This study examines the US market for cups and lids. Product segments covered include drinking cups, packaging cups, portion cups, food cups, other cups, drinking cup lids, flexible lids and other lids. Markets for these products include foodservice establishments (e.g., eating and drinking places, retail stores, institutional establishments, lodging and hospitality sites, sports and recreation facilities, airlines and other establishments); packaging; retail and other (e.g., medical and dental). Packaging cups are defined as small plastic or paper containers (generally holding eight ounces or less) that can be easily held in the hand and typically contain a single serving of product. Food cups encompass disposable cups with shorter walls than drinking cups, and in sizes of 12 ounces or less for such applications as ice cream, soup and chili. Excluded are reusable drinking cups, packaging tubs containing more than one serving, and ice cream cone sleeves.

INTRODUCTION ix

I. EXECUTIVE SUMMARY 1

II. MARKET ENVIRONMENT 4
General 4
Demographic & Household Trends 5
Macroeconomic Outlook 9
Consumer Income & Spending 12
Retail Sales Trends 14
Food Consumption Trends 17
Packaging Overview 20
Raw Material Trends 23
Plastic 25
Paperboard 29
Metal, Foil & Other 30
Pricing Trends 31
Environmental & Regulatory Issues 34
Recycling 36
Degradable Materials 39
International Activity & Foreign Trade 41

III. PRODUCTS 45
General 45
Cups 47
Drinking Cups 50
Paper Cups 54
Plastic Cups 58
Foam Cups 61
Packaging Cups 65
Materials 68
Producers 69
Portion Cups 70
Food Cups 72
Other 74
Lids 76
Types 79
Drinking Cup Lids 79
Standard 82
Specialty 83
Flexible Lids 85
Other Lids 88
Materials 90
Plastic Lids 91
Other Lids 91

IV. MARKETS 93
General 93
Foodservice 96
Foodservice Industry Outlook 96
Cup & Lid Demand 100
Establishments 102
Quick Service Restaurants 102
Coffee & Snack Shops 104
Other Establishments 106
Applications 109
Hot Beverages 111
Soft Drinks 113
Other 115
Food Packaging 118
Food & Beverage Manufacturing Outlook 118
Cup & Lid Demand 120
Dairy Products 123
Yogurt 124
Coffee Creamers 127
Pudding 129
Other Dairy Products 130
Specialty Processed Food 133
Fruits & Vegetables 136
Dry Food 139
Other 141
Sauces & Dressings 143
Gelatin & Other Desserts 144
Candy & Snacks 144
All Other 145
Retail & Other 147

V. INDUSTRY STRUCTURE 151
General 151
Market Share 156
Solo Cup 158
Dart Container 159
Dixie 160
Berry Plastics 161
International Paper 162
Acquisitions & Divestitures 163
Competitive Strategies 168
Research & Development 170
Low Cost Manufacturing 173
Manufacturing 173
Marketing & Distribution 175
Cooperative Agreements 177
Company Profiles 179
A&E Products Catering Group, see Covalence Specialty Materials Corporation
Airlite Plastics Company 180
Alcan Incorporated 181
Alcoa Incorporated 183
Amscan Holdings Incorporated 184
Appleton Papers Incorporated 185
Bemis Company Incorporated 187
Berry Plastics Corporation 188
Biosphere Industries LLC, see Sealed Air Corporation
C&H Packaging Company, see Appleton Papers
Carthage Cup LP, see Pattison (Jim) Group
Cascades Incorporated 190
Choice Food Group 191
Clondalkin Group plc 192
Constantia Packaging AG 193
Converting Incorporated 194
Covalence Specialty Materials Corporation 195
Crocker (HS) Company Incorporated 196
Curwood Incorporated, see Bemis Company
Dart Container Corporation 197
Dopaco Incorporated, see Cascades Incorporated
DuPont (EI) de Nemours 200
EarthShell Corporation 201
Fabri-Kal Corporation 203
Genpak, see Pattison (Jim) Group
Georgia-Pacific Corporation, see Koch Industries
Heinz (HJ) Company LP 205
HUECK FOLIEN GmbH & Company KG 206
Huhtamaki Oyj 207
Insulair Incorporated, see Koch Industries
International Paper Company 209
Jet Plastica Industries Incorporated 210
Koch Industries Incorporated 211
Letica Corporation 213
Master Containers Incorporated 214
New England Extrusion Incorporated, see Appleton Papers Incorporated
Newspring Industrial Corporation, see Pactiv
Norse Dairy Systems, see Weston (George) Limited
Pactiv Corporation 215
Party City Corporation, see Amscan Holdings
Pattison (Jim) Group 217
PBM Plastics Incorporated, see Printpack
Plastipak Industries Incorporated 219
Polytainers Limited 220
Portion Pac Incorporated, see Heinz (HJ) Company
Prairie Packaging Incorporated 221
Printpack Incorporated 222
Radnor Holdings Corporation, see WinCup
Rampart Packaging, see Printpack Incorporated
Rexam plc 224
Sealed Air Corporation 225
Silgan Holdings Incorporated 226
Solo Cup Company 227
Spartech Corporation 233
Spiralkote Flexible Packaging, see Clondalkin Group
StyroChem International, see WinCup Incorporated
Sweetheart Cup Company Incorporated, see Solo Cup
Toray Industries Incorporated 235
Tyco International Limited 236
Waddington North America Incorporated 237
Weston (George) Limited 239
Wihuri Oy 240
WinCup Incorporated 243
Winpak Limited, see Wihuri Oy
Additional Companies in the Cup & Lid Industry 246

