How can Companies Adapt for the Future of Packaging?

The global packaging industry is a growing sector, with the market valued at around US$1bn, according to Fortune Business Insights.

However, the sector accounts for 40% of global plastic waste.

To combat this, packaging companies are working towards meeting their sustainability targets and meeting recycling regulations.

Bain & Company’s 2026 Paper & Packaging Report explores how companies are adapting to the challenges of the sector, cutting costs and taking action to benefit the environment.

Ilkka Leppävuori, the Leader of Bain’s Global Packaging sector, says: “Paper and packaging executives today face a complex set of challenges, including low profitability, overcapacity and subdued demand levels.

“Stiff price competition is the norm and markets have diverged.

“Paper and packaging companies are spending less time marketing their sustainability efforts and doing more of the hard work to meet sustainability targets and evolving regulations.”

Sustainability: recycling regulations

Bain’s report reveals that while some companies are focusing less on external sustainability messaging, many are still investing in circularity.

In the packaging market, 59% of people surveyed said they would switch suppliers if they were not meeting their sustainability criteria in three years.

In Europe, the Packaging and Packaging Waste Regulation (PPWR) has introduced plastic levies and recycling mandates that affect cost competitiveness, with similar initiatives being adopted across the US and parts of Asia.

The PPWR encompasses measures to help standardise packaging regulations and cut greenhouse gas and fossil fuels:

• Plastic packaging must be made partly from recycled content
• All packaging must be recyclable by 2030
• Packaging must be clearly labelled with its material and how to recycle it or return it for reuse
• Deposit and return systems for packaging will be expanded and companies must make reuse or refill options available whenever possible
• Companies using non-recyclable or environmentally harmful materials must pay to dispose of them

The shift to chemical recycling

The Paper & Packaging Report also touches on chemical recycling, offering insights on how companies must move towards chemical recycling as it begins to scale.

Technologies involved in chemical recycling – such as gasification, pyrolysis and glycolysis – alter the chemical composition of plastic waste and turn it into raw materials in order to create new plastics and products.

Bain & Company says that companies aiming to stay ahead of the competition should capitalise on the near-term applications of chemical recycling that are already profitable, in preparation for scaling the technologies in the future.

This involves securing access now to the low-cost, high-quality recycled feedstocks and partnering with waste companies to find the most profitable solutions in the long term.

The report says that cost parity with virgin production in Europe could take between 20 and 30 years and could require more than €400bn (US$478bn) in cumulative global capital expenditures.

Peter Meijer, Head of the Global Energy and Materials Centre at Bain & Company, said on LinkedIn: “The question for plastics producers is no longer whether chemical recycling will scale – it’s who will secure the critical positions in the value chain when it does.

“Early leaders are crafting flexible strategies and investing in feedstocks, strategic partnerships and advanced recycling technologies and capabilities.”

All sustainability, net zero and sustainable supply chain leaders should attend:

• Sustainability LIVE: The Net Zero Summit - QEII Centre, London, March 4-5
• Sustainability LIVE: The US Summit - Navy Pier, Chicago, April 21-22

Co-located with Procurement & Supply Chain LIVE, these events brings together CSOs, ESG leaders and senior decision-makers at a moment when sustainability, supply chains and commercial performance are increasingly interconnected.

Tickets can be booked online today for The Net Zero Summit and The US Summit. Group discounts available.

AI in packaging value chains

AI can be used by companies in the packaging industry to reduce maintenance costs and time.

Machine learning models can create predictive maintenance algorithms for machinery, as well as having maintenance copilots to provide real-time maintenance instructions to employees.

Through the use of AI, equipment maintenance can generate value for paper and packaging companies, by reducing downtime and increasing machine output.

According to the report, companies that focus on maintenance can increase their tool-in-hand time by 15%, leading to an overall reduction in maintenance cost per ton of between 17% and 23%.