NOTABLE 2024 HIGHLIGHTS CONT.
Operational Trends:
We saw manufacturers and converters invest in new technology, equipment, and robotics to reduce costs, increase throughput, and address the continued labor challenges – with a focus on scaling through automation rather than human labor. Advances in technology shifted the trend for labels from narrow web to wider web films (and later slit into multiple widths) to yield versatility while lowering production costs. As supply chains normalized, destocking was widely seen as having run its course. In the second half of 2024, we saw another wave of increased inventory purchases by public packaging companies. This is likely a defensive strategy to manage potential disruptions from tariffs.
“ Flexo printing is not going away, but the market has shrunk as we saw continued movement to incorporate digital printing technologies to reduce lead times/enable shorter runs as the market swung towards personalized packaging and labels.”
– Sales Leader, Packaging OEM Equipment Provider
M&A Trends:
Consolidation within the packaging industry via M&A continued through 2024, highlighted by a handful of mega-deals in the space (i.e., Smurfit/Westrock, International Paper/DS Smith). Per Pitchbook, North American packaging M&A volume in 2024 slightly lagged the prior year until Q4 2024 when deal volume surged 25% over Q4 2023, reflecting improved market sentiment amid greater macro clarity (election uncertainty and tightened liquidity markets) entering 2025. Amidst uncertainty in the broader macroeconomic environment, packaging companies, large and small alike, took the extra time to focus on their core business functions, with some public companies divesting non-core assets and smaller, private businesses choosing to focus on key customers and core services/products. “ The pace of M&A has slowed slightly in 2024, with more focus on smaller bolt-on deals under $10 million to capture synergies. While we anticipate broader activity picking up in 2025, it will be tough to match the strong performance of 2023 and 2024, especially as perceived asset quality has declined as of late, amid ongoing consolidation opportunities.”
– Corporate Development Leader, Leading Label Printer and Converter
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