to continue
                               over the forecast period. Food and beverages is the key end-user market for the Argentine
 Increasing
                               packaging industry, accounting for over 70% of the consumption of packaging products in 2011.
consumer
expenditure on food            Soft drinks to drive rigid plastic packaging category
expected to drive              The Argentine soft drinks product segment is dominated by carbonated drinks, closely followed
packaging growth               by flavored waters, mineral waters, and sports and energy drinks. From 2002 to 2007, the
                               production volume of soft drinks increased dramatically, recording an output growth of 86%.
                               Similarly, products such as mineral water, flavored drinks, and sports and energy drinks
                               recorded significant growth during the review period, with domestic sales reaching 40 million
                               hectoliters in 2009. While 200 brands of carbonated drinks are available in the Argentine market,
                               carbonated drinks sales are dominated by Coca-Cola and PepsiCo, who together account for a
                               90% sales share. Over the forecast period, mineral water and flavored drinks sales are expected
                               to increase as a result of increasing disposable incomes and increasing health-consciousness
                               among the Argentine population. Overall, the high growth forecast for Argentine soft drinks sales
                               segment is expected to stimulate demand for rigid plastic packaging in Argentina, with sales of
                               PET bottles expected to increase particularly strongly.
                               Increasing consumer spending on food expected to drive Argentine packaging industry
                               growth
                               In 2011, Argentine consumer expenditure on food valued US$34.6 billion, after recording a
                               CAGR of 7.1% during the review period. In line with Argentine economic recovery, consumer
                               expenditure on food is expected to increase over the forecast period to reach a value of
                               US$38.5 billion in 2016. This growth in consumer expenditure on food is expected to increase
                               the sales of packaged and ready to eat food, driving the growth of the Argentine packaging
                               industry.
                               Organized retail sales expected to fuel packaging industry growth in Argentina
                               In 2009, organized retail stores such as hypermarkets, supermarkets and warehouse stores
                               accounted for over 30% of Argentina’s food and drinks sales in 2009. Within Argentine
                               organized retail, Coto and La Anonima are the only large retailers to be domestically owned,
                               with leading international retailers such as Wal-Mart, Carrefour, Casino and Jumbo having
                               dominant positions. Currently, large retail outlets such account for 70% of total imported food
                               and drink sales in Argentina, a figure expected to increase over the forecast period as
                               hypermarkets and supermarkets implement programs of organic and inorganic expansion. This
                               increased penetration of large retail outlets, coupled with higher sales volumes, is expected to
                               increase sales in the Argentine packaging industry over the forecast period.
                               High inflation changing Argentine consumption patterns
                               Since the global financial crisis, Argentina has been struggling with high inflation, the country’s
                               inflation rate increasing from 7.7% in 2009 to 11.0% in 2011 and expected to remain in double
                               digits over the forecast period. These high inflation rates have changed Argentine consumers’
                               consumption patterns, with an increasing number buying larger pack size products due to their
                               relatively lower prices. Companies operating in the Argentine retail industry have also responded
                               to this change in consumer demand, introducing larger pack sizes for a wide variety of products.




Packaging Industry Outlook in Argentina – Market Size, Key Trends, Drivers and Challenges to 2016                         Page 2

© BRICdata. This product is licensed and is not to be photocopied                                         Published: January 2012
TABLE OF CONTENTS



Table of Contents
1         Executive Summary ......................................................................................................................... 2
2         Future Growth Potential of Packaging in Argentina ....................................................................... 7
2.1       Argentine Packaging Industry Overview.............................................................................................. 7
2.2       Argentine Packaging Industry Future Outlook ..................................................................................... 8
2.3       Argentina Packaging Material Size ..................................................................................................... 9
2.4       Argentina Packaging Material Market Size by Category .................................................................... 11
2.4.1     Paper and board packaging .............................................................................................................. 11
2.4.2     Flexible plastic packaging ................................................................................................................. 13
2.4.3     Rigid plastic packaging ..................................................................................................................... 15
2.4.4     Metal packaging ............................................................................................................................... 17
2.4.5     Glass packaging ............................................................................................................................... 19
2.5       Argentina Packaging Machinery Market Size .................................................................................... 21
3         Argentina Packaging Industry Benchmarking .............................................................................. 23
3.1       Ranking Against Global Packaging Markets...................................................................................... 23
3.2       Global Packaging Market Growth Potential ....................................................................................... 24
3.3       Market Share in Paper and Board Packaging ................................................................................... 25
3.4       Market Share in Flexible Plastic Packaging....................................................................................... 26
3.5       Market Share in Rigid Plastic Packaging........................................................................................... 27
3.6       Market Share in Metal Packaging ..................................................................................................... 28
3.7       Market Share in Glass Packaging ..................................................................................................... 29
4         Market Environment, Growth Drivers and Challenges ................................................................. 30
4.1       Macroeconomic Factors ................................................................................................................... 30
4.1.1     GDP growth ..................................................................................................................................... 30
4.1.2     Annual disposable income ................................................................................................................ 31
4.1.3     Annual consumer expenditure on food.............................................................................................. 32
4.1.4     Inflation rate ..................................................................................................................................... 33
4.2       Regulatory Environment ................................................................................................................... 34
4.2.1     Regulation for imported food products .............................................................................................. 34
4.2.2     Argentina Food Code ....................................................................................................................... 34
4.3       Key End-User Market Drivers ........................................................................................................... 34
4.3.1     Soft drinks product segment to drive growth in rigid plastic packaging............................................... 36
4.4       Emerging Business Strategy Trends ................................................................................................. 37
4.4.1     Increasing consumer spending on food expected to drive growth in Argentine packaging industry .... 37
4.4.2     Increasing share of modern retail channels expected to stimulate innovation in packaging ................ 37
4.4.3     Large companies using technology in order to reduce costs and increase productivity ...................... 37
4.5       Key Challenges ................................................................................................................................ 38
4.5.1     National Packaging Law ................................................................................................................... 38
4.5.2     Increasing cost of packaging material is a key challenge................................................................... 38
4.5.3     Development of environmentally friendly packaging solutions ........................................................... 38
5         Argentina Packaging Trade Dynamics .......................................................................................... 39
5.1       Trade dynamics – Overview ............................................................................................................. 39
5.2       Packaging Imports and Exports Analysis .......................................................................................... 40


Packaging Industry Outlook in Argentina – Market Size, Key Trends, Drivers and Challenges to 2016                                                      Page 3

© BRICdata. This product is licensed and is not to be photocopied                                                                 Published: January 2012
TABLE OF CONTENTS


5.2.1     Paper and board packaging .............................................................................................................. 40
5.2.2     Plastic packaging ............................................................................................................................. 41
5.2.3     Aluminum packaging ........................................................................................................................ 42
5.2.4     Glass packaging ............................................................................................................................... 43
5.2.5     Packaging machinery ....................................................................................................................... 44
6         Industry Structure and Competitive Landscape ........................................................................... 46
6.1       Competitive Landscape: Overview.................................................................................................... 46
6.2       Industry Dynamics: Five Forces Analysis .......................................................................................... 46
6.3       Five Forces Analysis: Paper and Board ............................................................................................ 47
6.3.1     Bargaining power of supplier: medium .............................................................................................. 47
6.3.2     Bargaining power of buyer: medium.................................................................................................. 47
6.3.3     Barrier to entry: medium ................................................................................................................... 48
6.3.4     Intensity of rivalry: medium .......................................................................
								
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