GENERAL TRENDS
Packaging Industry Outlook & Observations
The global packaging market reached a value of $402.4 billion in 2021 and is expected to grow at a CAGR of 3.5% to reach $493.5 billion by 2027, according to Research and Markets
Growth in the packaging industry suffered overall due to pandemic-related issues such as regional lockdowns, global supply chain bottlenecks and fluctuations in end-user demand, but has recently gained traction as barriers relax
Online retail and food-grade packaging products will be the primary drivers of growth in the sector as consumer shopping preferences continue to trend towards e-commerce and delivery-on-demand services
While deal activity in 2021 surged to exceed pre-COVID levels, it is uncertain if momentum is expected to continue due to rising inflation, persisting supply shortages and geopolitical unrest
Industry Insight: More Innovation Towards Less Packaging
It is clear that consumers and government regulators have been shifting their preferences towards sustainable packaging materials in recent years, even with cost premiums. However, the growing ubiquity of e-commerce and delivery-on-demand services is creating a flood of packaging waste. Product designers are being challenged to innovate beyond the use of renewable materials and create solutions that also enhance the efficiency of the product experience and most importantly – reduce waste.
According to the Environmental Protection Agency, containers and packaging make up roughly 28% of municipal solid waste in the United States, with that proportion steadily rising even as overall waste generation has increased
Nations across the globe such as France, Italy, Australia and China have initiated programs to phase out or tax single-use plastics and require recyclable packaging materials, with many other regulatory bodies following suit
A California initiative has qualified for the November 2022 ballot that would require all single-use packaging, containers, and utensils to be recyclable and tax single-use plastic packaging to fund recycling programs
M&A ACTIVITY
Packaging Deal Activity at Multi-Year High
DEAL SPOTLIGHT
SELECTED 555 PACKAGING TRANSACTIONS
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The opinions expressed herein are those of 555 Capital Advisors. There is no guarantee that any predictions/projections as to certain market activity or events will come to fruition or past market or transaction performance referenced within will yield the same results as transactions previously conducted by 555 Capital Advisors.
