Major Trends in the Global Packaging Sector
One of Sealed Air’s primary operations is food packaging – an industry seeing 3% annual growth globally. The company produces flexible plastic, which has been the fastest-growing category in food packaging for the past five to seven years.
In terms of the major trends affecting the food packaging market today, the former VP listed the shift to convenience food; scarcity of labour; and a growing focus on sustainability.
Another significant business area for Sealed Air is protective packaging. Although this market is smaller than food packaging, it is growing much faster – which is mainly driven by e-commerce. However, the executive warned, companies working in this space need to be prepared for a number of challenges, primarily a growing emphasis on sustainability.
As a result of the shift away from plastic, paper companies, such as Ranpak, could be huge disruptors. They can do “essentially anything with paper that Sealed Air, or Pregis for that matter, does with plastic”, especially for light cushioning or voidfill inside packages.
There are other disruptions that could affect Sealed Air. One of the major risks is Brexit. A hard Brexit or move to World Trade Organisation trading terms would cause “significant inefficiency” in their supply chain. Sealed Air produces material from the UK that goes into the EU and vice versa.
M&As are also changing the competitive landscape, with two major purchases taking place this year. Amcor buying Bemis created the largest packaging company in the world. Meanwhile, Berry Global Group acquired RPC Group, resulting in another large competitor for Sealed Air.
However, Sealed Air is implementing its Reinvent initiative, which is aimed at driving profit by improving innovation, among other goals. Our specialist believes they will hit their targets in 2019, but achieving this will get more difficult in the future.
To access all the human insights from Third Bridge’s Sealed Air Corp – Reinvent Initiative & Competitive Pressures Interview, click below to view the full transcript.
The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.
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