貝恩：2023紙和包裝報告揭開可持續包裝的力量（英文版）（64頁）.pdf

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1、Paper&Packaging Report 2023 Unpack the power of sustainable packaging Copyright 2023 Bain&Company,Inc.All rights reserved.This work is based on secondary market research,analysis of financial information available or provided to Bain&Company and a range of interviews with industry participants.Bain&

2、Company has not independently verified any such information provided or available to Bain and makes no representation or warranty,express or implied,that such information is accurate or complete.Projected market and financial information,analyses and conclusions contained herein are based on the inf

3、ormation described above and on Bain&Companys judgment,and should not be construed as definitive forecasts or guarantees of future performance or results.The information and analysis herein does not constitute advice of any kind,is not intended to be used for investment purposes,and neither Bain&Com

4、pany nor any of its subsidiaries or their respective officers,directors,shareholders,employees or agents accept any responsibility or liability with respect to the use of or reliance on any information or analysis contained in this document.This work is copyright Bain&Company and may not be publishe

5、d,transmitted,broadcast,copied,reproduced or reprinted in whole or in part without the explicit written permission of Bain&Company.AcknowledgmentsIlkka Leppvuori,who leads Bain&Companys Global Forest Products,Paper&Packaging practice,prepared this report with help from a team cocaptained by Practice

6、 Senior Manager Jan Budde and Practice Director Catherine Safaya-James.The chapters of this report were written by Bain Partners and Expert Partners Ilkka Leppvuori,Mattia Bernardi,Jenny Davis-Peccoud,Torsten Lichtenau,Oliver Straehle,Melchior Bryant,Peter Meijer,Moritz Vielhauer,Luciana Batista,Dan

7、iela Carbinato,Magali Deryckere,Erik Nordboe,Marcos Rutigliano,Florian D.Mueller,Sambit Patra,David Waller,Pablo Cornicelli,Manuel de Soto,Andrea Isabella,Elena Recio,Jared Lapin,Jason Heinrich,and Jenny Lundqvist;Associate Partners Anders Bck and Pol Tarrag;Expert Associate Partner Stephanie Yee;Se

8、nior Manager Emma Elofsson;Consultant Kajsa Schrewelius;and Systemiq Partner Yoni Shiran.The authors wish to thank Bain Global Advanced Manufacturing&Services Executive Vice President Andy Bankert;Partners Michael Staebe,Niels Koggersbol,and Jens Hjortegaard;Expert Partner Mark Burton;Senior Associa

9、te Consultant Andreas Kroebl;Leila Kunstmann-Seik and Anna Civilini for their planning and marketing support;and Aili McConnon and Paul Judge for their editorial support.1Paper&Packaging Report 2023ContentsNavigating Turbulence in Paper and Packaging .2Full Potential Transformation in Paper and Pack

10、aging .8The Paper and Packaging Industry Faces a Biodiversity Crisis .14Which Packaging Substrates Are the Most Sustainable?.20How Paper and Packaging Companies Can Catch Up in Commercial Excellence .27Putting Sustainability to Work in Paper and Packaging .32The State of Private Equity and M&A in th

11、e Paper and Packaging Industry.39Sustainable Packaging:What Consumers Want Next from the Paper and Packaging Industry .45The Mill of the Future.562 2Navigating Turbulence in Paper and PackagingScenario planning can create a dynamic,future-proof strategy.By Jason Heinrich,Ilkka Leppvuori,and Jenny Lu

12、ndqvistAt a Glance Successful companies embrace disruption rather than fight it by focusing on the vital few uncertainties that matter.Becoming future ready,more sustainable,and reaching full potential requires a dynamic strategy.A winning strategy is good in all scenarios rather than brilliant in o

13、ne context but a failure in others.These days,chief executives in paper and packaging face extreme uncertainty,volatility,and disruption.Covid-19 caused abnormal demand patterns across many product categories.In addition,paper and packaging companies have seen record-high volatility in input costs,s

14、purred by surging energy and chemical costs,record-high inflation,and an enormous spike in overseas transport costs in 2021.New regulation is also scrambling categories,boosting some products while destroying others.Despite this acute turbulence,most companies still rely on traditional approaches to

15、 strategysuch as analyzing trends,making forecasts,and committing to a set of actions that they rigidly followbut these approaches are unfit for the high degree of instability that many companies are currently experiencing.Companies getting it right embrace uncertainty and disruption(rather than fig

16、hting it)by focusing on the vital few uncertainties that matter.These include supply and demand fluctuations,cost volatility 3Paper&Packaging Report 2023Sources:Statista;RefinitivPrice in euros per megawatt-hour,quarterly0100200300400500Natural gas,EuropeElectricity,GermanyElectricity,SpainElectrict

