Caps and Closures Market Intelligence

Industry Outlook & Drivers

Global Market Outlook on Caps and Closures

• Plastic caps and metal closures hold a market share of about 73–75 percent 24–25 percent, respectively. The rest is shared between rubber and cork
• The Beverage industry is the largest end-use segment and accounts for about 50–55 percent of the overall market
• Bottled water is the fastest growing end-use market (CAGR 7–8 percent), especially in the Americas and APAC, as more consumers switch from CSDs to more healthy beverages
• Adoption of user-friendly features, such as dispensing and child resistance, is driving the value growth in the market, at a CAGR of about 5–6 percent, until 2022

• Development of flexible packaging options, such as pouches, is restraining the market

Key Trends and Innovations

• Anti-counterfeiting Closures: The penetration of anti-counterfeiting closures is high in alcoholic beverages, especially in premium segment. Currently, such closures are penetrating other F&B segments. Innovations include holograms, QR codes, RFID chips, etc. As the market grows in other segments, cheaper and highly scalable mechanisms will be adopted by the industry

• Functional and User-friendly Closures: As a result of growing consumer pressure, especially from mature markets, brands are switching to more user-friendly designs. Features, such as child resistance, are becoming regulatory requirements. These factors are expected to foster multitude of innovations that offer many user-friendly functionalities, such as dosage measuring, dual-spout closures, etc

• Dispensing and Smart Closures: Many pharma firms have incorporated dispensing closures or smart features into their packaging. Techniques, such as NFC, Bluetooth, etc., are being used by firms to communicate dosage and promotional information to consumers. As such closures command a much higher price than conventional ones, the cost of packaging is expected to increase in the pharma industry

Value Chain Analysis: Plastic Caps

• PP and HDPE are the preferred resins for manufacturing plastic closures. Injection molding process is the most favored technology for manufacturing caps and closures
• Compression molding is a new technology, but it has started replacing injection molding in the manufacturing closures, owing to faster process in mass production and the ability to manufacture light-weight closures

Global Market Size: Caps and Closures

• The caps and closures market is expected to grow at the rate of 4–4.5 percent by volume during 2018–2023, with plastic caps and closures driving the demand
• In the next five years, beverages, especially bottled water, will drive the volume growth, whereas user-friendly and functional closures in personal and home care and pharma are likely to drive the value growth
• Plastic caps contribute to 75 per cent of the entire caps and closures market and drive the market with a CAGR of 4.5–5 per cent during 2018–2023
• The increasing demand across beverages, especially in the emerging markets, is the main growth driver
• The bottled water segment is expected to drive volume growth in the near future, with a CAGR of 7–8 per cent, during 2018–2023
• The market share of metal closures is expected to decrease from 24 per cent to 22 per cent by 2020, as plastic closures replace metal in multiple segments across beverages, cosmetics, and pharma
• Corks expected a decline of around 3 per cent CAGR 
• Rubber stoppers are expected to witness a significant growth of 7–8 per cent, with growing parenteral route administration in the pharma market
• The value growth is expected to be driven by increasing demand for user-friendly closures, especially in the personal and home care segment

Regional Market Overview

• The APAC is the largest market for caps and closures and is likely to experience strong growth in the next five years, with growing beverages in the domestic market
• The E.U. and North America are expected to grow at a CAGR of about 2.53 per cent and 2–2.5 per cent, respectively, driven by bottled water and beverage segments
• APAC, with a market share of about 36 per cent, is the fastest-growing market, with an estimated CAGR of about 5–6 per cent over the next four years

–The growth is driven by a rapidly growing market for beverages, especially bottled water, beer, and other juices

–The market share is likely to surpass 40 per cent by 2020

• Africa and the Middle East are expected to witness a similar growth as that of Asia, due to the growing disposable income and penetration of beverages

–In Africa, demand for metal caps and closures is expected to grow at about 4.5–5 per cent CAGR during 2018–2023, compared to the global growth of 2–2.5 per cent CAGR

• China accounts for over 15 per cent of the global plastic caps and closure market –China would continue to grow at about 7–7.5 per cent CAGR in the segment, owing to increasing domestic and export demand

–Exports from China have been growing at about 6–6.5 per cent CAGR over the last three years

• Volume growth in North America and the E.U. is considerably slow, owing to the slowing down of key end-use markets, like CSD and beer

–The bottled water market is growing at 7–8 per cent CAGR, sustaining growth in the next five years