The rigid packaging market comprises businesses involved in the production of solid packaging products made out of plastic, metal, glass or wood (excluded in this report due to the limited number of sizeable European players) for a wide range of end-markets. We segmented the European landscape by material type into: (i) plastics, (ii) metal, (iii) glass and (iv) multi-material. The type of ingredient utilised largely depends on the different characteristics and specification needed to store the packaged product. In addition, we included one material-agnostic segment of players that produce bottle caps, lids and closures.

The location of production facilities plays a significant role in the viability of packaging businesses. Due to the bulky but light product nature of rigid packaging, excessive logistics costs may quickly erode players’ slim profit margins. Geographic expansion comes with significant CAPEX in the acquisition or construction of new production facilities. Cash-rich players have a natural advantage as they can grow inorganically at a faster pace than smaller players with relatively fewer resources. That is exactly why smaller incumbents instead aim to develop an innovative edge (e.g. HPI Group spending ~10-12% of sales on R&D) to bypass this growth-driven competition. Despite the highly acquisitive strategies of large incumbents, the European landscape still has a rather fragmented nature, as international expansion remains difficult with comparable larger peers already levering an entrenched (local) presence.

Investor-led activity in European rigid packaging players has been significant, with >40% of identified players being investor-backed (August 2022). Stable product demand from multiple resilient end-markets, a fragmented competitive landscape with ample buy-and-build potential and opportunities to build winning niche propositions by front-running R&D are considered to be the most attractive factors for financial sponsors. In 2021, valuations paid for rigid packaging players averaged around ~12x EV / EBITDA.

The packaging industry faces a high degree of public scrutiny regarding resource efficiency and sustainability. Accordingly, players’ ESG focus mainly emphasises environmental factors relating to more energy-conscious production processes, closed recycling loops and adoption of more sustainable raw materials. Labour safety and product safety are the focal points in terms of social sustainability.