Plastic Cups Industry

Topics: Marketing, Pricing, Drinkware Pages: 11 (4196 words) Published: May 9, 2010

December 8, 2009
Table of Contents
Industry/Product Category Overview 2
Market Size 2
Growth of Product Category 3
Recent Product Innovations 3
Market Sub-Segments 4
Differentiation 5
Value to Consumers 5
Fit in the Market 5
Pricing Strategies within Market 6
Industry/Product Category Overview
The Foodservice Packaging industry deals with plastic products such as plastic bowls, cups, plates and cutlery. The industry encompasses packaging for the home, commercial use and government institutions, such as schools and correctional facilities. Specifically, the product being developed belongs to the reusable cup category, in which the primary national competitor is Solo Cup Company. Although the Foodservice Packaging Industry was impacted by the economic situation, the challenges proved beneficial for the industry as they led to increase in product innovation. More notable, the "greening" of products, making them less harmful to the environment, has become a signal of the changing times. Additionally, the reason for the resiliency in some product categories in the industry, is the result of consumers downgrading their, spending on dining out and increasing their spending on home cooked meals. As consumers continue to downscale they will be looking for more disposable items to use in their homes. The foodservices packaging industry contains already established firms, such as Solo Cup Company, however, our product will service a niche in the market not effectively reached by other vendors. Market Size

Recycled, reusable plastic wear finds its place in the disposable sector of the industry under the segment, "Cups and Lids." This market accounts for several segments of plastic ware: Cups and Lids, Containers, Dinnerware and others. In addition, the market includes several “end-use” markets such as restaurants, retail stores, and various institutions. With respect to the “cup and lid” market the U.S. is predicting increases over the course of a four-year layout. It has been speculated that between now and 2012, demand for this respective segment will continue to grow by approximately 4.3 percent to a figure of $7.8 billion. Looking further ahead, we see predictions that this industry is expected to eventually reach $16.52 billion by year 2015. This growth has been associated with increasing away-from-home expenditure, and dual-income families with reduced time for making elaborate home cooked meals, finds immense applications in restaurants, institutions, and retail stores among others. Increase in the number of working women and changing trends in ethnicity have also led to greater indulgence in foodservice disposables. While these aren’t figures directed at the cup market in its entirety, research has noticed a close correlation between purchasing plastic dinnerware (i.e. plastic plates and eating utensils) and the significant increase in plastic drink ware. It’s been noted, however, that of the foodservice market, cups and lids are anticipated to produce the quickest growth in profit from now until 2015. This is expected to be fueled by the increasing demand in environmentally friendly cups, such as compostable cups or recycled content cups, will add value gains as these cups tend to be higher in price than conventional cups, thus generating a respectable profit. Growth of Product Category

The Solo cup company was founded in 1936. Solo was and still is one of the biggest companies in the plastic disposable cup industry. In 2006, the company posted sales of over 2.4 billion dollars. Since the founding of the consumer packaging industry, growth has been exponential. The industry is multi-billion dollar commerce and one that most consumers contribute to at one point or another....

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