2024 in review
In 2024, the packaging industry returned to a sense of normalcy. With the supply chain disruption of the pandemic years in the rearview mirror, packaging volumes were generally up, with regular seasonal variability and demand. However, that does not mean there were no challenges. Corrugated cardboard costs rose due to market pressures in the pulp and paper industry. Petrochemical commodities, including plastics, saw increased prices in the second half of 2024.
Several themes stand out as we look ahead to the next twelve months. Sustainability continues to be a driving force across the value chain, with a strong desire for sustainable solutions without reducing performance or increasing cost. Overall, there is a focus on reducing the cost of packaging, which includes redesigned packages with minimal and lightweight materials to reduce carbon footprint and waste.
This post will examine the market forces heading into 2025 and the packaging industry trends that promise to shape outcomes for this year.
Outlook for 2025
Policy and regulations
Entering the first quarter of 2025, everyone will be closely watching the impact of tariffs proposed by the new Trump Administration. These tariffs could drastically impact costs as supply chains for most materials have a global reach, which means that tariffs could impact even domestic producers.
Globally, regulators are targeting packaging with legal compliance rules, such as the Extended Producer Responsibility (EPR) laws that took effect in the UK in 2024. In the U.S., seven states currently have EPR laws on the books, with six more states considering EPR bills. The universal goals for packaging regulators seem to be reducing packaging, clarifying recyclability, and ending greenwashing.
Economic outlook
2025 could be a robust period for the economy. Many analysts anticipate a significant economic boost that could invigorate various sectors, including manufacturing and packaging. With the challenges posed by COVID-19 now largely in the past, businesses can focus on growth.
While the labor market has improved, experts note that labor costs are unlikely to decrease. Many companies are exploring automation solutions that enhance productivity and minimize the need for direct labor. This technological shift can help businesses remain agile and efficient in a competitive environment.
However, the United States continues to grapple with an aging population and a diminishing influx of younger workers into the manufacturing sector. This demographic trend poses long-term implications for workforce sustainability. Despite this hurdle, the ongoing mergers and acquisitions (M&A) activity in the packaging industry suggests a dynamic landscape that may offer opportunities for growth and innovation. Over 140 packaging M&A took place in 2024, and 2025 may top that number.
Also read: Six Timesaving Tips to Increase Warehouse Efficiency
Four key packaging industry trends shaping up for 2025
With these broader market forces in mind, at Adherex, we believe the following trends will be critical in the packaging industry in 2025:
1. Sustainability
In many ways, sustainable packaging will be the primary trend of 2025, with all other packaging trends branching off from or feeding into it.
As consumer demand for environmentally responsible business practices grows, sustainability will continue to gain momentum in packaging. Returnable and reusable packaging systems will likely become more commonplace, especially in consumer-facing applications like subscription boxes. The industry continues to move away from plastics, with renewed interest in biodegradable products like paper and cardboard. We expect to see more traction in alternative materials, such as biodegradable bioplastics, but the cost may continue to be prohibitive for widespread adoption.
2. AI and automation
While AI and automation have been transformative for efficiency within manufacturing, packaging at large has yet to reap significant benefits from the AI revolution. However, in 2025, we may see this change as major players like Amazon and Walmart have begun using AI to design and refine packaging based on analytics from mountains of customer data. AI will make packaging more efficient, while automation will continue to improve warehouse and shipping operations.
3. Smart labels
Smart labels (the Internet of Packaging) utilize QR codes, RFID tags, or NFC chips to enhance customer experience. These technologies allow for better tracking capabilities and interactivity with customers. For example, customers can scan a printed-on QR code with their smartphone to learn more about how to recycle the package or the company’s sustainability efforts. Internally, businesses are leveraging these new technologies to pinpoint process friction points and enhance efficiencies.
4. Reduced packaging
In 2025, companies will continue to explore lightweight and minimal packaging to reduce their carbon footprint. Packaging reduction is part of a larger trend of frustration-free packaging driven by Amazon and other e-commerce distributors. Part of this effort involves making packages accessible and easy to open for people with disabilities.
Also read: Seven Ways Engineers Benefit from Working with a Material Specialist
Navigating 2025 with Adherex
As we approach the uncertainties of the new year, Adherex is committed to keeping you informed and equipped to navigate the packaging industry’s ever-evolving landscape. Trends come and go, but you can depend on our expertise and unwavering commitment to customer support, regardless of the challenges that may arise.
Our team is dedicated to helping your business thrive through highs and lows. We are here for you, whether you are looking for the latest market trends, innovative solutions, or reassurance during these unpredictable times.
Do you have any questions or need assistance? Contact us today for the answers and support you need. Together, we can tackle whatever the future holds.
