Industry Insights: Global Packaging - Winter 2026
We entered 2025 with expectations of growth and opportunity, only to be whipsawed by uncertainty in policy, trade, and overall economic growth. Nevertheless, Packaging remained a dynamic, innovation-driven industry with great opportunity to build value both organically and via M&A. There are several learnings from 2025 that we are watching as we progress into 2026.
Transaction Volumes were up again in 2025
Packaging transactions increased volume by 11% in 2025, defying an overall uneven market in M&A across all industries. As indicated in our Fall edition, 2025 deal volumes reached a new high on a Q1 surge, then normalized, with Q2–Q4 1.6% below the same periods of 2024. This included a cautionary note for Q4, where volume was down -20% over Q4-24, reflecting the lack of new processes which would have begun in Q2 but were postponed due to the uncertainty created by evolving trade policy. We believe that the M&A market is stabilizing and will return to modest growth in 2026 as both Buyers and Sellers become inured to policy volatility and those who paused in 2025 will re-enter processes in 2026.
Label Rollups appear to have peaked
Combined, LBO Platforms and Platform Addons accounted for 74% of 432 Label acquisitions tracked for 2018 through 2025. As of December 2025, there were no less than 45 active sponsor platforms in Labels. Of these, 71% of these platforms are aged 5+ years, including 21% at 7+ years. This is important as the average private equity holding period is five to seven years. In general, longer hold periods mathematically yield lower rates of return (IRRs), a key metric by which sponsors are measured. With platforms “aging out” with lower IRRs, there is both urgency for sponsors to exit and simultaneous downward pressure on Label M&A pricing. Labels have transitioned from peak rollup to selective consolidation: aging platforms create exit pressure while buyers prioritize differentiation and synergy capture.
Technologies Driving Change
We see this in both adoption of RFID and digital printing technologies. RFID technology continues to gain traction across packaging workflows, driven by demand for traceability, inventory accuracy, and smart packaging solutions. With RFID infrastructure becoming a gating factor for supplier selection, targets with RFID capabilities are increasingly attractive. Gaining end market exposure to RFID will allow converters to maintain or increase market share. Secondly, next-generation digital printing assets are making inroads into broader, traditionally flexographic markets as converters adjust business models to optimize digital printing. Multiple OEMs have launched wider, faster digital printing platforms that offer lower costs per converted unit and faster changeovers, putting flexographic printing under pressure in segments beyond historically short-run, SKU-heavy environments. Converters investing in next generation digital converting assets, digital printing IP/service networks, and consumables for this market are well-positioned for growth.
Machinery & Equipment Markets Struggling
A number of equipment providers to packaging converters noted shrinking pipelines in 2025. Following “Liberation Day” and successive whipsawing announcements, it is no surprise that consumers of equipment were reticent to place orders for new lines. This curtailment of demand was particularly hard felt among those with large selling price installations (coating lines, extrusion lines, custom installations, etc.); less impacted were smaller installations (e.g., slitters, die cutters) and standard systems, and positively impacted were those offering service and parts to keep existing lines in service. In the immediate term, investors should focus on those equipment providers with a lower average selling price and more substantial aftermarket business lines.
Paper Capacity Rationalization
2025 witnessed structural adjustment in upstream paper production, with North American producers taking out 6 million tons of capacity, including a nearly 10% reduction in containerboard. The rationalization in NA was in response to years of softening demand following the race to meet the pandemic volume surge. The adjustment has also been noted in Europe, though yet not to the same degree. As demand eventually stabilizes, non-integrated packaging converters will face a more disciplined supply base. Paper capacity rationalization shifts bargaining power toward integrated players; independents should double down on procurement strategy and value‑added niches.
Relative Resin Price Stability
We have not commented on resin prices in several years – which is unusual for a market driven by commodity inputs. Not since 2021 have we seen major disruptions and widespread force majeure declarations. Certain specialty inputs (e.g., antimony for fire retardance) have seen volatility due to tariffs and/or trade frictions, but the overall result has been a more stable input and pricing environment among major packaging resins such as HDPE, LDPE, PET, and PP. This has been a welcome respite for both operators and acquirers. We caution that resin stability is a real but likely temporary tailwind — helpful for managing today’s margins but insufficient as a strategy. Building discipline into contracts and scenarios is still essential to overall strategy and long-term success.
Stress on Sustainable Business Models
The drumbeat for sustainability did not subside in 2025, particularly for resin-based and composite packaging. We struggle, however, to reconcile the demand for sustainability against an equally loud drumbeat of recycling companies failing (Alpek’s Pennsylvania PET plant, Danimer Scientific, Brightmark, rPlanet Earth, Blue Cycle – we can go on). The market has not yet found a way to support economic models for recycling, particularly in the face of competitively priced virgin resins (see above). There is a reckoning in recycling that needs to happen if we are to break out of this cycle. As Sustainability remains non-negotiable for brands (and regulators), the Packaging Industry should prioritize design‑led technologies (downgauging, mono‑materials) over unproven recycling economics.