17、iy,SwedenQ1 2021Q2Q3 Q4Q1 2022Q2Q3Q4Figure 1:European energy price volatility increased dramatically in 2021 and 2022in energy and raw material prices,and geopolitical risks.There are also uncertainties around the impact and timing of the green transition as well as around new technologies,including

18、 artificial intelligence,smart packaging,and e-commerce penetration.Leading companies are engaging in strategy making as a continuous process that generates a dynamic plan.They are laying out the possible scenarios that could develop,taking key actions now,and preparing the organization to react in

19、a timely manner via signposts or trigger points when conditions change.A perfect stormExternal pressures and disruptions are at an all-time high,and companies cant afford to ignore uncertainty when planning and implementing strategy.Covid-19 caused demand to surge in certain product categories such

20、as the panic buying of toilet paper,and plunge in others,such as the radical drop in office paper demand as copying and printing in offices suddenly disappeared while electronic contract signing took off.As a result of the crisis in Ukraine,natural gas prices in Europe spiked from an already high 80

21、 per megawatt-hour in January 2022 to a peak of more than 300 per megawatt-hour in August,with electricity prices following suit(see Figure 1).4Paper&Packaging Report 2023Overseas transport costs more than tripled in 2021 and sustained high levels for a large part of 2022 because of the lack of sea

22、container capacity and other supply chain disruptions.Key chemicals used in the industry have skyrocketed in cost as wellfor instance,starches rose by more than 60%,and caustic soda increased by almost 200%for some customers.Regulation is also shifting growth patterns and in practice eliminating som

23、e product categories(such as plastic straws)while creating new ones(such as molded fiber for compostable salad bowls).Bans and restrictions on single-use plastics are propelling a clear shift from plastic to paper straws and lids,and they are boosting the demand of recycled content in PET(polyethyle

24、ne terephthalate)bottles.Recent proposed EU regulation aims at reducing“avoidable packaging”that is,reducing the demand of quick-service restaurant packaging and shifting from single-use tableware,for instance,to washable items,as already showcased in France.Finally,record-setting rates of inflation

25、,increasing interest rates,and the fear of a recession are additional drivers of uncertainty.Becoming future ready,more sustainable,and reaching full potential requires a dynamic plan and continuous strategy process.Scenario planningScenario planning is certainly not new,but while it used to be an a

26、cademic exercise that executives performed every few years,its now mission critical given the ever-increasing turbulence.Scenario planning begins with no-regret moves,or actions a company needs to take under any scenario.Then,it is key to identify trigger points or signposts to signal when a scenari

27、o occurs so that you can react quickly and take a new strategic direction(see Figure 2).For example,a company evaluating sustainability may determine that under any scenario it will need to create more recyclable and compostable packaging going forward in light of tightening regulations and changing

28、 consumer demand.It would start by investing in R&D to develop new forms of packaging and improve resiliency.Then,the company would plan for various scenarios that factor in possibilities such as volatile energy costs,input prices,evolving regulation,and the dollar value of potential losses should e

29、ach scenario play out.Finally,the company would track clearly defined signposts,and when signposts suggested one scenario becoming more likely,management could react quickly and adjust.The company would then use these scenarios for sensitivity analysis,meaning it could pressure test strategic decisi

30、ons and investments.For example,an investment into a new paper mill will have massively different economics depending on the expected growth of paper demand and the input costs.Having a feeling for the extreme upper and lower bounds can help identify the most promising investment across scenarios.5P

31、aper&Packaging Report 2023Source:Bain&CompanyOther variable costsCategoryPossible metrics to measure impactEnd market demand Growth in carton board demand Growth in corrugated packaging demand Decline in graphic paper demand 0 7%p.a 1%7%annually 1%10%annually Average cost of softwood in euros per cu

32、bic meter Global market pulp capacity additions(in tons)by 2030 Average cost in euros per megawatt-hour for electricity World container index(40-foot container)Price of carbon emission rights per ton Interest ratesRaw material Capital costsExamples of extreme 2030 outcomes 10 100 per cubic meter 5%3

33、0%5 500 per megawatt-hour$1,000$15,000 10 200 per ton 0 6%Figure 2:Scenario planning helps prepare for extreme outcomesSolidify new pricing and product portfolio managementHigh inflationary environments make pricing a priority for companies.Some high-performing companies choose to streamline the pro

34、duct offering and optimize the mix to mitigate supply shocks and drive growth.These companies eliminate product families and stock-keeping units(SKUs)based on complexity analytics,migrating customers to a more profitable portfolio.They reprice high-complexity SKUs for which customers are willing to

35、pay more,transform the cost structure of low-margin products,and exit product categories that arent strategic fits.Its also important to develop a strategy for passing through the fluctuating costs of raw materials.This will depend on whether your contract with suppliers is tied to market dynamics o

36、r an agreed-upon index that could be tied to global inflation or containerboard prices,for instance,or a mix of the two.Where you have negotiating power,you may need to push for higher than 100%pass-through pricing,and in other categories,you need to realize that your competitive position is such th

