Growth in lid demand will outpace cup demand, the result of an increasing [image-nocss] percentage of drinking cups using lids, growing demand for higher-value specialty lids and continued solid advances for single-serving packaging cups. The increased level of cups with lids will be driven by the rising volume of beverages purchased for offsite consumption as well as the trend in a growing number of restaurants to put lids on all disposable cups for safety reasons.
Lid demand will also outpace cup demand because of an expanding market for takeout beverages and food. A favorable outlook for foodservice revenues will also boost demand for portionsized cups for packaging items such as creamers, butter and sauces, which will in turn support heightened lid demand.
Packaging cups will register above average gains, fueled by consumer demand for convenient and portable single-serving meal and snack options, which will lead to an expanded range of applications. Drinking cup and lid prospects will benefit from heightened demand for larger cups and specialty lids. Growing demand for environmentally friendly cups, such as compostable cups or recycled content cups, will aid value gains as these cups tend to be higher in price than conventional cups.
Trends toward healthier eating, growing interest in calorie-controlled servings and increased targeting by product manufacturers of specific demographic groups, such as women and children, will also stimulate opportunities for packaging cups. At the same time, competition from alternative packaging media, such as pouches, in products such as yogurt, condiments and dry snack foods, will limit advances to some degree.
The foodservice market, which accounted for nearly 70% of demand in 2005, will remain the dominant cup and lid market. A number of trends will fuel growth, including a shift to larger cups, the importance of custom printing on cups and the expanded availability of premium coffee in QSRs and c-stores. Continued favorable revenue expansion in the coffee and snack shop segment will also stimulate strong opportunities for cups and lids, as many of these establishments use higher-value paper hot cups and specialty lids. Moderating gains to some extent will be intensified competition resulting from heavy marketing of premium coffee beverages by other foodservice outlets. Cup prospects in the retail market will be aided by continued demand for at-home casual entertaining, where disposable cups are valued for their convenience in terms of cleanup as well as sanitary advantages.
Cross-merchandising with related seasonal goods will also support demand. Medical and dental markets will remain a niche area of the cup and lid market, with moderate advances tied to population gains and aging demographics.
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