Global Packaging Industry Set for Continued Growth Fuelled by Innovation

 

Pöyry Management Consulting, Finland, selected the Future of Packaging theme for its annual Investors Breakfast held this week at Stationers’ Hall in London, U.K. The packaging sector has enjoyed stable growth for the past two decades, has proven to be largely recession proof, enjoys an optimistic outlook for the years ahead, and generates attractive returns on private equity investment. 

Jarkko Sairanen, president at Pöyry Management Consulting, said that "packaging is a $670 billion market and we are seeing positive growth across all packaging materials—this makes it a very exciting and dynamic industry at the moment. This truly global industry is performing well globally—and very well in the Asia Pacific region in particular due to the link between demand and population growth. The other drivers of this vast industry are interlinked and complex but include retail structures and competition, consumer behavior, materials and technology, cost, sustainability, and regulation. It is a pleasure to bring together investors and industry figures at our event to discuss these issues in depth."

Special industry guest Jari Latvanen, EVP, head of Stora Enso Consumer Board, delivered a presentation informed by his FMCG background and understanding of consumer purchasing behavior and trends. He identified the consumers as the key driver for both growth and change, and linked the brand owners and Stora Enso responses to the observed consumer behavior.

Latvanen said that "the future is now. At Stora Enso, we believe that everything that’s made with fossil-based material today can be made from a tree tomorrow. There are some exciting innovations taking place in this area such as micro fibrillated cellulose (MFC). With MFC, you can make high-quality packaging that is lighter and more durable from less raw material. You’ll get more for less, without compromising on quality.

 

"The demand for more paperboard packaging from consumers is also clear and this technology helps us to do more to match it. We work across the value chain to understand consumers who are increasingly conscious of what goes into their food and how that is packaged and delivered. Brands can no longer ignore this. We need a 360 degree view of the product," Latvanen explained.

 

Sairanen was joined by fellow Pöyry consultants David Powlson and Outi Juntti who added additional perspectives on the forces shaping the future of packaging such as sustainability, and the need for packaging producers to continuously maintain the balance between cost, quality, and functionality as well introduce cutting-edge technologies such as RFID.

Managing director of Pöyry Capital, Cele Moncayo-Quiros, analyzed packaging as an asset class and covered the financial responses from the public and private equity markets to the growth of packaging. On the private equity side, he explained how some packaging companies were being broken up for IPOs and divestitures and that these investments were generating returns in the range of 30% - 70% for the private equity funds.