37、at you cant get the full pass-through price.And all this decision making needs to happen quickly in response to market circumstances.6Paper&Packaging Report 2023Build long-term customer relationshipsThe paper and packaging industry is known for long-term customer relationships,and one of the best ex

38、amples is liquid carton packaging,where there are only a few suppliers and a few customers that are already in long-term relationships.For many of the other grades,you have many more choices,and in turbulent times,customers often look for better value alternatives,leading to increased churn.Winning

39、companies in these categories,however,also invest in superior customer engagement,such as deeper collaboration in demand planning,inventory management,logistics,and new product innovation.Even packaging companies in grades with more choices for customers prioritized serving customers with long-term

40、relationships rather than chasing the highest-margin customers when prices increased rapidly in 2022.Now in 2023,those companies are reaping the benefits in terms of maintaining their customers share of wallet because those long-term customers have stuck with them.Double down on operational resilien

41、cy and traceabilityOver the past year,volatile energy prices have been the most obvious driver of uncertainty,and supply chain issues,with both input and output prices fluctuating wildly,have also played a role(see Figure 3).As a result,operational resiliency and traceability are more important than

42、 ever.Leading companies are investing in multiple sources of supply so that they are not dependent on one supplier per category.They are also thinking about their footprint strategy and regionalizing their supply chain more than they have done in the past,meaning that their subcontractors for a give

43、n region(e.g.,North American operations)would be mostly in that region.Finally,for high-volatile categories,they are using contractual terms or hedging to ensure they are protected.Strategically allocate capital expenditures,R&D,and M&A fundingDownturns are a great time to gain market share.To win,y

44、ou must invest selectively to outperform competitors.Use M&A to reshape the portfolio of businesses.For example,in 2008,Graphic Packaging acquired Altivity Packaging for$1.75 billion to create one of the largest producers of folding cartons in North America.The combined company was able to realize s

45、ignificant cost savings and operational efficiencies,improving profitability and solidifying Graphic Packagings position as a leading producer of folding cartons in North America.Its also critical to continue investing in R&D,allocating capital toward the right projects while making sure they are fl

46、exible.Stora Enso,for example,is currently investing 1 billion into converting an idle paper machine into a high-volume consumer board production line.The machine will be able to produce folding box board as well as coated unbleached kraft,which can be used in a wide range of industries,including fo

47、od and beverage packaging for frozen,chilled,dry,and fast food.7Paper&Packaging Report 2023Notes:Graphic paper refers to uncoated woodfree,coated woodfree,uncoated mechanical,coated mechanical,and newsprint;pulp refers to bleached hardwood kraftpulp,bleached softwood kraft pulp,and others;containerb

48、oard refers to kraftliner,testliner,and fluting,carton board refers to white-lined chipboard,solid bleached sulfate,folding box board,coated unbleached kraft,and food service board;price movements within the subcategories were highly similar,therefore an average across the categories was taken to co

49、nstruct the indexSources:RISI;Kunststoff Information Verlagsgesselschaft(KIVI)50100150200250300 20141516171819202122Graphic paperPulpContainerboardCarton board50100150200250300 20141516171819202122Recycled PET clearPET(polyethylene terephthalate)Prices index(starting month January 2013)Prices index(

50、starting month January 2013)Figure 3:Output prices surged in 2022Reset the cost base and prioritize automationBasic automation tools have become common in many paper and packaging companies.Modern machines can run sawmills and pulp mills with very little human oversight,and digital sales channels ca

51、n automate many sales activities.Automation cuts costs(because it reduces variability)and improves safety.With improving industrial controls and closed-loop control systems,fewer employees are needed to run highly complex paper machines.Going forward,the only certainty is uncertainty.Turbulence will

52、 most likely only increase.For this reason,winning executives are designing a strategy that is good in all scenarios rather than brilliant in one context but a failure in others.8 8Full Potential Transformation in Paper and Packaging At a Glance A full potential transformation can raise a companys p

53、rofitability,cash flow,top-line growth,and value to a completely different level.Paper and packaging companies that have achieved a full potential transformation have typical-ly doubled their EBITDA over two to five years.Successful companies embrace clear purpose,full alignment,accountability,and s

54、print-based prioritization of actions.How did Fedrigoni Paper more than double its adjusted sales and almost triple its EBITDA in just a few years?Established in 1888,the Italian family-run company has a long and storied history of producing specialty paper and self-adhesive labels.More recently,how

55、ever,Fedrigoni lost two large international banknote customers,and market dynamics shifted.In 2018,Bain Capital acquired a 90%stake in Fedrigoni for 600 million and helped the Italian company execute a full potential transformation.By building scale in existing markets,expanding its geographic scope

