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Packaging M&A update: Q4 2019

The global packaging industry is expected to see continued growth in many of its sectors, such as molded fiber packaging, protective packaging, polyethylene terephthalate (PET) packaging, and the pharmaceutical packing market. Growth in many of these sectors can be fueled by increased need for more durable and environmentally friendly alternatives for packaging solutions. This packaging mergers and acquisitions (M&A) update provides Deloitte Corporate Finance LLC insights and market data analysis that shed light on M&A trends in the packaging industry.

Packaging trends

  • Molded fiber packaging market:1 The market for molded fiber packaging is expected to grow at a compound annual growth rate (CAGR) of 7.2 percent from 2019–2023. Molded fiber, material typically created from recycled paperboard or other natural fibers, is becoming increasingly popular as companies place a higher emphasis on sustainable operating practices. The material is seen by many as an environmentally friendly packaging solution because it is biodegradable and expels no hazardous waste.
  • Protective packaging market:2 The protective packaging industry was valued at $25.8 billion in 2019. The industry is expected to grow by an annualized 4.8 percent in the coming years, reaching a value of $34.1 billion by 2025. Protective packaging typically consists of plastic or paperboard material designed to protect goods from atmospheric, magnetic, and electrostatic vibrations and shocks. The industry has benefited from favorable tailwinds, including a growing e-commerce market.
  • PET packaging market:3 PET packaging is derived from a polyester to create lightweight, durable, and highly customizable packaging solutions, which are often molded into plastic jugs and boxes. The industry is predicted to grow by an annualized five percent from 2019–2025, increasing the market from an estimated $49.8 billion to $66.4 billion. PET packaging growth is expected to be robust in Europe, where the European Parliament approved legislation that bans single-use plastics in Europe by 2022, creating the need for more durable alternatives.
  • Pharmaceutical packaging market:4 The global pharmaceutical packaging market is expected to expand to $118.0 billion by 2025, representing a CAGR of 8.2 percent from 2019–2025. North America is expected to remain the largest pharmaceutical market due to a strong drug producing sector, a growing oral drug delivery market, and improved health awareness. Applications of nanotechnology in the medical industry are also posed to have a sizable impact on pharmaceutical packaging by encouraging next-generation packaging solutions.

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MarketWatch, "Molded Fiber Packaging Market size with reach CAGR of 7.24 percent in 2023 | Future Investments in Packaging Sector," October 15, 2019, https://www.marketwatch.com/press-release/molded-fiber-packaging-market-size-will-reach-cagr-of-724-in-2023-future-investments-in-packaging-sector-2019-10-15, accessed January 14, 2020.

Mordor Intelligence, "Protective Packaging Market - Growth, Trends, and Forecast (2020-2025),"  https://www.mordorintelligence.com/industry-reports/global-protective-packaging-market-industry, accessed January 14, 2020.

Mordor Intelligence, "PET Packaging Market - Growth, Trends, and Forecast (2020-2025)," https://www.mordorintelligence.com/industry-reports/pet-packaging-market, accessed January 14, 2020.

Mordor Intelligence, “Flexible Packaging Market - Growth, Trends, And Forecast (2019-2024),” https://www.mordorintelligence.com/industry-reports/pharmaceutical-packaging-market-industry, accessed January 14, 2020.

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