This article first appeared in the April 2025 issue of ProPack.pro magazine, authored by Mattingly’s Peter Fotiadis
In the February issue of ProPack.pro, I shared my 2025 predictions for the packaging industry and anticipated continued industry consolidation. While three months is a long time in such a fast- moving industry, I’m surprised by how quickly these trends have taken hold in early 2025.
At the larger end of the scale, some of the biggest packaging transactions we have ever seen emerged: Megadeals like Smurfit Kappa acquiring Westrock, Amcor and Berry announcing a proposed merger, and closer to home, Orora disposing of its packaging distribution business to Veritiv (following its major acquisition of Saverglass in late 2023).
Whilst most of these assets are offshore, the changing of hands does produce ripple effects on the Australian market.
On a smaller, more local scale, Spicers acquired Signet Packaging, Interpak acquired Orora’s closures business, and Tricor Braun continued its acquisition strategy picking up UniquePak and Alplas, among a list of other packaging transactions.
The strategic drivers are clear, including scale efficiencies and footprint consolidation, and vertical integration and capability expansion. There is both industry and private equity interest in this space.
In the public forum, IVE Group has made its intentions clear that it is open to further packaging acquisitions in the local market. There is already a hive of M&A activity working quietly through the customary processes, and we expect a number of these to transact in 2025. Stay tuned.
Despite some market uncertainty, the general consensus is that uncertainty is a short-term issue, so the key need to refresh capital in the industry continues. Whilst businesses are putting more scrutiny across investment decisions, the key focus areas remain:
- Capital equipment can be a key differentiator
- Automation and efficiency gains are key
- Investing in production flexibility to meet evolving customer demands is critical: digital, multi-size, customisations, and more.
Cost-out programs in full swing
Turning into 2025, businesses continue to push cost-out programs to maintain margins, with common initiatives including process optimisation, footprint and supply chain reviews, and tightening discretionary spend.
The challenge is ensuring that cost reductions don’t come at the expense of long-term competitiveness. The best execution strikes a healthy balance between immediate cost savings and maintaining ability to scale and compete effectively.
Sales excellence: The next competitive battleground
The natural progression on the business improvement continuum, after investment, cost out, and M&A opportunities are exhausted, is sales excellence. Those with cost-out programs largely embedded, attention is shifting to driving revenue growth and margin improvement. The most effective businesses are focusing on:
- Customer segmentation and value- based pricing to maximise profitability
- Data-driven sales strategies that enhance commercial decision-making
- Solution-based selling to increase customer loyalty and differentiation.
This shift suggests that commercial capability is becoming a key differentiator – businesses that invest in stronger sales execution will be well-placed to outperform competitors still focused solely on cost control.
Sustainability: Talked about but often deprioritised
Sustainability remains a consistent discussion point, but a few months into 2025, we have noticed it has taken a back seat with more immediate business pressures emerging.
Some businesses are embedding sustainability into broader efficiency programs, such as energy reduction and process optimisation, but others are pausing major initiatives to focus on financial and operational priorities.
This is consistent with the historical cycle. Of course, the risk is that businesses lagging in this space will fall behind as regulation and customer expectations evolve.
A moment for strategic reflection
The packaging sector is progressing at different speeds across this continuum of business improvement. Where does your business sit? What you do for the balance of 2025 will be decisive – it is time to reassess priorities and ensure strategic alignment for sustained success.