56、,and acquiring several Italian companies with a strong European presence,Fedrigoni became one of the top players in self-adhesive labels worldwide.It also embedded sustainability into internal operations and its day-to-day business,developing circular products such as specialty paper made of 40%to 1

57、00%recycled material as well Boosting profitability,cash flow,top-line growth,and company value.By Pablo Cornicelli,Manuel De Soto,Andrea Isabella,Ilkka Leppvuori,and Elena Recio9Paper&Packaging Report 2023as paper combining pulp and alternative fibers such as cotton,hemp,and linen.Finally,it also c

58、ut costs and optimized operational excellence.Thanks to these measures and others,investors achieved a five times return on investment with the new valuation of Fedrigoni at 3 billion.For every company that has invested at the right time and achieved game-changing operational and commercial results,

59、there have been many more that have faced declining profitability and serious balance sheet issues.Given this wide variation,CEOs and shareholders have prioritized understanding how to generate the most attractive returns and make the most out of their existing production assets.“Transformation”is u

60、sed widely in the business world,and at Bain&Company,a“full potential transformation”is the cross-functional effort to alter the financial,operational,and strategic trajectory of the business.When implemented successfully,this plan can dramatically raise the companys performance to a completely diff

61、erent level in terms of its profitability,cash flow,top-line growth,and value.This success often leads to an increased ability to make bold new investments in new production capacity and R&D.These days,such transformation plans also often include a concrete sustainability plan that outlines how to g

62、et toward lower(or ideally zero)carbon emissions within a given timeline,often through site energy-efficiency savings or investments in nonfossil fuel energy.Successful companies articulate a clear purpose and value creation plan or a roadmap to achieve their full potential transformation(see Figure

63、 1).They align fully across the organization and split bigger key initiatives into multiple shorter sprints.Executives meet regularly to ensure that performance is transparent,roadblocks are quickly cleared,and decisions are quickly made.Finally,they ensure that the best talent leads the transformat

64、ion,and they honestly evaluate where they are missing certain skills,hiring externally to fill those gaps.A full potential transformation usually consists of a five-year plan to significantly improve the EBITDA of the company.Everything on this broad agenda cannot be successfully executed at the sam

65、e time.Instead,successful companies identify and quantify the relevant ways to create value.Three different ways that top-quartile companies Bain has worked with have employed specific value levers as part of their full potential transformation include revamping their portfolio strategy,stepping up

66、their commercial and operational excellence,and improving their performance through cost transformation and next-generation sourcing.Revamping portfolio strategy:Leading companies anticipate and react to changing market demands,and they adjust their portfolio accordingly.Early lessons can be learned

67、 from paper companies that switched some years ago from declining products such as graphic paper to producing higher-demand packaging products such as carton board or containerboard.Revamping their portfolios often involved divesting or spinning off lower-demand products,closing certain paper mills

68、if they were too old or costly to convert,or transforming machines to produce the higher-demand products.Todays leaders also realize that transforming ones portfolio means accepting that they will need to close certain plants and make new investments to convert machines into growing and attractive p

69、roduct grades.Finally,leaders will upgrade the commercial organization to effectively sell the new 10Paper&Packaging Report 2023Source:Bain&Company Strategic choicesDefine and refine a winning strategy and ambitionsCost and capitalefficiencyImprove performance and sustain cost transformationOperatio

70、nal excellenceImprove operations through results-focused initiativesCommercial excellenceAccelerate growth through commercial excellenceOperating model and other key enablersEnvironmental,social,and corporate governance(ESG)key enablersEnergy and emissionsWhere to playHow to winSite and portfolio ma

71、nagement,including M&ACapital investmentsMarket and customer opportunities Product portfolio mixPricing and discount managementSalesforce effectivenessBusiness-to-business marketingCustomer experience/feedbackMaterialconsumptionWater consumption and treatmentWaste and product end of lifeEmployee hea

72、lth and safetySupplier ESG practicesOrganizational model and alignmentPeople skills,culture,and talentAgile deploymentDigitalPerformance managementFiber sourcingOther raw material sourcingWorking capital efficiencySelling,general,and administrative expense optimizationUtilization and productivityVar

73、iable cost optimizationAsset healthFootprint optimizationSales and operations planningFigure 1:Value creation levers that accelerate a full potential transformation11Paper&Packaging Report 2023products to new customers.This could entail training sales teams to sell carton board or molded fiber produ

74、cts to fast-moving consumer goods companies,retail chains,or quick-service restaurants,instead of selling graphic paper to publishers.Stepping up commercial and operational excellence:Many full-scale transformations rely on improving commercial and operational results across dozens of production sit

75、es.One packaging producer,for example,started by setting high ambitions to improve operations vs.the baseline.It began by seeking full transparency of what good looks like on a very granular level.On the operations side,supervisors tracked how workers did on key performance indicator dashboards in e

