The U.S. demand for cups and lids is forecast to increase 4.1% per year to $8.9 billion in 2016, with growth driven by above average gains for food packaging cups and a favorable outlook for foodservice revenues. The growing importance of specialty beverages among foodservice operators will be a key factor, with many quick service restaurants placing greater emphasis on premium coffee, specialty coffee drinks, iced coffee, smoothies and the like. These and other trends are presented in Cups & Lids, a new study fromThe Freedonia Group, Inc.(www.freedoniagroup.com), a Cleveland-based industry market research firm.   

Although drinking cups will continue to dominate, the fastest gains are anticipated in the packaging cup segment due to solid outlooks for demand in key packaging cup-using markets such as yogurt, coffee and tea, and fresh fruits and vegetables. Additionally, advances will be driven by expanding applications where cups satisfy consumer demand for portable, convenient, single-serving packaging, or can help reinvigorate sales of mature products. Above average growth for food cups will stem from trends such as the increased presence of oatmeal in quick service restaurants and coffee and snack shops, and the exponential growth of self-service frozen yogurt shops.

Lid demand growth will outpace that of cups, rising 4.9% per year to $1.2 billion in 2016. Advances will be fueled by an increasing percentage of drinking cups utilizing lids, heightened demand for costlier specialty lids, and healthy increases for single-serving packaging cups. Lids for packaging applications will post faster gains than drinking cup lids, supported by the popularity of single-serving cup packaging and the ongoing development of new applications and product line extensions.  

Foodservice, which accounted for 68% of demand in 2011, is by far the largest market for cups and lids.  Growth will trail the cup and lid average as a result of sluggish sales of fountain beverages, growing competition from bottled beverages, and the overall maturity of most applications. Nonetheless, gains will be supported by above average prospects for hot beverages along with the increased emphasis in quick service and other restaurants on premium beverages. Faster growth will be seen in the food and beverage packaging market, reflecting a combination of convenience and portability, along with healthy eating trends, which will provide further upward momentum for yogurt, the largest single packaging cup application.