The year 2024 was characterised by far-reaching challenges for the packaging industry. A difficult overall economic situation, persistently high or volatile material and energy costs and increasing regulatory requirements posed considerable problems for the industry. However, in addition to these hurdles, there are also opportunities for companies that are prepared to strategically realign themselves and take innovative paths. We provide you with an overview of the most important factors and make strategic recommendations for action.
Difficult overall economic situation
In all material segments of the packaging industry – be it plastics, fibres, mechanical engineering, glass or metal – the business situation was tense in 2024. The Ifo Business Climate Index reflected this tendency and showed an overall downward trend.
Decline in food retail
A significant indicator of the general market weakness is the food retail sector, whose real turnover has fallen below the 2015 level. As a large part of the packaging industry is directly linked to this sector, the decline has a negative impact on the entire industry.
High material prices and energy uncertainty
Material prices remained at a high level or were volatile in 2024, as can be seen from price indices such as the one from Euwid. This affected packaging materials of all kinds, which drove up production costs. At the same time, energy costs remained a factor of uncertainty, making both production planning and investment decisions more difficult.
Urgent need for action on recyclability and virgin plastic
Brand owners’ self-imposed targets to improve recyclability and reduce virgin plastics have shown little progress, as the Ellen MacArthur Foundation’s 2024 report shows. Many companies face significant gaps in achieving their 2025 targets, particularly in the use of high-quality recyclates.
PPWR as compass and driver
In response to this, regulatory authorities around the world are taking ever stricter action. In Europe in particular, regulation is progressing inexorably as part of the Green Deal. The circular economy remains a key building block for the future economic success of the EU. The PPWR serves as a Europe-wide compass for change in the packaging sector by setting uniform standards and radically changing the market.
The Packaging and Packaging Waste Regulation, which was adopted in 2024, is designed to be final and binding. Companies that are not compliant risk penalties or even the loss of market authorisation for affected products or their packaging. Many conventional packaging solutions will no longer meet the new requirements in future.
Gap between current status and requirements
In view of the new and binding PPWR requirements for 2030, the gap between the current status and future targets is widening. It has become clear that the efforts made to date are not enough. There is an urgent need for fundamental changes to fulfil both the stricter regulatory requirements and the increasing market requirements.
Outlook for 2025: Increasing challenges and necessary transformation
The existing challenges are likely to persist in 2025 and possibly become even more acute. It is no longer just a question of overcoming regulatory hurdles. The entire structure of the industry is being scrutinised. Innovation, strategic realignment and market-orientated business development to acquire new customers and markets are key to surviving and thriving in an increasingly complex and demanding market environment.
Opportunities through disruption and the circular economy
Despite all the challenges, opportunities are opening up for companies that are prepared to embrace change. Regulations such as the PPWR can lead to disruptive market shifts and enable companies to differentiate themselves and tap into new growth areas.
Circular economy as potential
The circular economy is not just a compulsory exercise to fulfil compliance requirements, but also offers potential for new business models and sources of income. Companies that focus on sustainable and circular solutions now can secure competitive advantages. As these changes require a lot of lead time and significant bottlenecks are to be expected, their future advantage must be tackled without delay.
Strategic recommendations for companies
Proactively acting and adapting strategies is key to success in the challenging environment. This requires three things in particular:
- Tapping into new market segments
Dependence on existing customers with declining demand is risky. Companies should therefore systematically expand their business development, actively acquire new customers and tap into new markets to spread risks and generate new sources of revenue. A strong positioning and clear market segmentation are the decisive factors for success.
- Realising growth potential
Successful companies recognise opportunities arising from market transformation and act quickly. This requires continuous market observation and a willingness to invest in new technologies and business models.
- Adapt business models
Long-term success is not achieved through cost reductions alone. It requires flexible and sustainable business models paired with market-orientated business development in order to be able to adapt to changing market conditions. Market intelligence and agility are key components here.
Conclusion: Between crisis and opportunity – actively shaping the future
The year 2024 has presented the packaging industry with major challenges. But despite all the difficulties, there are ways to strengthen your own position and emerge stronger from the crisis. Companies that are prepared to face up to the changes and act proactively can utilise the current disruptions as an opportunity.
The coming years will be decisive. It is up to the companies themselves to decide whether they see the transformation as a threat or as an opportunity for realignment and growth. Through strategic planning, clear market segmentation focussing on market requirements and strong business development, businesses can not only master the current challenges, but also actively shape the future of the industry.
