REPORT HIGHLIGHTS

• The barrier plastic packaging industry in the United States is a large business. Its size is, in large part, determined by how one defines "barrier" and therefore what resin products and packaging structures are included in the scope of the analysis. We define a barrier resin as one that has low permeation to the most important gases that can penetrate and damage a packaged product. These gases primarily are oxygen and water vapor. We also include the important thermoplastic polyester, PET, because of its extensive use both as a barrier bottle resin for carbonated and other beverages and as a secondary barrier and structural substrate for many other barrier films. PET also is receiving more attention and gaining increased importance for packaging of beer in new higher barrier PET structures.
• The total U.S. market amounted to almost four billion pounds in our base year of 1999, and will grow at an overall 9.4% AAGR for all barrier resins to more than six billion pounds over the next five years to the forecast year 2004. The value of this market, in constant 1995 dollars at bulk resin prices at the manufacturer level, increases from almost $2.8 billion to $4.3 billion.
• Ethylene-vinyl alcohol (EVOH) copolymers: EVOH is the highest oxygen barrier resin now produced. BCC estimates that about 64 million pounds was used in the U.S. in base year 1999, and BCC forecasts growth at an AAGR of 11% to 108 million pounds in 2004. Most EVOH is used in the U.S. for food packaging (53 million pounds in 1999), with smaller and growing barrier markets for automotive fuel tanks and healthcare packaging.

REPORT SCOPE

INTRODUCTION

This report is an update of a BCC report on this subject by the same author, published in May 1996. In this update, we have reevaluated the entire subject, introduced several new barrier packaging concepts and products that have appeared in the intervening period, and have updated and polished our market analyses and forecasts for five additional years into the future.

Despite the fact that much of the basic technology of barrier plastics is the same, we found that a significant and really quite amazing amount of progress has been made in the few years since the last BCC report on this subject. One subject alone, that of plastic packaging for beer, is so big that it has been prominently displayed and discussed in many forms of print media, from scientific journals to trade magazines and The Wall Street Journal. Others, such as more sophisticated multilayer barrier packaging structures and controlled/modified atmosphere packaging for fresh produce and other fresh foods, have been described as the most important packaging developments in years.

STUDY GOALS AND OBJECTIVES

Packaging, and plastics used in packaging, are seen virtually everywhere in modern developed society. Most of the goods that the public buys in developed societies are packaged, as are an increasing number in developing ones as well. Packaging has been around for centuries, and probably was developed for a number of reasons. These include preservation and stability of products over time and the protection of products from damage, dirt, moisture, etc. Early packaging was quite crude, e.g., casks and cases of salted meat carried on old sailing ships.

Barrier packaging, if we define the term to mean packaging of all types, has been available for some time. It protects products from infiltration (or, in some cases, exfiltration, i.e., the passing out of the container) of contaminants, of flavor, color, odor, etc., as well as preserving the contents. Glass and metal containers have been used for packaged goods for many years and certainly qualify as barrier packages. As we discuss later, thick glass and metal qualify as "functional" barriers that stop just about everything.

Plastics also are everywhere around us. For example, they are used in packaging and consumer items ranging from cassette cases (and the audio and videotapes themselves) to television sets and furniture and major parts of automobiles. Packaging is the single largest end user of plastic resins in the United States. For many years, packaging has consumed more than one-quarter of all the resins used in any year in the United States.

In this study we look at a very important segment of the packaging industry, that of plastic barrier packaging and the plastic resins which supply these barriers. That is, polymers that are used in packaging to provide a barrier to some unwanted intrusion in or out of the package. Barrier resins block passage of several important substances, including oxygen, moisture, odors, flavors and others.

Different experts and observers use different terms to describe the use and function of plastics in barrier packaging, and most of these terms are somewhat arbitrary. They also can be confusing. First and foremost, this study is devoted entirely to synthetic barrier plastics, i.e., those primarily derived from petrochemical feedstocks. We briefly describe cellophane, the one natural barrier film still in some use, but do not include it in our market analyses and forecasts since for years, it has been considered an obsolete product with a declining market.

Among synthetic resins, many analysts attempt to differentiate between the barrier resins and structural resins used in packaging. By defining some limits of gas permeability that constitute barrier properties, resins are placed in one or the other category. BCC does not rigidly classify barrier packaging resins in this way, for not only is barrier an arbitrary term, but different resins can perform both barrier and structural functions in some plastic packaging structures. All resins discussed and analyzed in this report are considered to be barrier resins, even if their use may predominantly be structural in most packaging structures.

