State of the Industry: Global Consolidation in Packaging

Of the hundreds of participants within packaging, only 10-20 percent can be categorized as "leaders." These parties are large consolidators familiar with M&A strategies who complete aggressive acquisitions and selective divestitures (purging) to optimize their global portfolio of operations. Another 10-20 percent can be categorized as "followers"—those who have rapidly lost share and have failed to adopt new competitive strategies and whose destiny is to sell at the best available price or go out of business. The remaining 60-80 percent, representing a majority of packaging companies, can be classified as "others", which are those that have no distinct strategy or plan, experience slow erosion of their market position, and may be left behind as the industry consolidates and becomes even more competitive. With 2010 representing the highest deal volume to date for the plastic and fiber packaging segments, Blaige & Company's research suggests that this significant consolidation will continue to affect all industry participants and will shape the industry's competitive landscape. As a result, owners of packaging companies will need to evolve their M&A strategies in order to maximize their value and growth potential.