76、very plant for every shift,how the shift changeover was managed,and many other details.They did this to establish their ambition and where certain teams and plants needed to close the gap.The company brought in the equipment manufacturers(who also functioned as consultants)to share best practices an

77、d help the teams accomplish operational excellence.Finally,it connected those teams focused on operational excellence with the teams working on commercial excellence and sourcing excellence to ensure that operational excellence improvements were not,for instance,negatively impacting the commercial t

78、eam.Sourcing was looped in early on to help find which materials,recipes,and suppliers were needed to optimize product cost.Improving performance through cost transformation and next-generation sourcing:Other companies have improved their cost structure and upgraded sourcing to stay competitive and

79、drive a multiyear transformation.For one company,this included coordinating procurement for key product categories so that every single mill did not negotiate with suppliers separately,but instead,they could take advantage of volume discounts and more strategic dialogues with select suppliers.Analyz

80、ing the data enabled the company to determine a more efficient balance when choosing among the share of fiber to produce internally,to source from external suppliers,or to purchase on the open market.Big data analysis on varied performance across all products and sites helped manage demand and ident

81、ify how it could reduce the cost of chemicals and energy within its operationsfor example,through calibration of recipes and consumption in the production.As a result,this company managed to reduce costs,improve collaboration between sourcing and key business stakeholders,and upgrade the supplier ma

82、nagement and overall sourcing strategy significantly.Sourcing teams were involved early and throughout the full transformation process so as to be more cost efficient if the team were to be sought out to alter the product recipe,and they would rethink sourcing to reduce the quantity of the most expe

83、nsive ingredients,which are typically chemicals.Past Bain project experience shows that most companies undergoing a full potential transformation use several levers in parallel,with the most successful ones(especially in the private equity setting)sequentially improving in all areas(see Figure 2).Op

84、erational excellence and commercial excellence were the most commonly targeted levers and showed the highest return.All in all,companies utilizing the full set of levers were able to achieve a roughly two times EBITDA uplift,truly transforming the business in the process.12Paper&Packaging Report 202

85、3Source:Bain&CompanyAverage percentage of EBITDA uplift per leverEBITDA beforefull potentialtransformation100%Strategicchoices(volume growth)18%Commercialexcellence26%Cost/capitalefficiency(fixed costs)9%Operationalexcellence(variable costs)38%EBITDA after full potentialtransformation191%Figure 2:Im

86、proving operational excellence created the most value in past Bain-supported transformationsHow to succeed in a full potential transformationSuccessful companies begin their transformations with a diagnostic phase to establish a starting point,followed by a design phase to specify the actions and pl

87、anned impact.It is in the implementation stage,however,where the winners emerge.These companies embrace a clear purpose,the principle that talent is king,full alignment and accountability,sprint-based prioritization,performance transparency,and fast decisions.Clear purpose:The CEO articulates why th

88、e company needs to do things differently,what the world will look like if it succeeds,and the specific motivations for different roles within the organization.Perhaps the company is chronically less profitable than competitors or a new private equity owner is aiming for a successful exit in five yea

89、rs or has an ambition to achieve global leadership through M&A and consolidation.The key is that the leadership team and the broader organization feel motivated to take the journey toward that joint ambition.Talent is king:Transformations are disruptive and can lead to attrition as well as new skill

90、 requirements.Leaders identify the best talent at the firm to lead the transformation,rather than simply the employees available to do so.These top performers are freed up from other tasks so that they will be the best 13Paper&Packaging Report 2023sponsors to ensure buy-in for the transformation.Loo

91、ping in top talent before companywide communications can help them feel integrated in leading change.And diversity is reflected at every level of employmentfrom the factory line to the C-suite.Full alignment and accountability:The top team and key profit-and-loss owners embrace the approach and its

92、urgency.Every initiative has clear owners and sponsors,and the broader organization is informed of plans and regularly updated on progress through all-hands town hallstyle meetings.A clear sponsorship spine extends through all levels to ensure buy-in and help anticipate risk early on.Employees hear

93、about transformation directly from their managers,who can explain why the change is critical and how it will impact employees day-to-day work.Sprint-based prioritization:Broad transformations often cover countless different initiatives.To ensure progress,work is split up into multiple shorter sprint

94、s,without losing sight of long-term objectives.The most critical enablers and highest-value initiatives are front-loaded and operationalized within 4-to 10-week sprints,during which the working team is onboarded and key improvements are introduced.After the sprint is finished,leaders communicate res

95、ults to all relevant stakeholders and map them against long-term ambitions.Successful companies seek transparency on performance and a“red is good”mentality in tracking progress.Performance transparency:Dashboards showing progress in transformations too often tend to migrate toward showing green lig

96、hts across,whereas the real point of tracking is to identify issues and react to those quickly.Successful companies seek transparency on performance and a“red is good”mentality in tracking progress.If waste percentages at a converting plant are not dropping,for instance,or if most price increases ar

