U.S. Caps and Closures Markets

Frost & Sullivan, March 2005

Increased Manufacturing Costs Make Pricing a Key Differentiator for Suppliers in the U.S. Caps and Closures Market

Price competition in some of the commodity type packaging markets such as continuous thread and tamper evident has intensified over the past few years. Increasingly, suppliers have to compete on price in order to build a long-term strategic partnership with their customers. Closure products such as metal crowns have minimal product differentiation and this gives the customer better bargaining powers while determining the supply price. Nonetheless, this has not resulted in a significant dip in prices, since rising raw material and energy prices are adding to the manufacturing costs. Most suppliers have contracts with their customers and the increased raw material costs are being passed on to them. However, energy costs will have to be borne by suppliers, and this eventually impacts their profit margins.

This Frost & Sullivan research service covers the U.S. caps and closures market. The study examines the segmentation by material types and discusses market trends. It also incorporates the top challenges facing the industry and provides strategic recommendations to address each of them.

Changing Consumer Trends Call for Value-added Packaging Products

Higher level of consumer spending and changing consumer tastes have translated into an increase in line extensions and new product introductions. Amidst this, the need for product differentiation has made packaging a critical component of branding, merchandising, and promotional activities. Packaging companies are constantly trying to improve package design by investing in research and development. Among the many trends is the rising popularity of over caps and the shift from metal, glass, and paperboard containers to plastics. The changing consumer demands for dispensing of products will increase the need for more complex and high-end closures in the future, notes the analyst of this research.

Increasingly, buyers are locally sourcing materials in order to minimize the lead-time for bringing out products to the market. Further, they are consolidating their vendor base to ensure supply of products with consistent quality. This involves reducing prices to cater to the few larger customers that expect suppliers to support them on a global basis. Such a supply chain constriction is all about strategic sourcing by bundling larger percentages of global requirements.

However, while acquiring capabilities to supply on a global scale, small and medium-sized vendors will be challenged to consistently meet customer requirements with their limited resources and this makes them strong targets for takeover by bigger participants.

Collaborating with Customers in New Product Development Can Help Counter Pricing Pressure

Operational excellence coupled with constant product development to meet customer needs is likely to help the cap and closure suppliers to counter the bargaining power of the buyers. For instance, suppliers can collaborate with customers to develop new products and focus on custom development of products for specific needs of the client. Changing consumer needs is one of the most important factors that would impact the caps and closures market in the United States, says the analyst. The market is in the growth phase and proactive steps to understand the varying needs of consumers will help companies gain competitive advantage in the future.

1. Executive Summary
   1. Market Overview
      1. Introduction
      2. Competitive Analysis
      3. Market and Technology Trends
   2. Research Findings
      1. Opportunities and Forecasts
      2. Market Segment Analysis
      3. Conclusion
      4. Glossary of Terms

2. Industry Dynamics
   1. Industry Challenges
      1. Introduction
      2. Major Challenges Facing the Caps and Closures Market
   2. Market Dynamics
      1. Mergers and Acquisitions
      2. Joint Ventures and Agreements

3. Total U.S. Caps and Closures Market
   1. Overview and Definitions
      1. Introduction
      2. Market Engineering Measurement Analysis
      3. Market Drivers
      4. Market Restraints
   2. Forecasts and Trends
      1. Unit Shipment and Revenue Forecasts
      2. Market Trends
      3. Pricing Trends
   3. Competitive Analysis
      1. Competitive Structure
      2. Market Share Analysis
   4. Recommendations and Evaluations
      1. Introduction and Overview
      2. Strategic Recommendations to Counter the Pricing Pressure
      3. Strategies to Cope with Changing Consumer Needs
      4. Strategies to Counter Industry Consolidation
      5. Strategies for Maintaining Optimal Lead Time
      6. Strategies to Tackle Consolidation Among Customer Base
      7. Strategies for Easing Local Sourcing of Materials by Customers
   5. Frost & Sullivan Awards
      1. Growth Strategy Leadership Award
      2. Business Development Strategy Leadership Award
      3. Product Line Strategy Leadership Award
      4. Product Differentiation Innovation Award
      5. Customer Service Leadership Award

