Mergers & Acquisitions
Energy Prices Top Trends Affecting Packaging M&A
Now that we’re in 2026’s second half, discussion in the packaging sector increasingly mirrors current events—specifically, the dislocation in oil prices stemming from the conflict in the Middle East.
The status of the Strait of Hormuz remains an open question, creating uncertainty and reshaping some end-users’ purchasing patterns even as they look for ways to “time” potential price fluctuations. No packaging sub-sector is immune, but the impact has been mostly company-specific, particularly when it comes to garnering outside investor interest. Companies that can show their value proposition amid the uncertainty will continue to gain M&A traction. Much of that is the ability to effectively pass through higher energy costs to customers.
This isn’t the first time—nor even the first time this decade—that the industry has faced these issues, with clear parallels to the high-inflation era of 2021-22. Then, as now, companies that rely on commoditized products and low prices will likely feel the biggest pinch. They face the difficult choice of holding the line despite falling revenue or raising prices and possibly losing customers to competitors.
But companies whose customers know they are getting higher-level value—through better material science, better performance, more design capabilities, or other means—can more easily pass through costs. Going a step further, those companies that can effectively communicate that higher-level value to investors will still get noticed.
Energy is far from the only story in packaging this year, with some trends reaching inflection points after recent regulatory and technological developments. The following are stories to watch during the remainder of 2026.
Keep an Eye on Digital Printing
Digital printing is primed for M&A activity amid improved technology and consumer trends.
Brands are managing significantly more Stock Keeping Units (SKUs), and campaign cycles have shrunk from years to weeks, with ecommerce making shelf-ready packaging more important. More traditional printing technologies and their longer runs face headwinds while digital is narrowing the competitive-advantage gap.
These shifts carry major M&A implications for strategic buyers, with legacy players acquiring digital platforms to position themselves as hybrid providers. But the implications appear to extend beyond strategic deals, as the January acquisition of ePac Flexible Packaging by Butterfly Equity shows how financial investors are adding digital printing capacity. For Butterfly, a Los Angeles-based private equity firm that focuses on the food sector, the transaction was its first in packaging, with William Blair advising the firm on the transaction.
The ePac deal could serve as a signal to other private equity firms about digital printing just as converters are looking to expand into digital either organically or through bolt-on acquisitions.
New State Sustainability Rules Emerge
Extended Producer Responsibility (EPR) laws taking effect in a handful of states are reshaping packaging’s value chain. Oregon launched its law in 2025, and Colorado’s was set to take effect this year, though both are facing legal challenges. California and other states are not far behind. The rules broadly seek to incentivize brands to fund enhanced recycling infrastructure and utilize increased recycled content in plastic packaging.
EPRs generally require producers to pay fees to a Producer Responsibility Organization (PRO) that are scaled to the volume of the material they introduce to the state—with the fees going to subsidize and improve the state’s recycling ecosystem. But the details of the laws vary, and there are a host of other challenges, including the difficulty in transporting materials from rural or underserved areas to processing facilities, fluctuations in commodity prices and demand for recycled materials, poor material quality, and insufficient infrastructure.
Some legal challenges have already popped up, and obstacles with implementation could make states more lenient when it comes to early enforcement. But companies operating in the states with EPR and in states where the laws are set to launch in the coming years should shore up their supply chains and be proactive when it comes to data-capture requirements if they want to be attractive to investors.
Energy to Remain Top-of-Mind
Trends related to digital printing and sustainability laws are important, but energy and raw material prices are likely the most significant factors to watch in the coming weeks and months. Even packaging companies that don’t rely on petroleum to make products rely on it to transport them, so price volatility—or worse, difficulty in procuring supply—appear poised to remain top-of-mind across the sector.
While there are constants in packaging M&A—early-year predictions for fewer megadeals and a focus on synergies are bearing out—the conflict in the Middle East has changed conversations across the sector and put a magnifying glass on the fragility of the supply chain. That could increase the focus on synergies, especially if prices and supply continue to fluctuate, but the full effect on the market will depend on how high prices go—and how long they stay elevated.
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