Packaging continues to drive broad investor appeal due to its end-market diversity, ubiquitous applications, and demand closely tied to broad consumer spending patterns. 

Our Industrials Group and Healthcare & Life Sciences Group recently attended WestPack at MD&M West 2024—an event dedicated to elevating the world of medical devices and advancing manufacturing excellence through packaging. There, our senior professionals saw the latest trends influencing healthcare packaging on full display. 

Below, they share key takeaways from the event and their impact on the packaging sector’s M&A opportunities. 

Prioritizing Sustainability and Performance

Sustainability is a much-discussed theme across the packaging sector. It’s becoming more important in healthcare, where leading packaging companies are solving growing waste management and environmental challenges to support the need for a circular model for medical products. 

“In the U.S., environmental and quality regulations are quickly catching up to the standards set by other countries around the word,” says Brad Morrison, a managing director in our Industrials Group. “For example, new FDA packaging design and manufacturing regulations for medical devices and drugs are more complex to comply with and highly scrutinized.” 

To meet these expanding government requirements and their own sustainability objectives, medical packaging customers are turning to more eco-friendly, reusable, and recyclable solutions. However, these products can’t compromise performance or patient outcomes. 

“In healthcare, packaging performance is essential to protect expensive, critical items—such as medical devices and specialty therapeutics—while ensuring safe, on-time delivery to patients,” explains Chuck Walter, a director in our Industrials Group. “The best solutions maintain high performance while pushing the needle on sustainable materials.” 

These businesses are revolutionizing healthcare packaging through sustainable thermoforming barrier packaging and emerging material science, including innovations in polymers, surface modifications, and processing. At the same time, they’re using novel recycling technologies—like molecular recycling that powers the creation of sustainable materials into medical device packaging—to close the loop on material supply chains. These recycling techniques are vital to achieving greater circularity for difficult-to-recycle plastics, while helping to create new recycled plastic products that maintain rigorous healthcare quality standards. 

“Ultimately, the most sought-after healthcare packaging businesses are helping medical and life sciences companies to enhance their environmental stewardship without sacrificing product quality or patient care,” says Morrison. 

Beyond sustainability, top packaging companies are also innovating in their data collection, design, and manufacturing processes. For instance, generative AI is being used to mine customer data and improve traceability throughout the supply chain to predict customer behavior, better meet customer needs, and continuously improve packaging performance. 

In addition, transformative automation technologies are enhancing packaging design and manufacturing capabilities. In a strained supply chain and labor environment, automation allows packaging companies to be more flexible, build scale, and lower costs. “Best-in-class packaging businesses are using automation to increase manufacturing efficiency, improve product quality consistency, optimize package sizes, provide customized packaging, and more,” notes Walter.

An Emphasis on Innovation

Throughout packaging, the intersection of sustainability and performance is creating growth opportunities for innovators in the space. 

Within healthcare specifically, investors should seek packaging companies that are capitalizing on shifting environmental and quality regulations and a greater demand for recyclability and circularity. “Forward-looking trendsetters that adopt emerging sustainability, AI, and automation practices will differentiate themselves and win in the long term,” says Morrison. 

These burgeoning themes, coupled with the sector’s ubiquity and end-market diversity, are creating exciting opportunities for a wide range of packaging companies and M&A investors. 

To discuss the value-creation potential in packaging, please contact our senior professionals.