97、e leaking out,the leadership team is notified immediately.Fast decisions:During well-run transformations,executives meet weekly or biweekly to address how specific roadblocks or delays in a given workstream can be mitigated.For instance,a recipe optimization effort requires a new chemical supplier i

98、n order to succeed,or the speed calculation methods across a companys board machines need to be harmonized or the salespeople cannot charge the correct transportation costs because the data is not available on time.Quick,pragmatic decisions are made to course-correct the initiatives that are struggl

99、ing,and all employees from the C-suite to the front line accept that sometimes teams make the wrong decisions and need to course-correct.1414The Paper and Packaging Industry Faces a Biodiversity CrisisBy Emma Elofsson,Erik Nordboe,and Marcos Rutigliano Sustainable forestry practices and recycled and

100、 reused materials deliver a competitive edge.At a Glance Biodiversity loss could put$44 trillion at riskthats more than half of global GDP.More than a third of companies surveyed plan to act on protecting biodiversity within two years.Sustainable forestry practices have helped one company increase i

101、ts standing timber volume and sustainable harvesting level significantly,without increasing land use.Biodiversity loss is not only a threat to nature but also to the economy.In fact,the World Economic Forum(WEF)estimates that nature and biodiversity loss could put$44 trillion,more than half of globa

102、l GDP,at risk.And in a recent WEF survey,global risk experts rank biodiversity loss and associated environmental risks such as climate change as the most critical threats to the global economy within the next decade(see Figure 1).Nature loss is unfortunately well underway.Populations of mammals,bird

103、s,amphibians,reptiles,and fish have,on average,declined by 69%since 1970.In addition,around 1 million species globally are at risk of facing extinction.Biodiversity loss and climate change are,of course,interconnected as climate change accelerates biodiversity loss.In turn,the destruction of ecosyst

104、ems undermines natures ability to regulate greenhouse gas emissions and protect against extreme weather,thus speeding up climate change and increasing vulnerability to it.15Paper&Packaging Report 2023Global risks ranked by severity over the short and long term12345678910Failure to mitigate climate c

105、hangeFailure of climate change adaptationLarge-scale involuntary migrationNatural disasters and extreme weather eventsWidespread cybercrime and cyber insecurityNatural resource crisesErosion of social cohesion and societal polarizationLarge-scale environmental damage incidentsGeo-economic confrontat

106、ionBiodiversity loss and ecosystem collapseSource:World Economic Forum Global Risks Perception Survey,20222023Figure 1:Biodiversity loss is seen as one of the most severe global risksCompanies choosing to act now are poised to benefit.Leading companies are reducing their exposure to biodiversity-rel

107、ated risks and brand risk as well.Early movers realize that biodiversity is not just a risk to be managed but also an opportunity to gain competitive advantage.Leaders are using sustainable forestry practices and increasing the share of recycled and reused materials to appeal to customers who are in

108、creasingly concerned about reducing their biodiversity impact on the supply chain.Others are developing innovative packaging that enables them to target new markets with a lower carbon and biodiversity footprint.Paper and packaging perpetuate some severe issues driving biodiversity lossPaper and pac

109、kaging companies contribute heavily to biodiversity loss through unsustainable forestry management in their supply chain and specifically through their use of forestry resources as raw materials.For example,large-scale clear cutting is a particularly unsustainable forestry practice,and in Sweden,97%

110、of final tree felling is clear cutting and much of this is on large plots measuring greater than 10 hectares.The paper and packaging industry also impacts biodiversity with water use.Water is used to soak pulp before producing paper,and pulp,paper,and final packaging production create air,water,and

111、soil pollution.Packaging companies not directly involved in forestry still contribute to upstream biodiversity loss through their supply chain and downstream biodiversity loss through consumer consumption.16Paper&Packaging Report 2023Only a minority of paper and packaging companies are taking the is

112、sue seriously and acting on biodiversity loss today.Of a global sample of about 100 paper and packaging companies disclosing to the CDP(and therefore biased toward action),only 22%reported assessing their value chain impact on biodiversity and only 31%reported taking any action to progress on biodiv

113、ersity-related commitments.On the positive side,however,about 45%of respondents are planning to begin assessing their biodiversity impact within the next two years and 35%are planning to act.Part of the challenge is that most companies have tackling climate change and reducing emissions as their hig

114、hest priority,so biodiversity competes with climate when it comes to management attention and resources.So far,regulations,investor pressures,and incentives are less developed for biodiversity compared with those established for emissions,which can make it seem less urgent despite the acute need.Mos

115、t companies are following forest certification schemes such as those created by the Forest Stewardship Council and the Programme for the Endorsement of Forest Certification.These certificate programs are good,but they are not enough overall.These certificates can be used as a base,and then companies

