Industry growth and sales in 2014 has led the foodservice packaging industry to forecast even greater optimism for 2015 than last year, according to an annual survey conducted by the Foodservice Packaging Institute (FPI, fpi.org).

Now in its 16th year, the annual State of the Industry Survey included input from foodservice packaging converters, raw material and machinery suppliers, foodservice distributors and operators. More than 60 FPI members and invited guests, including members of FPI’s sister association, Pack2Go Europe, shared their business growth successes and challenges from 2014. FPI then collected the changes to sales volume and profits, expansion and purchasing plans, opportunities and challenges.

“FPI’s annual State of the Industry Survey provides an inside look at the industry — how we’re doing and where we’re going,” said Lynn M. Dyer, president of FPI. “It’s encouraging to see so much optimism in this year’s report even though the industry continues to face economic and environmental challenges.”

Nearly 85 percent of foodservice packaging manufacturers and suppliers experienced growth in volume, and more than 60 percent reported profit growth in 2014. That’s up from 60 percent and 50 percent, respectively, in last year’s survey. This year, nearly three quarters of the industry expect both volume expansion and profit growth. Foodservice operators that responded were also overwhelmingly optimistic and all predicted sales to increase by year-end.

In another positive sign for the industry, nearly 60 percent of the North American and European manufacturers reported corporate expansion plans through construction of new facilities, expansion of current facilities, mergers and acquisitions. Three-quarters of North American and European converters also plan to purchase new machinery in 2015.

With regard to growth potential over the next five years, respondents overwhelmingly envision market expansion in the fast casual sector, due to the segment drawing customers from traditional quick service restaurants. Other areas for potential growth include convenience stores and supermarkets / grocery stores.

North American and European converter and supplier respondents highlighted five common challenges facing the industry (ordered from most to least important):

  • Increasing raw material costs.
  • Margin compression.
  • Environmental activism.
  • Public perception of packaging or foodservice packaging as “waste.”
  • Recovery / end of life options for foodservice packaging.