Last month we met with industry colleagues at Pack Expo in Las Vegas, all of whom reaffirmed Packaging’s role as a dynamic, innovation-driven industry. Investor interest is intensifying around automation, digital transformation, and niche engineered solutions. Conversations with private equity sponsors, strategic buyers, and operators revealed a clear pivot toward resilient, regulated end markets and asset-light business models. These insights from Pack Expo mirror the broader themes shaping today’s Packaging market.

Transaction Volumes are Up Year-to-date

However, this comes with an asterisk. Volumes were very strong in Q1 but then declined significantly, with uncertainty dampening investments following Q1. We have yet to see an uptick in activity but believe that this will appear in 2026 as buyers and sellers adjust to the environment of heightened uncertainty that shows no sign of abating. We also encourage investors to revisit failed processes from 2023–2024 (with adjusted expectations). Investors should be proactive in sourcing off-market opportunities and re-engaging with previously shelved assets and carveouts/divestitures.

RFID Adoption Accelerates

RFID technology is no longer experimental—it has finally become foundational. 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. For supply chain partners, consider bolt-ons in RFID software, sensor manufacturing, and systems integration.

Digital Printing Challenges Flexo

Next-generation digital printing assets are making inroads into broader, traditionally flexographic markets. Multiple OEMs have launched wider, faster digital printing platforms in 2025 with installations underway and ramping into 2026. These systems offer lower cost 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.

Automation Demand Remains Strong

2025 has seen a marked shift away from full-scale equipment replacements and toward incremental control upgrades and retrofits. Rising costs and uncertainty in 2025 volumes have driven more capital-efficient, productivity-focused initiatives as well as a pivot to flexible systems with smaller footprints. Only by late Summer 2025 were we seeing end users start to move forward on major capex initiatives. Also, we note that engineering and automation firms with robust aftermarket parts, capabilities, and services are outperforming. These firms with higher portions of business focused on recurring revenue models are receiving increased levels of interest from both private equity and strategic acquirers.

Canadian Recycled Plastics Market Gains Structure

Under the new regulatory framework, the Canadian market for recycled plastics is maturing quickly, following trends in Europe and offering a more secure and structured supply chain for rigid and flexible packaging providers. Players in this market are starting to secure offtake agreements, which will play out further as we head into 2026. Investors should consider cross-border plays in recycled content, material recovery, and circular packaging platforms. Partnering with firms who have secured quality, consistent feedstock will be powerful in the years to come.

Regulated End Markets Attract Capital Amid CPG Softness

Over the past decade, sectors like Flexibles and Labels that serve large CPGs have enjoyed growth of at least two percentage points above GDP. With CPGs facing softness in volumes/pricing, these premia have shrunk. Combined with weak real GDP growth, these markets have become more challenging for both operators and acquirers. This is driving investors to seek resilience and margin stability among participants in value chains for medical, aerospace, and other regulated end markets.