Table of contents
Key takeaways
The board packaging industry produces paper-based packaging from solid and corrugated boards, with the overall aim to contain, protect and/or display goods. We segmented the European market by players’ material of choice into: (i) corrugated board, (ii) solid board and (iii) mixed.
There is a clear difference between the identified market verticals, with the corrugated board segment considered to be consolidated, whereas the solid board and mixed segments have a rather fragmented nature. The commodity-like nature of corrugated board packaging serves as the primary driver for segment consolidation, with players only being able to successfully compete beyond a certain scale. As such, the corrugated landscape is depicted by integrated producers that generate large annual packaging volumes, whereas the solid board and mixed verticals are characterised by a long tail of (specialised) SMEs.
Sponsor-led interest has been limited, with only ~18% of identified European assets being backed by financial sponsors (May 2023). Herein, backed companies predominantly operate in the solid board and mixed segments, while only one corrugated board player received institutional backing. Thin profitability margins, limited cash generation potential, low individual market power (e.g. solid board) and capped international expansion opportunities (e.g. corrugated board) are considered the main detractors for investors. Nonetheless, the industry offers ample buy-and-build opportunities as well as consistent revenue growth and high downturn resilience.
ESG topics are primarily rooted in environmental challenges. The production of board packaging is associated with significant CO2 emissions, alongside the high amounts of energy consumed by production machinery. However, when comparing the total carbon footprint to other packaging alternatives, board packaging is considered the most sustainable option. As such, identified players are investing heavily in methods to fully capitalise on this inherent advantage (e.g. increasing the proportion of recycled fibres in the production mix), alongside ways to make the overall production process greener (e.g. biomass, hydrogen).
Company benchmarking
Market growth
Statista (March 2023) estimates that the global board packaging industry’s market value amounted to ~€182.2bn in 2021 and anticipates it to reach ~€232.1bn by 2026 (+5.0% CAGR 2021-2026)
Industry executives interviewed by Gain.pro (April 2023) estimate the European solid board packaging market to be valued between ~€13-18bn, growing between ~2-4% YoY in the medium term
An industry CEO (interview by Gain.pro, April 2023) projects the global corrugated board volume to equal ~200m tonnes per annum, of which ~55m tonnes originate from European producers (FEFCO, May 2023)
Positive drivers
Increasing sustainability concerns by consumers and governments create a market shift from plastic- to paper-based packaging (McKinsey & Company, January 2020). Herein, a broad range of food- (e.g. vegetables, fruit) and non-food (e.g. detergents) products are packaged in paper-based alternatives which offer greater recycling rates than plastic (interviews by Gain.pro; Two Sides, May 2020)
The rising number of single-person households in the EU (+29% between 2009-2021) triggers changing consumption patterns towards smaller-portioned products, thereby boosting packaging demand (Eurostat, May 2022). Similarly, population growth on the back of an ageing society supports packaging volume growth in the long term (interview by Gain.pro)
The COVID-19-induced surge in e-commerce is expected to persist in the post-pandemic world, with corrugated board packaging producers set to benefit the most (McKinsey & Company, May 2023; interview by Gain.pro)
Negative drivers
The changing regulatory environment (e.g. EU’s packaging waste regulation), trying to limit overpackaging and reduce unnecessary packaging, is likely to pressure board packaging volumes in the medium- to long-term as packaging reusability (e.g. rigid alternatives) is favoured over recyclability (interview by Gain.pro; European Commission, November 2022). Particularly, younger generations are willing to limit and adjust their consumption to counteract climate change (Blue Horizon, May 2023)
Margin pressure in an increasingly competitive environment, coming both from upstream paper mill operators (e.g. Billerud) entering the value chain as well as from emerging print brokers who provide more extensive offerings and are able to undercut traditional producers in terms of price (interviews by Gain.pro)
Conscious consumerism leading to lower volumes of disposable packaging on a per capita basis, with board and paper packaging representing the main packaging waste material across the EU (~41% of all waste generated in 2020; Eurostat, March 2023). Board packaging waste declined for the first time since the last financial crisis during COVID-19, which is expected to persist in the coming years (interview by Gain.pro; Umwelt Bundesamt, September 2022)
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Board packaging industry industry.
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An in-depth look into 78 private companies, incl. financials, ownership details and more.
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ESG assessments with highlighted ESG outperformers
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