Pira International forecasts growth in plastic packaging, especially flexible plastic packaging and bioplastics. Flexible plastic packaging is replacing materials like metal, glass, and rigid plastics in applications like meat and produce due to properties like low cost and weight. Bioplastics are increasing for food service items and film. Beer companies are interested in PET bottles but consumer acceptance remains uncertain. Overall plastic packaging growth is predicted to outpace other materials due to properties, new markets, and developing economies, though recycling and sustainability issues persist.

1. Pira Futures Forecast – plastic packaging Pira Packaging Summit, Nice, France, 3-4 October 2011 Adam Page, Business Manager, Reports and Consultancy, Pira International Pira International, Cleeve Road, Leatherhead, Surrey, KT22 7RU membership@pira-international.com +44 (0)1372 802000

2. Agenda Plastic’s share of the market Rise of Bioplastics Flexible packaging Rigid packaging Beer in PET Sustainability Outlook

3. Plastic’s Share of the Market 3 Source: Pira International Ltd

4. Plastic’s Share of the Market Source: Pira International Ltd 4

5. Rise of bioplastics xxxxxxxxxx: xxxxxxxxxxx The Rise of Bioplastics 5

6. The Rise of Bioplastics Retail and foodservice trays and containers are the largest single pack type for bioplastic packaging, followed by flexible film. Flexible packaging to take a growing share of the bioplastic packaging market over the next five to ten years. Demand will be driven by the commercialisation of bio-derived PE and PHA, and the wider availability and improved properties for biaxially oriented PLA (BOPLA) film. Other factors: Green consumers New production capacities Price and availability of crude oil Government initiatives Composting infrastructure 6

7. 7 Flexible Packaging Flexible packaging is replacing traditional pack types such as metal cans, glass and plastic bottles

8. Flexible packaging trends Source: Pira International Ltd 8

9. Brand owner perceptions Versatility Comparative low cost Potential for innovation/replacement Lighter weight pack format Need for barrier 9

10. End-use trends Highest growth: Meat, fish & poultry Chilled food Fresh fruit & vegetables 10

11. End-use trends Source: Pira International Ltd 11

12. Material trends High polymer prices - driver for customers demanding even thinner films Flexible plastics substituting paper and aluminium foil in some applications Highest forecast growth rates for higher-barrier plastics such as BOPET, EVOH and PA 12

13. Geographic trends Asia is the fastest-growing market for consumer flexible packaging, with a forecast CAGR for 2011-16 of 7.9%. 13

14. 14 Rigid Packaging Rigid packaging growth lies in new categories - food, personal care, etc. - and improving barrier properties

15. Rigid packaging trends Source: Pira International Ltd 15

16. Brand owner perceptions PET – huge success story PET has excellent performance properties such as good transparency and its resistance to breaking (unlike glass) Rigids have high level of penetration in key end-use sectors including soft drinks, fresh foods and non-food sectors, such as household care, personal care and healthcare products High penetration in the advanced industrial countries of Western Europe, North America and Japan 16

17. End-use trends Plastic bottles have achieved a high penetration for carbonated soft drinks and mineral water Technology developments are paving the way for rigid plastic packaging in other drinks, including juices, sports and energy drinks, RTD teas and alcoholic drinks 17

18. Huge potential for beer in PET – but will consumers will accept it? 18

19. Beer in PET Exciting opportunity for brewers and brand owners lighter in weight than competing pack types can be further light-weighted like glass and cans, PET bottles can also be recycled Drivers growing events market faster growth in off-trade beer sales developing barrier technologies emerging markets: opportunities to influence consumption behaviours, rather than battle with established consumer attitudes such as glass is best 19

20. Beer in PET Global PET beer bottle consumption by geographic region, (millions of bottles) Source: Pira International Ltd Main advantages of using PET bottles for beer 20

21. What’s holding back beer in PET? Note: a score of 1 = unimportant, 2 = not very important, 3 = fairly important, 4 = important, 5 = very important Source: Pira International Ltd 21

22. Material trends PET has overtaken PE as the leading polymer for rigid packaging Bioplastics and barrier polymers such as EVOH are gaining market share PET and PE dominate blow moulding Injection moulding is dominated by PP 22

23. Geographic trends Asia overtakes both North America and Western Europe - one-quarter of world market tonnage Emerging and developing countries of Asia, Central & Eastern Europe, South & Central America and the Middle East & Africa will be the main growth drivers 23

24. Lightweighting Average weight of a single serve 500ml PET still water bottle had declined by 26.7% to 13.83grs over the 2000 to 2008 period* * Source: International Bottled Water Association 24

25. Sustainable packaging 25

26. Recycling The overall recycling rate for plastics is generally considerably smaller than the rate for metals, glass and paper. shorter history of plastics recycling; established recycling infrastructure for metals, glass and paper; complexity in recycling plastics due to the necessity for separating plastics of different types 26

27. Outlook for Plastic Packaging Higher growth than overall packaging market Bioplastics – disruptive technology Barrier, lightweighting issues remain important New markets – beer in PET? 27

28. Thank you for listening. Adam Page Business Manager, Reports and Consultancy Pira International +44 (0) 1372 802 113 adam.page@pira-international.com

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