Foam Trays Market - Cost Wars among Vendors and Concerns Regarding Non-biodegradable Nature of Foam to Restrain Market’s Growth

With the top three vendors, Pactiv LLC, Genpak LLC, and Sealed Air Corporation, collectively accounting for nearly 40% of the global market for foam trays in 2014, the market is largely fragmented and witnesses immense competition, states TMR in a recent report. Competition is especially severe in regional markets where a large number of unorganized players command a prominent position in local marketplaces with the help of inexpensive product varieties.

Mergers and acquisitions with the aim of extending product lines and expanding production capabilities, especially in lucrative regional markets with untapped growth opportunities, is one of the most preferred growth strategies adopted by vendors in the market. Focus on the development of biodegradable and sustainable product varieties is also a prominent strategy adopted by companies in the global foam trays market. For instance, Anchor Packaging Inc. introduced a new “Wave” series of containers under its “MicroRaves” trademark in May 2015. The product range is consumer re-usable and eligible for recycling.

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Cost Effectiveness and Rising Demand across Packaging Industry to Boost Demand for Foam Trays Globally

Foam trays are used across several applications majorly owing to their cost effectiveness, impermeability to moisture, superior cushioning, and convenience of use. In case of food service solutions, especially, foam trays are known to be reduce the entire cost of the service substantially as compared to when using paper trays.

Owing to these factors, a variety of foam trays are being used in increased volumes for serving food across fast food joints, schools and colleges, and for packaging take-home food. Foam trays are also being increasingly employed for packaging food products such as cereals, vegetables, and fruits. The rising demand across food service and food packaging sectors will enable the global foam trays market gain traction in the next few years. The demand for foam trays will also be driven indirectly due to the rising prices of earth-friendly materials and recyclable paper and plastic trays.
Cost Wars among Vendors and Concerns Regarding Non-biodegradable Nature of Foam to Restrain

Owing to the presence of a large number of unorganized players in regional markets and several international companies operating in the global foam trays market, the bargaining power of suppliers has substantially weakened. Companies are being required to reduce prices to stay ahead in the competition, resulting in loss of margin. This has compelled many chief vendors in the market in divesting their foam tray production divisions. Loss of production capacity could have a notable negative impact on the overall development of the global foam trays market in the next few years.

Another factor that threatens to limit the growth prospects of the global foam trays market is the rising consumer awareness regarding the non-biodegradability of foam and its harsh implications on the health of the environment. Many regional and national governments are also planning to instigate bans on the use of foam containers across food service establishments. This will negatively impact the growth of the foam trays market to a vast extent.

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Applications across Food Industry and Polystyrene Products Pivotal to Growth

Transparency Market Research states that the global foam trays market will exhibit a 3.2% CAGR over the period between 2009 and 2021 and rise to a valuation of US$3 bn by 2021 in terms of revenues. Volume-wise, the market is expected to register a 4.4% CAGR over the said period and rise to 52.8 bn units by 2021. In terms of materials, product type, the segment of polystyrene led the global market, contributing revenues worth US$1,589.4 mn to the global market in 2014. Applications in the food industry contributed to the largest share in revenues of the overall market in the same year.

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