Over the decades, the global packaging industry has enjoyed healthy growth, supported by several megatrends. They will continue to shape the business, and we expect that two of them—sustainability and digital (particularly e-commerce)—will create significant challenges for industry leaders, as well as once-in-a-lifetime transformational opportunities.
To understand what lies ahead, we looked back at how the industry has adapted over previous decades. We found that since 2020, there have been three eras, including today’s, stretching into the immediate future. Each era has been characterized by large changes in consumer behavior—changes that brought into existence new packaging products and other innovations that ultimately led to new corporate and value chain structures. Significantly, as these three eras unfolded, the proliferation of digital devices and social media sped up the pace of change and influenced the type of disruption.
In the current era, a dramatic shift to online shopping increased global regulation of packaging waste, and the acceleration of consumers’ sustainability concerns have combined to reinforce the rapid pace of change. If CEOs are to navigate this extraordinary disruption, next-generation industry winners must update and future-proof their business models and market approaches.
Context: Three disruptive eras in the global packaging industry
Packaging is a critical enabler for the everyday lives of most consumers. It helps to support the purchasing decision journey in retail stores, creates cost-efficient delivery systems for brand owners, minimizes product breakage and food waste throughout the value chain, and facilitates the consumer’s need for convenience. In 2019, we outlined five major trends we expected to change the game in the diverse $1 trillion-plus packaging industry: e-commerce, changing consumer preferences, margin compression, sustainability, and digitization. We predicted that these trends would raise the bar for performance over the next five to ten years. In 2020, the COVID-19 pandemic made food safety and hygiene a sixth key industry-shaping trend. Overall, the strategic importance of well-functioning and cost-efficient packaging materials for customers in the value chain accelerated, given the stretched supply chains of the pandemic. What now lies in store for the packaging industry during the next normal up to 2030? How can CEOs navigate these choppy waters?
To understand the future, industry leaders must consider where the packaging industry is coming from. Each of the three eras we identified (Exhibit 1) has been characterized by major changes in consumer behavior (factor 1), which promoted innovation and the development of new packaging products (factor 2). Changes in the market and global environment ultimately led to renewed corporate and value-chain structures as well (factor 3).