Harris Williams professionals regularly attend industry conferences and events. On the flight home, they share three key takeaways to help shape your priorities.
Event: PACK EXPO, Las Vegas, Nevada
Report by: Patrick McNulty, managing director; Brad Morrison, director; and Brandt Carr, vice president; all of the Harris Williams Industrials Group
Event Overview: PACK EXPO is North America’s largest packaging trade show. The annual event draws more than 45,000 professionals and 2,000 exhibitors demonstrating the latest in packaging and processing innovation.
Why is this an important event for professionals active in this industry?
McNulty: “PACK EXPO is a leading trade show that provides the opportunity to stay on the forefront of packaging industry trends and see the latest innovations in packaging and processing technologies across industries. The EXPO is a great venue to see where the packaging industry is headed and to observe a diverse collection of innovation all in one place.”
Which trends, companies or business models were top-of-mind at the event?
Morrison: “Healthcare continues to be an attractive growth segment for plastics and packaging companies. Demographic trends, combined with the increasing importance and accessibility of healthcare worldwide, are creating robust demand for all parts of the global medical supply chain, including packaging materials, and that demand is very resilient.”
Carr: “Equipment companies were very prevalent at the show, including a multitude of automation options. The automation trend is contributing to a robust growth outlook for the packaging machinery market.”
McNulty: “Investors remain optimistic about packaging, but they’re also keeping an eye on market dynamics. Diversity and stability are top-of-mind, and businesses serving non-discretionary markets, such as consumer staples, continue to attract interest.”
Morrison: “Cold chain—moving perishable goods at a constant temperature—is another very bright spot for packaging as it sits at the intersection of several attractive trends. The general push for sustainable materials extends to cold chain, and several companies are working on innovations to make single-use products more sustainable or replace single-use materials. The increase in demand and regulatory attention has led to companies seeking ways to ship products over longer distances and at more stringent temperature requirements.”
Carr: “Software integration and data analytics were also highly visible at the show. Software integration between equipment companies and their customers enhances customer stickiness and brings a number of benefits when combined with analytics. Maintaining and mining data on a company’s installed base helps to proactively maintain quality levels, anticipate and correct problems before they occur, optimize efficiency, monitor consumables usage, and provide insights for future product development.”
What opportunities are these dynamics creating for strategic buyers and private equity investors?
Morrison: “Investors can realize value by finding companies that are ahead of consumer packaging trends such as sustainability, eco-friendly packaging, and innovative designs that enhance and simplify the consumer experience.”
McNulty: “Packaging suppliers offer an opportunity for buyers to enhance growth through investments or acquisitions in products that improve and simplify the customer experience. The innovation that is transforming this segment is also providing significant upside for savvy buyers.”
Published November 2019