Packaging M&A update: Q4 2016
Sustainability and the use of plastics continue to remain strong within the packaging industry, as strong consumer spending and low input prices are expected in the coming year. This Packaging M&A update provides Deloitte Corporate Finance LLC insights and market data analysis that shed light on M&A trends in the Packaging industry.
- Consumer spending. An increase in consumer spending often propels strong demand for packaging products, especially for food and consumer applications. Consumer spending is expected to further increase in 2017, likely creating strong growth opportunities for packaging manufacturers.
- Declining input prices. Declining prices for key raw material inputs, specifically plastic resin, have allowed many operators to significantly boost profitability, and utilize excess cash flow to make capital investments in expanding and upgrading equipment.
- Sustainability. Packaging manufacturers with sustainable manufacturing practices and recyclable products have seen a significant increase in demand due to a shift in consumer preferences towards environmentally friendly products.
- Favorability of plastics. The use of plastics as the medium of choice for packaging products has significantly increased due to their light-weight properties, flexible design features and visual appeal, and rapid advancements in technology.
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1 “Packaging & Labeling Services in the US: Market Research Report”, IBIS World. June 2016.
2 “Bemis Company, Inc.” Equity Research Report. RBC Capital Markets, Inc. February 18, 2016.