4. Metal Caps and Closures Market
   1. Overall Market
      1. Market Overview
      2. Market Engineering Measurement Analysis
   2. Market Engineering Unit Shipment and Revenue Forecast
      1. Market Drivers
      2. Market Restraints
      3. Unit Shipment and Revenue Forecasts
   3. Trend Analysis
      1. Market and Technology Trends
      2. Pricing Trends
   4. Competitive Analysis
      1. Competitive Structure
      2. Market Share Analysis
   5. Metal Crowns Market
      1. Market Overview
      2. Market Engineering Measurement Analysis
      3. Market Drivers
      4. Market Restraints
      5. Unit Shipment and Revenue Forecasts
      6. Other Market and Technology Trends
      7. Pricing Trends
      8. Competitive Structure
      9. Strategic Analysis and Forecasts End User Type
   6. Metal Closures Market
      1. Market Overview
      2. Market Engineering Measurement Analysis
      3. Market Drivers
      4. Market Restraints
      5. Unit Shipment and Revenue Forecasts
      6. Other Market and Technology Trends
      7. Pricing Trends
      8. Competitive Structure
      9. Strategic Analysis and Forecasts by End User Types

5. Plastic Caps and Closures Market
   1. Overall Market
      1. Market Overview
      2. Market Engineering Measurement Analysis
   2. Market Engineering Unit Shipment and Revenue Forecasts
      1. Market Drivers
      2. Market Restraints
      3. Unit Shipment and Revenue Forecasts
   3. Trend Analysis
      1. Market and Technology Trends
      2. Pricing Trend
   4. Competitive Analysis
      1. Competitive Structure
      2. Market Share Analysis
   5. Continuous Thread Closures Market
      1. Market Overview
      2. Market Engineering Measurement Analysis
      3. Market Drivers
      4. Market Restraints
      5. Unit Shipment and Revenue Forecasts
      6. Other Market and Technology Trends
      7. Pricing Trend
      8. Competitive Structure
      9. Strategic Analysis and Forecasts by End User Types
   6. Tamper Evident Closures Market
      1. Market Overview
      2. Market Engineering Measurement Analysis
      3. Market Drivers
      4. Market Restraints
      5. Unit Shipment and Revenue Forecast
      6. Other Market and Technology Trends
      7. Pricing Trend
      8. Competitive Structure
      9. Market Share Analysis
      10. Strategic Analysis and Forecast by End User Types
   7. Child Resistant Closures Market
      1. Market Overview
      2. Market Engineering Measurement Analysis
      3. Market Drivers
      4. Market Restraints
      5. Unit Shipment and Revenue Forecasts
      6. Other Market and Technology Trends
      7. Pricing Trend
      8. Competitive Structure
      9. Market Share Analysis
      10. Strategic Analysis and Forecasts by End User Types
   8. Dispensing Closures Market
      1. Market Overview
      2. Market Engineering Measurement Analysis
      3. Market Drivers
      4. Market Restraints
      5. Unit Shipment and Revenue Forecasts
      6. Other Market and Technology Trends
      7. Pricing Trend
      8. Competitive Structure
      9. Market Share Analysis
      10. Strategic Analysis and Forecasts by End User Types

6. Other Caps and Closures Market
   1. Overall Market
      1. Market Overview
      2. Market Engineering Measurement Analysis
   2. Market Engineering Unit Shipment and Revenue Forecast
      1. Market Drivers
      2. Market Restraints
      3. Unit Shipment and Revenue Forecasts
   3. Trend Analysis
      1. Market and Technology Trends
      2. Pricing Trends
   4. Competitive Analysis
      1. Competitive Structure
      2. Market Share Analysis
   5. Strategic Analysis and Forecast by Other Types of Closures
      1. Natural Cork Application
      2. Synthetic Cork Application
      3. Rubber Closures Application

7. Appendix
   1. Decision Support Database Tables
      1. Real GDP of U.S. Between 2001-2011
      2. Consumer Confidence Index U.S. 2001-2011
      3. Average Fuel Costs for the Electric Power Industry
      4. Personal Disposable Income
      5. Population by Age Group

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