Key Insights Highlight Shifting Consumer Behavior, Economic Recovery, and Growth Opportunities for the Folding Carton Market

Springfield, MA – Fastmarkets RISI recently released its 2024-25 Trends Industry Outlook & Market Data Report exclusively for the Paperboard Packaging Council (PPC), providing an in-depth analysis of the U.S. and Canadian folding carton markets. The report offers valuable insights into key trends shaping the industry, covering the impacts of the COVID-19 pandemic, inflation, and shifting consumer behaviors.

The report highlights how the folding carton market experienced unprecedented growth during the pandemic. As lockdowns pushed consumers to spend more on goods rather than services, demand for folding cartons surged, particularly for nondurable goods. This resulted in a significant 11.6% increase in shipments between 2019 and 2022. The peak occurred in 2022, with a 5.6% annual rise in shipments. However, as the world began returning to normal and consumers shifted their focus back to services like dining and travel, inventory destocking followed. This led to a cooling in carton shipments, which fell by 2.4% in 2023. Despite this, the report forecasts that the folding carton market will stabilize by the end of 2024, with shipments still expected to be 6.7% higher than pre-pandemic levels.

The outlook for the coming years remains cautiously optimistic. Over the next five years, folding carton demand is expected to grow at an average annual rate of 1.1%, reaching 5.5 million tons by 2028. This growth will be driven by several key factors, including a rebound in nondurable goods production, which is forecasted to expand by 1.6% annually. Additionally, shifting consumer spending patterns, with increased demand for sustainable packaging solutions, will fuel this growth. In particular, consumers are increasingly favoring paperboard packaging over plastic alternatives due to environmental concerns, a trend that is expected to continue over the forecast period.

The report also delves into the performance of specific end-use markets for folding cartons. It identifies nine markets poised for notable growth, including food products, beverages, cosmetics, pharmaceuticals, and household supplies. These growth markets are expected to see more than 1% annual growth. In contrast, other markets, such as certain processed food categories, may face challenges due to changing consumer preferences and cost pressures. Nevertheless, the report underscores that, overall, folding carton demand is likely to experience steady growth across most sectors.

In the Canadian market, the report shows that folding carton shipments experienced three consecutive years of gains from 2020-22, driven largely by increased consumer spending and higher industrial production. However, 2023 saw a slight decline in shipments by 1.3%, largely due to slowing consumer spending in key sectors. Despite this, the value of Canadian carton shipments increased to C$1.47 billion, indicating resilience in the face of challenging market conditions. However, a significant concern on the horizon is the planned closure of a major cartonboard mill in 2026, which will reduce Canada’s cartonboard capacity by nearly 30%. This will have a noticeable impact on folding carton production, with shipments expected to decline slightly, at 0.6% annually, over the next five years.

PPC Executive Director and VP Emily Leonczyk emphasized the importance of adapting to evolving consumer needs and economic conditions. “As the economy stabilizes and sustainability becomes a key focus, the folding carton industry has a significant opportunity to innovate and grow. This report provides valuable data to help our members navigate these trends and continue to lead the way in packaging solutions,” said Leonczyk.

The 2024-25 Trends Industry Outlook & Market Data is available as a free summary here, with the full report and overview exclusively available for PPC members. For more information, please visit the PPC website or contact [email protected].