Market Trends of Canada Plastic Caps And Closures Industry
Polyethylene To Witness Growth Owing to its Durability
- Polyethylene (PE) is one of the most durable types of plastics available. It is resistant to chemicals and has a low cost. PE is derived from petroleum polymers and can withstand any environmental hazard. It is broadly classified into high-density polyethylene (HDPE) and low-density polyethylene (LDPE).
- HDPE caps and closures are used mainly in water, dairy, and juice bottles. Polyethylene has long been the preferred material for water bottle closures owing to its superior organoleptic properties (taste and smell). With its adaptability and durability, HDPE plastic, a thermoplastic polymer manufactured from petroleum, is one of the best plastic bottles for cosmetics.
- According to the Canada-based global firm Nova Chemicals, Polyethylene has been the top choice for water bottle closures for a considerable time due to its exceptional taste and odor properties. The company offers a range of polyethylene resins with the necessary performance properties for hot fill and carbonated soft drink (CSD) beverage closures.
- According to the USDA Foreign Agricultural Service, in the sales growth of beverages and soft drinks in Canada from 2018 to 2023, ready to-drink coffee took the top position with 113%, followed by ready-to-drink tea with 53%. Further, Energy drinks sales growth stood at 34%, taking third place. With the increasing consumer preference for bottled water and non-alcoholic beverages, the beverage industry is poised for growth, consequently driving up the demand for plastic caps and closures.
- Moreover, in November 2023, Dow Chemicals announced that its management had declared a Final Investment Decision on the Company's Fort Saskatchewan Path2Zero project investment to build one of the world's first net-zero Scope 1 and 2 emissions-integrated ethylene cracker and derivatives facility in Alberta, Canada. The USD 6.5 billion project includes building a new ethylene cracker and increasing polyethylene capacity by 2 million MTA. Such expansions would push the market for polyethylene packaging products in the country.
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Beverage Segment to Witness Robust Growth
- Health awareness, a higher standard of living, and increased consumption of bottled water are key drivers behind the rising demand for bottled water packaging in the country. This surge in demand is directly fueling the need for plastic caps and closures.
- Consumers' growing preference for healthy, natural products is a primary factor propelling the demand for water bottles and containers. Given its prevalent use in water packaging, plastic is further bolstering the caps and closures market in the region. A study by Danamark reveals that, on average, Canadians consume 335 liters of water daily, equivalent to about 670 standard 500 ml water bottles.
- Soft drinks, also known as soda or carbonated beverages, are part of the non-alcoholic beverage industry. They contain water, sugar, artificial sweeteners, and a flavoring agent. Due to their popularity, the demand for beverage caps and closures will increase. According to StatCan, the revenue of soft drink and ice manufacturing in Canada in 2020 was USD 3,356.31 million, and it is expected to reach USD 3,581.29 million in 2023.
- Further, according to Statistics Canada, total spirit sales rose 3.0% to USD 6.9 billion in 2022/2023. Whisky (29.4%), vodka (23.0%), and liqueurs (15.2%) were the most popular spirits sold. The increased sale of spirits would further drive the market for caps and closures in the region.
- A diverse consumer base, spanning athletes, fitness buffs, and on-the-go professionals, favors energy drinks, juices, and powdered beverages. These beverages, housed in innovatively designed HDPE and PET bottles, prioritize aesthetics and boast extended shelf lives, aligning with the growing emphasis on sustainability. Whether it's a pre-workout boost, a midday pick-me-up, or a fatigue-fighter during outdoor pursuits, energy drinks deliver a swift energy surge, enhancing performance for their consumers.
