Cup & Lid Demand in the US to reach $7.8 Billion in 2012

Demand for cups and lids is projected to expand 4.3 percent per year to $7.8 billion in 2012.  Gains will be driven by continued, albeit decelerated, growth in consumer spending and a favorable outlook for foodservice revenues.  Cup and lid demand will also gain momentum as a result of competitive strategies involving a growing focus on coffee and continued introductions of other beverages in quick service restaurants, coffee and snack shops, and convenience stores, in part to offset sluggishness in fountain carbonated soft drinks.  Additionally, growing demand for environmentally friendly cups, such as compostable cups or recycled content cups, will aid value gains as these cups, while becoming more cost competitive, tend to be higher in price than conventional cups.  The foodservice market, which represented 71 percent of demand in 2007, will remain the dominant cup and lid market.  These and other trends are presented in Cups & Lids, a new study from The Freedonia Group, Inc., a Cleveland-based industry research firm.

Though drinking cups will remain the dominant cup type, faster gains for packaging cups will be attributable to continued expansion in key applications as well as further development of newer uses where cups meet consumer demand for convenient and portable single-serving package sizes.  The popularity of “100-calorie” and similar portion-sized snacks that allow controlled indulgence will also boost gains for packaging cups.  Preventing faster growth will be competition from less costly pouches, especially in snack food and sauce and condiment uses.  Among drinking cups, fastest growth is anticipated for plastic cups, which are making inroads into paper cup applications for cold drinks, both in foodservice and retail markets.  Good growth is also anticipated for foodservice paper hot cups, driven by rising sales of coffee and other hot drinks, especially in establishments that rely largely on disposable cups.

Growth in lid demand will outpace cup demand, advancing 5.0 percent per year to $1.1 billion in 2012.  Gains will be attributable to an increasing percentage of drinking cups using lids, growing demand for higher-value specialty lids and continued solid advances for single-serving packaging cups.  Faster growth is anticipated for flexible and rigid lids in packaging applications based on the popularity of single-serving sizes and the further development of new applications and line extensions.

The Freedonia Group is a leading international business research company, founded in 1985, that publishes more than 100 industry research studies annually. This industry analysis provides an unbiased outlook and a reliable assessment of an industry and includes product segmentation and demand forecasts, industry trends, demand history, threats and opportunities, competitive strategies, market share determinations and company profiles.