We do consider polyolefins (polyethylenes and polypropylene), polystyrene, and other such strong support resins to primarily be structural; we call them secondary barrier resins. This is to differentiate them from the primary barrier resins such as ethylene-vinyl alcohol copolymer (EVOH) and polyvinylidene chloride (PVdC). The latter are included in barrier structures strictly for their gas barrier properties.

As good example of combination structure and barrier is the common polyethylene terephthalate (PET) soda (carbonated soft drink or water) bottle. In this application, the primary structural resin, PET, has sufficient barrier against the primary pass-through material (in this case the exfiltration of carbon dioxide "fizz" from the contained soda) to be a used in a simple monolayer plastic structure. However, it is really a relatively poor barrier resin, such that major soft drink bottlers recently have begun placing "use by" dates on carbonated soft drink (CSD) bottles.

To package a more demanding product such as beer, which can rapidly degrade from oxygen infiltration, a better barrier structure is needed and the plastic packaging industry now is working on this challenge; this is one of the most interesting developments of the past few years.

In many other cases, a multilayer (ML) structure (MLS), either laminated or coextruded, is needed to provide both strength and barrier. Some of these ML structures, even for seemingly simple products like snack foods, are wonders to behold and may have seven or more different plastic layers, each layer providing a different structural barrier or adhesive function.

The growth of plastic barrier packaging, in the sophisticated sense used in this report, has been significant since the discovery and development of the first synthetic specialty barrier resin, polyvinylidene chloride (PVdC, Dow Chemical's Saran® brand) in the 1950s and 1960s. The commercialization of ethylene vinyl alcohol (EVOH) came a bit later, in the 1970s.

However, the development of coextrusion technology enabled the efficient manufacture of ML plastic structures in a wide range of thicknesses, in a single pass through a machine. This really caused barrier packaging growth to take off in the late 1970s and early 1980s. Before then, ML structures were made by laminating two plastic layers together, a slower and intrinsically less efficient process. Lamination still is an important MLS method, especially for resin combinations that are difficult to coextrude.

Adding to the interest in this subject, the barrier packaging industry changes constantly. An ideal polymeric barrier does not exist, and probably never will, since each application has different requirements. In some cases, for example, in the packaging of meat, PVC, a film that is not a good oxygen barrier, is commonly used in supermarket meat displays since it keeps meat color red and inviting for the short time it is on display. However, for long-term transport or storage of meat, a good oxygen barrier is needed to prevent spoilage.

Current barrier packaging plastics are good, but problems remain that restrict their use or hinder their growth in many applications. These include:

• high cost, almost always higher than the cost of a simple monolayer plastic package of, for example, LDPE or LLDPE.

• susceptibility to contamination or degradation, especially by moisture. EVOH is the best example of this problem, since its hydroxyl groups give it good barrier qualities but also make it susceptible to hydrolysis. As a result, EVOH only can be used as an inner layer in a MLS.

• disposal or recycling problems. Most MLS, since they contain more than one type of plastic, cannot easily be commingled and recycled with, for example, HDPE or PET. Many ML containers must be classified and labeled with the SPI recycling number “7” or “other.”

challenges from competing materials, some as old as glass, others new such as silicon oxide glass coatings that can provide a superior barrier.

Our goal is to describe the most common and popular barrier polymers and their applications, their technology, competing barrier materials and future trends. We estimate and forecast markets for barrier polymers of several kinds and in several different important markets such as food and healthcare packaging. The polymers and applications that we cover are described and briefly discussed below in the Scope section.

REASONS FOR DOING THE STUDY

As noted above, packaging constitutes the single, largest end use of plastics in the U.S. Barrier packaging is taking on increased importance each year, as both producers and customers seek longer shelf life and better product integrity, flavor, potency, etc.

BCC performed this study to provide a comprehensive reference for those interested and/or involved in these products. This includes a wide and varied group of chemical and other companies that make and use barrier polymers, process technology and equipment designers and marketers, politicians of all stripes, and the general public. We have sorted through, condensed and analyzed information from a large amount of literature and other reference materials to compile this report.

Many experts in the barrier packaging plastics field believe that developments over the past five years or so were made to develop more sophisticated multilayer barrier packaging structures to solve the most difficult barrier packaging problems economically. These developments are the primary focus of this study.. During the early 1990s, four basic barrier materials were developed: PVdC, nylon, EVOH and metallized films. But consumer demand for foods with longer shelf life and high-quality and excellent flavor and freshness retention has led to these more sophisticated MLS that often are thinner than their less-efficient predecessors. This is because there is a better choice of barriers and structural layers in the ML structure.