116、 need to consider their unique conditions,tailor their approach,and do more.Only 31%of companies surveyed are acting now to address biodiversity loss,but 45%said that they plan to begin assessing their biodiversity loss within two years.Regulation is beginning to emerge,but it lags behind other area

117、s of climate changeNew biodiversity legislation,regulations,and reporting standards are currently under development,and,when finalized,they are expected to pressure companies to do more to prevent biodiversity loss.National governments adopted the new post-2020 global biodiversity framework at the U

118、N Convention on Biological Diversitys December 2022 COP15 event in Montreal,setting 23 biodiversity targets to be achieved by 2030.This agreement includes the overall committment to conserve 30%of the planets lands and oceans and to restore at least 30%of degraded land and ocean ecosystems.In the EU

119、,the European Green Deal includes commitments to legally protect at least 30%of the EUs land and seas by 2030(and to strictly protect at least 10%).The US has committed to conserving at least 30%of US lands and waters by 2030,as well as establishing the America the Beautiful Challenge,a$1 billion pu

120、blic-private partnership that supports ecosystem restoration projects that invest in watershed restoration,resilience,equitable access to nature,and collaborative conservation.Ultimately,goals and commitments around the world need to become regulations and legislation to help speed up responses from

121、 companies to protect biodiversity.17Paper&Packaging Report 2023Managing risk and capturing the business potential of biodiversityLeading companies are using sustainable forestry practices to improve biodiversity and gain a competitive edge.Below are two examples of different sustainable forestry st

122、rategies in two different regions of the world.Europe:In 2020,SCA developed an intiative to increase its conservation measures.It defined critical habitat categories required to retain 203 threatened species on those lands.It used this data to inform which areas should be set aside and not harvested

123、,how to adapt harvesting methods to protect the habitats,and which other small-scale conservation methods can be used.As of December 2022,the company has set aside more than 160,000 hectares of its productive forest land for the purpose of promoting biodiversity.In addition,the company conducts acti

124、ve measures to promote species survival,such as prescribed burning or creating dead wood,benefiting both local biodiversity as well as the company.These efforts reduce risks from climate change or pests,creating a more stable and resilient forest as well as higher diversity of raw materials for new

125、product innovation.The increased focus on biodiversity is not expected to affect forest productivity negatively.In fact,SCA has managed to increase its standing timber volume and sustainable harvesting level significantly,aiming to further increase harvesting from 4.3 million msub(a measurement unit

126、 for form-adjusted solid log volume)in 2010 to 5.4 million msub in 2025.South America:Brazilian paper and pulp company Suzano has committed to connecting half a million hectares of fragmented forests in Brazil by 2030.This will reconnect 1,850 fragmented pieces of land,allowing plant and animal spec

127、ies to extend their habitat and increase genetic variability.Adjusting products and supply chainsLeading paper and packaging companies are innovating products to use more sustainable raw materials and optimizing supply chains to protect biodiversity.Many companies are developing innovative packaging

128、 solutions to meet new requirements.New EU regulations on deforestation-free products,for instance,will require companies selling wood products or rubber to prove that they are deforestation-free and legal,covering the global supply chain.Measures such as these will change the market dynamics and cr

129、eate financial incentives to find solutions that address these areas because products that dont meet these tighter regulations will increase a companys costs through taxation and penalties.By increasing awareness and involvement in developing policies,companies are better prepared to handle upcoming

130、 regulation.Other paper and packaging companies are looking to biodiversity leaders in other industries for strategies regarding how to manage biodiversity in their supply chain when they dont produce the raw materials themselves.For instance,in order to improve biodiversity in its wool and cotton v

131、alue chain,Swedish clothing retailer H&M is working with farmers in India to safeguard wildlife corridors and buffer zones,implement regenerative practices,and support access to markets for regenerative raw materials.18Paper&Packaging Report 2023Source:Bain&CompanySet bold ambitionGet startedLonger-

132、term actionsScanSelect21Scale3Transform4Micro-battles and quick winsPreparation for disclosure Map sector-wide/companywide biodiversity impact to create a baseline diagnostic and identify best practices Collaborate with stake-holders to identify current needs and opportunities Combine the current st

133、ate with future scenarios to move toward a nature-positive business model Define goals and targets based on future scenarios and potential financial upside Identify where to play and how to win to capture biodiversity value potential and prioritize spheres of influence Mobilize to execute on identif

134、ied transitions Execute transitions and setting the organization up for scaling by having the right enablers in place Work with stakeholders to limit impact of pressures and leverage businessopportunities(e.g.,regulators,municipalities,investors,consumers)Design a flexible roadmap in waves and stepp

135、ing-stones Identify micro-battles to accelerate results and learnings through prioritized no-regret moves Engage leadership team and organization in changeFigure 2:A strategic approach to safeguarding biodiversityReducing exposure to biodiversity-related risksAs a result of using sustainable forestr