LIST OF TABLES
TABLE NUMBER PAGE
SECTION I -- EXECUTIVE SUMMARY
Summary Table 3

SECTION II -- MARKET ENVIRONMENT
1 Population & Households 8
2 Macroeconomic Indicators 12
3 Consumer Income & Spending 14
4 Retail Sales 17
5 Consumer Food Indicators 20
6 Packaging Shipments 23
7 Raw Material Demand in Cups & Lids 24
8 Cup & Lid Pricing 34

SECTION III -- PRODUCTS
1 Cup & Lid Demand by Type 47
2 Cup Demand by Type, Material & Market 49
3 Drinking Cup Demand by Type & Market 52
4 Paper Drinking Cup Demand 58
5 Plastic Drinking Cup Demand 61
6 Foam Drinking Cup Demand 65
7 Packaging Cup Demand 68
8 Portion Cup Demand 72
9 Food Cup Demand 74
10 Other Disposable Cup Demand 75
11 Lid Demand by Type & Market 78
12 Drinking Cup Lid Demand 82
13 Flexible Lid Demand 88
14 Other Lid Demand 89
15 Lid Demand by Material 90

SECTION IV -- MARKETS
1 Cup & Lid Markets 95
2 Foodservice Revenues & Establishments 99
3 Foodservice Markets for Cups & Lids 101
4 Quick Service Restaurant Market for Cups & Lids 104
5 Coffee & Snack Shop Market for Cups & Lids 106
6 Other Foodservice Market for Cups & Lids 109
7 Foodservice Applications for Cups & Lids 110
8 Hot Beverage Cup & Lid Market 113
9 Carbonated Soft Drink Cup & Lid Demand 115
10 Other Foodservice Cup & Lid Applications 117
11 Food & Beverage Shipments 120
12 Food Packaging Market for Cups & Lids 122
13 Dairy Product Cup & Lid Demand 124
14 Yogurt Cup & Lid Demand 127
15 Coffee Creamer Cup & Lid Demand 129
16 Pudding Cup & Lid Demand 130
17 Other Dairy Product Cup & Lid Demand 133
18 Specialty Processed Food Cup & Lid Demand 136
19 Fruit & Vegetable Cup & Lid Demand 139
20 Dry Food Cup & Lid Demand 141
21 Other Food & Beverage Markets for Cups & Lids 143
22 Retail & Other Markets for Cups & Lids 150

SECTION V -- INDUSTRY STRUCTURE
1 US Cup & Lid Sales by Company, 2005 153
2 Selected Acquisitions & Divestitures 166
3 Selected Cooperative Agreements 178

LIST OF CHARTS
CHART NUMBER PAGE
SECTION II -- MARKET ENVIRONMENT
1 Raw Material Demand in Cups & Lids, 2005 25
2 Plastic Demand in Cups & Lids, 2005 28

SECTION III -- PRODUCTS
1 Cup Demand by Type, 2005 50
2 Drinking Cup Demand by Material, 2005 53
3 Lid Demand by Type, 2005 79

SECTION IV -- MARKETS
1 Cup & Lid Markets, 2005 95
2 Foodservice Markets for Cups & Lids by Establishment Type, 2005 101
3 Foodservice Applications for Cups & Lids, 2005 111
4 Food Packaging Cups & Lids by Application, 2005 122

SECTION V -- INDUSTRY STRUCTURE
1 US Cup & Lid Market Share, 2005 158