The packaging industry is currently characterized by great dynamics. This brings new players, threatens established players and creates scope for growth in the form of new business models, strategies and solutions. In a study, we have examined developments in the packaging value chain. Where is the market heading? Why is growth important and what growth rates are healthy? And what factors should companies focus on to achieve sustainable growth? We give you valid insights and ten specific tips. Gather inspiration to turn the pressure to act into new creative power and actively shape the market!
The importance of growth
Companies without growth stagnate, lose market share and are subsequently set back entrepreneurially. The simple formula is: If you don’t grow at least in line with market volume, you lose market share. Healthy growth therefore ensures a company’s competitiveness.
Weak growth also has the effect of amplifying the impact of external pressures, such as inflation or increasing competition. Companies without growth have nothing to counter the negative factors. They lack growth as risk insurance.
Meaningful key figures and benchmarks
Relevant benchmarks and indicators can be used to define a “healthy growth corridor” for companies.
- On the market side, the number, tonnage and value of packages placed on the market can be used for the packaging industry and compared with economic variables.
- Translated to the company side, the number of units produced, the sales volume by weight as well as sales and profit as key figures come into focus.
- The volatility of the markets makes it necessary to consider various measurements.
Growth targets in the packaging industry
The average growth in the production value of the packaging industry in Germany was 0.5 – 2 percent per year from 2015 to 2020.
Based on the relevant benchmarks mentioned above, the minimum expectation for the company’s growth in terms of sales should be between 1 – 3 percent per year. The goal for the company should be to exceed 3 percent annual growth.
For the calculation to work out in the end, it must be ensured that the growth is actually profitable growth. It is therefore crucial to look at the EBIT margin.
10 success factors for growth
To understand where the market is heading and which factors companies should focus on to achieve sustainable growth, we conducted a study. It examines the relevant and profound developments in the value chain and provides a solid and valid basis for identifying the most promising growth factors.
Success factor #1: Sustainability
Sustainability can be both a growth and innovation driver. Important for companies in the packaging industry: They must clarify for themselves where exactly they want to go in terms of sustainability and what steps are necessary to achieve this.
Success factor #2: Focusing
Focusing reduces business complexity, leads to shorter processing times and to cost reductions. The decisive measures include digitalization and automation, as well as a standardized offering that is modularly aligned to the market.
Success factor #3: Professionalization
Professionalization paves the way to greater productivity and to exploiting the opportunities presented by digital transformation. The introduction of intelligent, key figure-based control systems leads to more professionalism at the strategic level.
Success factor #4: Market Orientation
Market orientation brings success and is reflected in profitability, competitiveness and innovative strength. Market-oriented strategies should be based on a holistic approach.
Success factor #5: Human Resources
Human resources as an issue require a more flexible setup. To counteract the shortage of skilled workers, companies should offer more flexible working and performance-related remuneration models. Professional recruiting can be a worthwhile investment.
Success factor #6: Raw materials management
Raw materials management is part of the mandatory program. The introduction of a professional raw materials management system helps to identify relevant market changes in good time and to cope with them successfully.
Success factor #7: Service excellence
Service excellence offers strong opportunities for growth and differentiation. Companies should give the same attention to service offerings as they do to product development.
Success factor #8: Agility
Agility increases the ability to act, productivity, turnover and efficiency. By introducing trend and change barometers, information from logistics, social and business rules can be taken into account.
Success factor #9: Digitalization
Digitalization of business processes in the packaging industry is a must. Digital technologies offer the opportunity to conquer new markets and target groups.
Success factor #10: M&A Activities
M&A activities can serve as an approach for strategic growth in the packaging industry.
Whitepaper in case of specific interest
We have also compiled the results of our study in more detail in a whitepaper, which provides examples and deeper information. You are welcome to contact us directly to obtain a free copy in English or download the whitepaper from our download portal (in German).