Excitement is building at the Class VI office for Pack Expo 2025, which promises to be a special event!
I’ll be attending the Las Vegas show with a few colleagues from September 29 through October 1. We’ll experience the latest innovations in packaging and processing, attend some of the education sessions, and enjoy the conversation at networking mixers.
As always, our focus is on M&A in this space: what’s most eye-catching to private equity and strategic buyers, and how can sellers give their companies a tune-up to achieve the best transaction results?
For industry watchers, I thought I’d share a few trends and topics that are sure to dominate conversations on the show floor. I hope you enjoy—and reach out if you’d like to meet up at the expo!
Automate for excellence
Automation is a classic “spend money to make money” scenario. Investing in robotics, control systems, and engineering talent might pay off by increased production speed and efficiency.
Buyers in the packaging space will dig into metrics like changeover minutes, labor hours per shift, and scrap percentage. For the best deal, show them you’ve made strides toward improving these numbers.
Chained to supply
It’s been said many times, many ways, but supply chains need derisking in a time of tariffs. Any shifts to domestic sourcing, production, and shipping can help a packaging firm save money by reducing exposure to tariffs on foreign imports. Negotiating tariff pass-through clauses is another important tactic that allows your firm to share trade-driven costs with suppliers.
A stronger balance sheet can in turn make a better case to prospective buyers looking for profitable acquisition targets.
It’s in the contract
If you were buying a business, wouldn’t you want a guarantee of incoming revenue? Of course!
Packagers are much more appealing in the market if their model is based on contracted revenue distributed over time rather than single purchase orders. Multi-year agreements with indexation, minimum volumes, service-level credits, and termination fees trade volatility for value by granting visibility into future revenues.
Green is good
Consumer preferences have generally trended toward more sustainable packaging that uses more upcycled and recyclable materials. Significant numbers of consumers are even willing to pay more to ensure sustainable packaging, especially among Gen Z and high-income buyers.
Sustainability isn’t usually the primary factor in purchasing decisions, so leaders need to balance its importance in their branding against its impact on margins. But companies that can maintain healthy profits while marketing a more environmentally friendly product may prove attractive targets.
End-market resilience
Everyone is worried about economic turbulence, but investors are impressed by companies with a proven track record of weathering storms.
The most exciting companies can demonstrate growth despite headwinds, particularly in end markets with strong elasticity of demand. Be ready to show your 12-month revenue trend through this challenging period and the mix of products that held volume.
On with the show
The packaging space clearly faces many of the same challenges as other sectors in this environment, but I hope you can put some of these recommendations in place.
I’d love to connect, whether you’re in growth mode or eyeing a potential sale or recap. Reach out anytime to start the conversation.
Now it’s time to start packing . . . for the trip to Vegas, that is!
AUTHORED BY:
Rob Scott | CGO | Class VI Pathfinder, LLC