Plastic Caps and Closures are the final components of the packaging process used in various industries such as food and beverages, pharmaceuticals, household goods, cosmetic products, etc. for maintaining the quality of the products, freshness and increasing the shelf life.
The global plastic caps and closures market valued USD 39.19 billion in 2019 and is expected to grow at a CAGR of 5.19% to reach USD 53.75 billion by 2027.
The plastic caps and closures market has witnessed a dual impact on the product demand in recent months owing to the lockdowns imposed in the majority of the countries due to the outbreak of COVID-19. The uncertainty surrounding the situation resulted in consumers engaging in impulse buying and stockpiling groceries, essential products, hand wash liquids, and hand sanitizers. The high demand for hand wash liquids and hand sanitizers has contributed to the positive influence on the plastic caps and closures market. On the other hand, the prices of raw materials like polypropylene railed over, driven by robust PP features and strong demand for fiber grade PP for mask production amid the rapid spread of COVID-19 globally.
Market Dynamics
Drivers
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The surging demand for packaged food and beverages
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Potential benefits of plastic caps over metal counterparts
Restraints
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Unstable prices of raw material
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Environmental concerns associated with plastic utilization
Market Segmentation
The global High-Density Polyethylene (HDPE) Plastic Caps and Closures market valued USD 15.78 billion in 2019 and is estimated to reach USD 24.66 billion by 2027, growing at a CAGR of 7.35% during 2020-2027.
The growth rate experienced by the HDPE segment is attributed to rising awareness about environmental hazards associated with disposed plastics and recyclability of HDPE, which contributes to its increasing popularity.
HDPE closures are majorly used to sealing bottles. These closures are extensively used in the industries such as food, cosmetic, medical, pharmaceuticals and beverage industries. HDPE is recognized for its minimal impact on the environment as it takes less energy to manufacture HDPE than other types of plastics. HDPE is lightweight and is often more cost effective to transport than other plastic types.
Geographical Analysis
The Plastic Caps and Closures market in North America valued USD 10.45 billion in 2019 and is estimated to reach USD 13.03 billion in 2027, by growing at a CAGR of 3.64% during 2020-2027.
The food and beverage industry is one of the significant contributors to the caps and closures market in this region, especially in United States. According to the Drug Enforcement Administration 2019 report, the United States' largest drug company produced more than 76 billion opioid pills. It has also been observed that about 300 million pain prescriptions were written in 2015. Owing to the high consumption of pain relievers, there is a massive rise in the demand for more bottles, leading to the growth of the plastic caps and closures market.
This metric emphasizes the production requirements for the United States, which is expected to drive the growth of the plastic caps and closures market in the North American region. Moreover, online food delivery in the United States is experiencing an upsurge, owing to the growth in the older demographic population. Population in the age group of 35 – 45 also opt for delivery service for food and bottled medicine, which leads to high growth in the usage of plastics caps and closure for adequate packaging of the food.
In February 2020, Silgan Holdings Inc. acquired Cobra Plastics Inc., which manufactures and sells injection-molded plastic closures for a wide variety of consumer products, with a particular focus on the aerosol overcap market. The acquired business, with sales of approximately USD 30 million, currently operates from two manufacturing facilities. However, with the outbreak of COVID-19, the US plastic production is likely to decline in 2020, before recovering in 2021. The production of plastic resins is expected to decrease by 9.8% in 2020, before rising by the same amount in 2021, and the production of plastic products is anticipated to fall by 10.2% in 2020, before rising by 8.3% in 2021, according to the chief economist of PLASTICS. This factor is expected to hamper the plastic caps and closures market. However, sales of consumer essentials at grocery stores and food and beverage stores jumped over 25% in March 2020 in the United States, and this is expected to offset the negative effect on the market.
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