Plastic Bottles

Global Market Outlook on Plastic Bottles

• The global blow-molded plastic market was valued at $90-91 billion in 2023E, and it is forecasted to grow at a CAGR of 4–5 percent to reach around $102–103 billion by 2026. The market is currently going on a steady growth post the impact caused by the COVID pandemic

• The APAC market is forecasted to grow at a CAGR of 7–8 percent during the five-year period until 2026. The North American and Western European markets are matured and expected to grow at 2–3 percent, which is driven by personal care and beverage segments

• Innovation and technical advancements in blow-molded plastic bottle manufacturing process will facilitate a consequent increase in the production of such bottles

Porter’s Five Forces Analysis: Global

Supplier Power

• Fairly consolidated feedstock supply base renders a high negotiating power

• The resin makers are influential, in terms of volume and technology leadership, in making compatible resins

• However, the base resin price is regulated by the market and balances out the power

Barriers to New Entrants

• High capital investment, to achieve economies of scale, delays the break-even point for newcomers

• However, the fragmented nature of the industry could allow an easier access for new suppliers with investing capabilities to enter the market

Intensity of Rivalry

• The market is fragmented, with a very large number of suppliers operating, leading to an intense rivalry

• With the scope for innovation, suppliers are investing in product differentiations and customization to stay ahead of the competition

Threat of Substitutes

• Substitutes, like tetra packs and flexible pouches, pose a sense of replacement threat to plastic bottles, especially in home care and personal care space

Buyer Power

• Large chemical and beverage companies are in a better negotiating position, due to their strong presence and large buying capacity

• In addition, buyers are generally large global customers who have broader reach for bottle sourcing

• Since innovations are driven by suppliers, it balances the power in the industry

Cost Structure Analysis – Blow-Molded Bottles

• The raw material prices in North America, Europe, and LATAM regions are expected to increase slightly until the forecasted period, However, this price increase is a temporary surge. The price would get stabilized over the period

• In APAC, the HDPE and PET prices are expected to increase around 15 percent in the short term due to the increased demand from the various end-user industries during the recovery phase post pandemic

• Raw material contributes to around5 50-60 percent of the Blow-Molded bottles cost in the EU and APAC and it’s a major cost driver, followed by fixed and labor cost

• HDPE and PET has a solid supply in almost all the regions due to the surplus supply of the resins

• Fixed charges includes packaging, logistics, administrative, and other general expenses, and contribute to about 15–25 percent of the overall cost of the plastic bottles