What does the Rigid Packaging landscape look like in Europe?

The location of production facilities plays a significant role in the viability of packaging businesses. Due to the bulky product nature of rigid packaging, excessive logistics costs may quickly erode players’ profit margins. Geographic expansion comes with significant CAPEX in the acquisition or construction of new production facilities. Cash-rich players have a natural advantage as they can grow inorganically at a faster pace than smaller players with relatively fewer resources. That is exactly why smaller incumbents instead aim to develop an innovative edge to bypass this growth-driven competition. Furthermore, the increasingly stringent EU regulations on packaging waste and consumer demand for more sustainable packaging drive players to modify their production lines and to source more expensive sustainable materials from suppliers. In turn, this puts smaller players with less financial resources at a disadvantage. Despite the highly acquisitive strategies of large incumbents, the European landscape still has a rather fragmented nature, as international expansion remains difficult with comparable larger peers already levering an entrenched (local) presence.