CONTRIBUTION OF THE STUDY AND FOR WHOM

This report is intended to assist those involved in several different aspects of U.S. industrial and commercial sectors, primarily individuals with a primary interest in packaging. These organizations and people include those involved in development, formulation, manufacture, sale and use of barrier polymer and polymer processes, and ancillary es such as processing equipment, additives and other support chemicals and equipment. These include process and product development experts, process and product designers, purchasing agents, construction and operating personnel, marketing staff and top management. BCC feels that this report will be of great value to technical and personnel in the following areas, among others:

• marketing and management personnel in companies that produce, market and sell barrier polymers
• companies involved in the design and construction of process plants that manufacture barrier polymers and those who service these plants
• financial institutions supplying money for such facilities, including banks, merchant bankers, venture capitalists, and others
• personnel in end-user packaging companies and industries, e.g., food, healthcare and consumer and household products
• personnel in government at many levels, primarily federal, (FDA), but also state and local health, environmental, and other regulators who must implement and enforce laws covering public health and safety, food quality, etc.

SCOPE AND FORMAT

This BCC study provides in-depth coverage of many of the most important technological, economic, political and environmental considerations in the U.S. barrier packaging polymer industry. It primarily is a study of U.S. markets. But because of the global nature of polymer and packaging chemistry it touches on some noteworthy international activities, primarily those having an impact on the U.S. market, i.e., imports/exports and foreign firms operating in this country.

We analyze and forecast markets for barrier packaging plastic resins in both volume in pounds and in value, based on prices for purchase of bulk quantities of basic resins. Our base year is 1999, and we forecast market growth for a five-year period to 2004. All market figures are rounded to the nearest million pounds or dollars and all growth rates are compounded (signified as average annual growth rates or AAGRs). Because of this rounding, some growth rates may not agree exactly with figures in the market tables. All market figures are at the manufacturer or producer level and all market value forecasts are given in constant 1999 dollars.

This report in segmented into ten sections, of which this introduction is the first.

The summary encapsulates our findings and conclusions, and includes tables summarizing major markets. It is the place where busy executives can find key elements of the study in summary format coupled with summary market analysis tables.

An industry overview follows, starting with an introduction to the petrochemical industry, the source of all these barrier packaging polymers. Then we discuss the plastic resin industries and focus on barrier packaging. We conclude with a discussion of barrier packaging materials and structures, with emphasis on plastic barrier resins. The intent is to introduce readers to the field of polymers, barrier packaging and barrier packaging resins.

The next section is the first of two devoted to market analysis. Here, we discuss and forecast markets for barrier packaging plastics by major resin type or class. These include some major commodity packaging resins, such as polyolefins, that find use as structural packaging resins, as well as resins developed specifically for barrier applications. We start this section with an overall market analysis and forecast for the major types of barrier packaging resins, for base year of 1999 and forecast year of 2004. Then, in each subsection, we describe individual resin types in more detail, discuss their important applications in barrier packaging, and forecast their markets in more detail. The types of barrier resins that we cover and forecast include EVOH, PCTFE fluoropolymer, nitrile (AN-MA) copolymers, nylons, thermoplastic polyesters, PVdC, tie-layer resins and vapor-permeable films.

In this section we also discuss but do not forecast in all cases, since many of these products still are experimental or their markets too diffuse. We also look at some other important materials and technologies used in plastic barrier packaging including structural resins and other barrier materials like nonpolymeric barriers and scavenging systems.

The next section discusses and forecasts markets by barrier resin application. We have placed applications into three specific major groups: food (by far the largest segment), chemical and industrial products and healthcare products packaging.

The next section is devoted to technology, starting with some basic plastic resin chemistry, manufacture, and properties of plastics used in barrier packaging. Next, we go to polymerization technologies, including new technologies such as metallocene catalysts that can have an effect on future barrier packaging resins and applications. We then cover other important aspects of polymer technology including fabrication of rigid and flexible structures, polymer orientation, barrier technology, some competing barrier materials, food processing and packaging and additional new developments in barrier packaging. One of the most important is work on new ways to increase the barrier properties of PET. This is discussed in detail.

The next section covers the barrier packaging resin industry structure, with emphasis on major domestic producers and suppliers, horizontal and vertical integration, market and product entry and differentiation factors and other topics. Compounders, converters and molders are important links in the plastics production chain. We briefly discuss and analyze some international aspects of the barrier resin , including its global nature, major foreign-owned supplier companies which operate in the United States, and imports and exports.

Our last narrative section consists of profiles of many supplier companies that BCC considers to be among the most important and/or best representatives of this .

The appendix is a glossary of some important terms, abbreviations, acronyms, etc. used in the chemical, polymer and packaging industries.

