Plastics Bottles

SIC 3085

Companies in this industry

Industry report:

Included in this category are establishments primarily engaged in manufacturing plastic bottles.

Industry Snapshot

In the mid-2000s U.S. manufacturing establishments shipped $9.34 billion worth of plastic bottles. Three main types of plastic resins were used in the manufacture of plastic bottles. Vinyl, polyethylene terephthalate (PET), and high density polyethylene (HDPE) together accounted for about 95 percent of all plastics bottles in the mid-2000s. In 2008, 75 million pounds of plastic bottles were recycled.

The industry is dependent on nine separate plastic bottle markets: soft drink, milk, medicinal, household chemical, toiletry and cosmetic, automobile and marine, juice and water, food (excluding milk), and industrial. All these markets have had moderate and steady growth. Plastic bottles steadily replaced aluminum and glass because plastic is both convenient and cost effective.

Background and Development

In 1990, plastic bottles comprised 22.7 percent of the container market by material shipments, metal cans comprised 59.1 percent, and glass containers comprised 18.2 percent. Metal remained the dominant packaging material for beverages, but plastic continued to gain market share at the expense of glass throughout the decade.

Bottle demand for PET in the United States was 1.3 billion pounds in 1992, about 70 percent of the total PET market. The largest market for PET was carbonated soft drink containers at 910 million pounds. Single-serving carbonated soft drink containers in 12-, 16-, and 20-ounce sizes comprised a 225 million pound market that was growing 25 percent annually.

PET resin producers supply the bulk ingredient to make plastic bottles, and their production in 1991 capacity rose to only 68,000 tons, while demand shot up to 206,000 tons. By 1992, demand had increased to 219,000 tons, while new capacity more than doubled, reaching 140,000 tons. Eastman Company expanded domestic resin production by 300 million pounds in 1993 and 1994 and 250 million pounds in 1995. In early 1992, PET resin stood at 65 to 67 cents per pound and fell at the end of 1992 to 62 to 64 cents per pound.

In 1992, PET resin demand from the soft drink industry topped 900 million pounds, and by 1997 it approached 1.4 billion pounds. With PET resin bringing higher prices and worldwide demand exceeding supply, lightweighting of plastic bottles became PET manufacturers' highest priority. Environmental and pricing pressures prompted PET producers to investigate methods for reducing the weight of the two-liter bottle below 55 grams. A one-gram reduction alone represented significant cost savings for the industry.

The recycled version of HDPE, the second type of plastic resin, had initially cost more than its virgin plastic, but many packagers began using recycled HDPE to satisfy environmental concerns. In 1994, there were indications that the gap between these plastics had significantly narrowed or, in some cases, disappeared. Important variables between these markets were the availability of high quality, well-sorted HDPE and the degree to which collection was subsidized by municipalities. As state lawmakers and major retailers insist on recycled content packaging, demand was expected to rise for this resin.

Vinyl, the third type of plastic resin, is used mostly for packaging household chemicals, liquid soap, shampoo, edible oils, and bottled water. In Europe, vinyl was the leading packaging material for bottled water, and 36 percent of U.S. and Canadian water bottlers reported that they used one or more sizes. For clear, one-gallon water bottles, vinyl was the leading material.

The market research firm SRI International of Menlo Park, California, projected U.S. consumption of recycled PET would increase 12 percent annually through the late 1990s, due mostly to the success of curbside collection efforts. During the 1990s, the number of U.S. recycling programs that accepted PET in their bins increased from 575 in 1990 to approximately 3,100. Approximately 3.7 billion PET bottles were recycled in 1992. The major soft drink manufacturers began using PET bottles that contained a percentage of recycled resin. About 19 percent of all plastic bottles were recycled in 1992, led by the 41.5 percent recycling rate of soft drink bottles. In 1991, 14 percent of all plastic bottles were recycled, led by the 36 percent recycling rate of soft drink bottles.

By the late 1990s, the majority of PET was used for soft drink bottles, but other drinks, such as juice, water, and beer, as well as non-food items, had increased consumption to 40 percent of the market. Production of PET bottles was taking off. Manufacture of PET beer bottles was not as successful as others. For one reason, the darker-colored bottle made it difficult for local recyclers to easily identify and separate it from other recyclables. Early bottles did not protect against the introduction of oxygen, which dramatically shortens beer's shelf life. In addition, increased cost made consumers less likely to purchase beer in plastic bottles. However, new bottles designed with numerous layers were making progress toward lengthening shelf life.

Also less successful than soft drinks was water in plastic bottles. Until late 1999, a harmless PET by-product called acetaldehyde could be detected in bottled water by its slight but fruity flavor. A researcher at Aston University developed additives that would act as barriers to the chemical's taste.

In the early 2000s, PET remained the leading material used for plastic bottle production. According to the June 2002 issue of Recycling Today, some 95 percent of all plastic bottles sold were either made of PET or high-density polyethylene (HDPE). In fact, the strong market for plastic bottles supported a 10 percent annual growth rate for the larger PET resin market in the early 2000s, according to some industry analysts.

By late 2002, PET bottles incorporating deep colors had become especially popular in almost every industry segment, including the beverage sector. This trend, which began with the increasing use of tints, signified a break from the past when PET containers were almost exclusively transparent.

