30K Feet: Key Takeaways from The Future of Packaging

Harris Williams professionals regularly attend industry conferences and events. On the flight home, they share three key takeaways to help shape your strategy.

Event: The Future of Packaging, presented by Smithers Pira and LEK Consulting

Report by: Brad Morrison, Director, Industrials Group; Brandt Carr, Vice President, Industrials Group

Why is this industry on your radar?

Morrison: The packaging industry is a large (over $885 billion of product consumed annually1) and highly diverse industry. In addition, there are a number of substantial, secular tailwinds—such as e-commerce, sustainability and shifting consumer preferences—driving strong, consistent growth globally. As such, it has become an increasingly popular space for M&A activity, as investors seek defensive plays within the broader industrials landscape.


Which trends, companies or business models were top-of-mind at the event?

Carr: This year’s event was specifically focused on the theme of sustainability within the packaging industry. Within this broader topic, a number of specific approaches to sustainability were discussed, including source reduction (materials and energy use); reuse, recycling and recovery processes; carbon and water footprints; and circular economy life cycle analyses. 

Morrison: One of the primary drivers of the sustainability initiative is e-commerce, which represents nearly $33 billion of annual packaging consumption globally. Another is healthcare packaging, which represents approximately $34 billion of annual packaging consumption globally.2 Within each of these sectors, there are a number of game-changing innovations emerging to reduce waste and deliver goods in a more environmentally friendly way.

What opportunities are these dynamics creating for strategic buyers and private equity investors?

Morrison: The push for sustainability by consumers has created a number of opportunities for both strategic buyers and private equity investors. For strategic buyers, this paradigm shift in demand has created a renewed focus on (and thus, capital allocation toward) innovation, whether through internal R&D or acquisition. 

For private equity investors, sustainability represents a unique opportunity to take advantage of a strong, secular trend that underpins stable growth across economic cycles for potential platforms. In particular, the increasing number of sustainability-focused start-ups combined with the fragmentation of the packaging industry will continue to provide investment opportunities for both buyer sets.

1. Smithers Pira

2. ibid

Published June 2019