We note again that some topics and materials covered in the text of this report are not included in our market forecast tables. We include these topics and materials for completeness. However, they either are really outside the market scope of this study (such as natural film, cellophane and some oxygen scavengers), too new to have yet developed a measurable commercial market (such as some nonpolymeric barrier coatings and films), or whose markets are too large and diffuse to forecast the barrier segment with any certainty (such as the use of polyolefins in barrier packaging as structural and secondary barriers). We include these materials and concepts to give the reader as complete coverage as possible of not only new developments in barrier packaging plastics but also other materials than can extend shelf life and/or otherwise affect markets for barrier resins.

For consistency in style and format, registered trade names are indicated by capitalizing the initial letter of the name and appending the copyright registration or trademark registration symbols ® and/or ™; generic names are not so marked. Because many chemical names are long and complicated, we often use abbreviations, acronyms, or chemical formulae. Many of these, such as HDPE, PVC, PVdC, PCTFE, etc. represent common polymers.

All chemical elements and compounds can be designated by chemical symbols and formulae. After introducing the element or compound, we often use symbols such as HCl for hydrochloric acid. Our glossary at the end of this report contains definitions and explanations of many of the most important abbreviations and acronyms.

OXYGEN AND WATER VAPOR BARRIER RESINS

Our scope is restricted to those synthetic barrier resins that are used to prevent infiltration or exfiltration of gases. These primarily are oxygen and water vapor (moisture), but also carbon dioxide in carbonated beverage packaging. Some in the trade consider oxygen permeability to be the only really important barrier parameter. This is based on the importance of an oxygen barrier to retard food spoilage. BCC considers water vapor transmission to be another important barrier parameter. This is because of its importance in some critical applications such as packaged pharmaceuticals and dry food products. For example, bread-type products must be protected from moisture, lest they turn moldy. And, as noted, a CO₂ barrier is important for preserving carbonation.

Other barriers are noted and discussed in several places, e.g., barriers to other gases, including hydrocarbon vapors (because of the importance of barrier in automotive gasoline tanks); and to light, odor, flavor, etc. However, because these latter applications are so spotty and difficult to quantify (and also because these effects often are masked by, or included in other barrier effects), we do not attempt to separately quantify their markets. The only exception is barrier gasoline tanks. Plastic packaging barrier structures examined and discussed include both rigid and flexible, monolayer and multilayer.

We also include and forecast two types of so-called vapor-permeable or selective barrier films that allow relatively high transfer of gases through them. These are so-called "breathable" films such as PVC for meat packaging and DuPont's Tyvek® brand of spun-bonded polyolefin, and controlled or modified-atmosphere packaging (CAP/MAP) permeable films for food packaging.

Since the scope of this study is determined by our definition of what constitutes a barrier resin, we define some terms here in the introduction. Based on its oxygen or moisture permeability or gas transmission rate, BCC considers a barrier resin to be one that has the following permeability characteristics:

1.    Oxygen: a resin with permeability to oxygen (measured as oxygen transmission rate or OTR) of less than 2 ml/mil thickness/100 sq. in. 24 hour day at one atmosphere pressure. Most OTRs are measured at 73ºF and RH specified for the particular conditions. Many older resins can achieve an OTR of 5, but most modern barrier resins have values of 1.0 or lower. For example, standard metallized PET films have an OTR of about 0.3 or lower. We consider any material with an OTR below 0.1 to be a high-barrier material; these include PVdC and EVOH. Others are called moderate barriers.

2.    Water (moisture) vapor: a resin with a water vapor transmission rate (WVTR) less than 0.10. We define and classify moisture barrier polymer structures as do experts in the pharmaceutical blister packaging industry. That is, very low barrier films have a WVTR greater than 0.10, low-barrier WVTRs are 0.06 to 0.1, intermediate barrier 0.03 to 0.06, and high-barrier films have WVTR values of 0.03 or lower. WVTRs of 1.0 have been available for years with many resin films. The best and current moisture-barrier film, PTCFE, has WVTR values lower than 0.03 for most structures and it is the only true high-moisture-barrier film resin. WVTR is usually determined under conditions of 100ºF and 90% RH (quite stringent conditions but not all that unusual in many parts of the U.S.).

One major caveat should be stated here. Gas permeability and other barrier properties can shift as a result of a number of variables. These include ambient conditions (particularly temperature and humidity), exact grade of barrier plastic, particular packaging structure (including other materials, tie layers, adhesives, etc.), processing conditions and operations performed by the processor or end user such as retort or hot-fill packaging. Thus, gas permeability figures really are a range of values, which can vary by an order of magnitude or more for the same resin.

METHODOLOGY AND INFORMATION SOURCES

Extensive searches were made of the literature and the Internet, including many of the leading trade publications as well as technical compendia and government publications. Much product and market information was obtained whenever possible from principals involved in the industry. Information for our corporate profiles was obtained primarily from the companies, especially larger, publicly owned firms. Other sources included directories, articles and Internet sites.

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