By the early 2000s, U.S. production of plastic bottles was growing at a healthy pace, reaching a value of $9.34 billion by 2005, according to the U.S. Census Bureau. Recycling levels of plastic bottles were showing steady growth, hovering around 21 percent by 2003, according to 2005 figures from Plastics News. HDPE recycling had the highest overall rate, followed by PET.

Although bottled water did not have the largest segment within the beverage industry by volume, its worldwide sales were skyrocketing by 2003, boding well for manufacturers of plastic bottles. Volume in this category was growing at about 10 percent annually. At almost $1.7 billion, single-service plastic containers represented more than 61 percent of total bottled water sales. This was an increase of approximately 29 percent from 2001.

Manufacture of PET beer bottles, although still not as successful as other categories, had shown some improvement by the early 2000s. However, it remained a low-volume market. While beer accounted for more than 40 percent of all beverage containers used globally, less than 1 percent of beer was marketed in PET containers. Areas where beer was being marketed successfully in plastic bottles included concerts, sporting events, and forms of outdoor entertainment, where cost is not an issue as it is in retail stores. PET beer packaging was used in-store on a limited scale. However, consumer perception about compromised taste, along with the fact that glass and aluminum were less expensive types of packaging, remained major obstacles for significant market growth. By 2004, a new oxygen and carbon dioxide barrier resin for use in beer bottles was tested by companies in the industry. According to Packaging Magazine, manufacturers hoped that the new barrier resin would prove to be "the major breakthrough technology the brewing industry has been waiting for in the move toward plastic beer bottles."

Current Conditions

During 2008, consumers recycled 75 million pounds of plastic bottles, according to figures released by the American Chemistry Council (ACC) and the Association of Post-Consumer Plastic Recyclers (APR). Recycling efforts costing $2 billion invested over the past 20 years has proven to be successful, as more than 2.4 billion pounds had been recycled.

While most resins producers were struggling through the worldwide economic meltdown, PET producers were expected to at least continue to break even in 2009. "The single-serve beverage market has been hit pretty hard, especially in convenience stores, where 95 percent of what's in glass refrigerators is bottled in PET. Those products are high-priced and discretionary," Tom Sherlock, resins business director with DAK Americas Inc., told Plastics News in October 2009.

"From Coke brands in Copenhagen to Dasani water in the Western United States, we are starting to roll out the first generation of the bottle of the future," Muhtar Kent, chairman and CEO of Coca-Cola told Plastics & Rubber Weekly in November 2009. Coca-Cola launched its new PlantBottle, which was produced with 30 percent "plant-based materials," which is totally recyclable. The company expected to stock two billion of its PlantBottle on store shelves by the end of 2010.

Industry observers monitored industry performance as Coca-Cola and other plastics bottles producers continued "lightweighting" the amount of PET incorporated in production by as much as 30 to 50 percent, mainly due to higher resin prices that rose 15 percent in January 2009. Demand for domestic "virgin" PET was not expected to return to 2007 levels until 2015. Despite a few challenges, some industry watchers anticipated a growth rate of roughly 1 to 3 percent in both 2009 and 2010 for domestic PET sales.

Industry Leaders

In the mid-2000s the industry's leading firms included Plastipak Packaging Inc. of Plymouth, Michigan, with 2008 sales exceeding $1 billion; Constar International Inc. of Philadelphia (spun off from Crown Cork & Seal in 2002) emerged from Chapter 11 bankruptcy in 2009 with 2008 sales of $858 million; Graham Packaging Holdings Co., of York Pennsylvania, with 2008 sales of $2.58 billion; and Consolidated Container Company LLC of Atlanta, Georgia, with 2007 sales of $858.1 million. Roughly 13 percent of the company's revenues were derived from Clorox, Danone, Heinz, and PepsiCo Inc. Although its operations extended beyond bottle manufacturing to include aerospace and defense, another major player was the Ball Corporation of Broomfield, Colorado, which recorded sales of $7.56 billion in 2008.


In 2005, the plastic bottle industry employed 30,503 workers, down from 34,054 employees in 2002. Of this total, the majority (25,576) were production workers earning an average hourly wage of $16. Total combined payroll in 2006 was $885 million. Industry-wide employment fell to 18,814 workers as the economy worsened, affecting the overall manufacturing sector.

Research and Technology

Within the burgeoning bottled water market, "nutritionally enhanced" or "drinkable nutritional" waters had rapid growth in the early to mid-2000s. Also known as "nutraceuticals," these bottled drinks were enhanced with ingredients like vitamins, herbs, and antioxidants. Marketed to health-conscious consumers, the drinks were intended to address a variety of health concerns including heart health, vision, blood sugar, and weight loss. The plastic bottle industry benefited from the increased demand and was applying new technologies to meet this category's specialized needs. For example, new forms of PET were able to protect beverages from harmful ultraviolet rays that can damage the contents and properties (vitamins, color, and flavor) of enhanced beverages.

Another area of innovation in the early 2000s was the introduction of 12-ounce plastic containers that resembled cans. This development was a cross between a traditional plastic bottle and an aluminum can. As Food & Drug Packaging explained in December 2002, except for the standard aluminum end found on regular all-aluminum cans, this emerging form of plastic container was transparent, allowing consumers to see the contents of colorful beverages, which was especially popular the early 2000s. Thus, the plastic bottle industry continued to provide innovative solutions that benefited beverage marketers in numerous ways.

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