136、y practices and sourcing from more resilient fibers,companies are reducing their biodiversity-related risks,including physical risks and reputational risks.The danger of ignoring physical risks is that forests become less resilient,which can push up input prices,contribute to raw material shortages,

137、and reduce resilience to outbreaks.Planting nondiverse forests,increasing temperatures,and droughts contribute to biodiversity loss as they drive increases in beetle populationssuch as the bark beetle,for example,which is a severe threat to coniferous forests.A strategic approach to safeguarding bio

138、diversityA structured approach can help businesses define their biodiversity strategy.This approach consists of four steps(see Figure 2).Scan:Map sector-wide and companywide biodiversity impact,both directly and through the value chain,and benchmark with current efforts.It is also important to colla

139、borate with stakeholders to identify current needs and opportunities.While it is currently challenging to measure biodiversity impact in as clear a manner as carbon dioxide,for instance,some existing tools for assessing biodi-19Paper&Packaging Report 2023versity impact can be useful to help companie

140、s create a baseline and assess their impact.WWFs new Biodiversity Risk Filter tool,for instance,helps corporations and financial institutions assess the biodiversity risks and opportunities within their operations and value chains.In general,there is scope for a lot more collaboration along the enti

141、re value chain.Select:Define goals and targets based on future scenarios and potential financial upside,identify where and how to capture biodiversity value potential,and mobilize to execute on identified transitions.Existing frameworks such as the WWFs biodiversity stewardship approach can be used

142、to set targets and track results,map biodiversity ambitions amid broader sustainability efforts to ensure that they reinforce one another,and communicate results to all stakeholders.For example,retail chain Coop has developed and introduced a sustainability declaration that presents a products susta

143、inability footprint to customers.Sustainability is assessed through 10 areas,including biodiversity.Technical development and digitalization will enable completely new and innovative solutions such as developing digital twins for forests.These digital replicas of entire forests will help model diffe

144、rent biodiversity scenarios based on various external scenarios(such as different weather conditions)and specific measures taken by given companies.In turn,it will be possible to connect these digital twins to specific biodiversity key performance indicators.Scale:Get started on executing transition

145、s,and set the organization up for scaling by having the right enablers in place.Work with stakeholders such as regulators,investors,and consumers to limit pressures,leverage business opportunities,and design a flexible roadmap.Making the business case for biodiversity will help scale.For instance,in

146、ternal carbon pricing is set to help mitigate the impact of climate change.The same should be done for biodiversity.Leaders are aiming to develop climate-and biodiversity-positive products.And now that there are consumers and brand owners who are ready to join,these pilots could be tested in cosmeti

147、cs and luxury products packaging,for instance.Transform:Take longer-term action by identifying micro-battles(smaller pilot projects)to accelerate results.Completely new capabilitiesthat is,new competence,new structure,and new processeswill be required to make the change happen.Management needs to ow

148、n and implement biodiversity rather than outsource it to sustainability specialists.Finally,the total value chain needs to join the effort and not simply outsource this piece to the next participant in the value chain.Ultimately,executives can take a page from their overarching sustainability strate

149、gy and create bold targets,such as being biodiversity positive or nature positive by 2030,and then create a roadmap and adjust it based on continuous learning.2020Which Packaging Substrates Are the Most Sustainable?By Melchior Bryant,Emma Elofsson,Ilkka Leppvuori,Peter Meijer,and Moritz VielhauerGeo

150、graphy,regulations,and consumer preferences all impact substrate selection.At a Glance Leading companies account for the full life cycle of substratesfrom the raw materials that go into packaging design to end-of-life disposal.Companies configure their end-to-end sustainability strategy by product,g

151、eographic location,and associated regulations.Rigid paper packaging growth rates may surpass plastic packaging growth rates by 2026.Four packaging CEOs meet at a sustainability conference,each representing a different substrate.“My products are more sustainable than yours,”starts the paper packaging

152、 CEO.“Fiber-based packaging is the only compostable substrate,and it degrades faster than other alternatives.”The plastic packaging company CEO responds immediately,“My products are more sustainable than yours.Plastic packaging has a very low carbon footprint,and it is increasingly becoming recyclab

153、le.”The glass packaging company CEO cannot hold back:“You talk about recyclability,but my products are actually recycled,without downcycling.Plus,you can reuse them,cutting down the footprint even further.”21Paper&Packaging Report 2023Note:Other includes other packaging and flexible foil packagingSo

154、urces:Smithers(2021);Bain analysisGlobal packaging market size evolution by substrate,20122026(in billions of US dollars)2012839201583320189372021(33%)(2%)(16%)(4%)(12%)(7%)(21%)1,0152026(35%)(2%)(17%)(4%)(12%)(6%)(21%)1,2302%1%3%01%1%3%2%5%2%4%2%2%3%4%4%Rigid paperFlexible paperFlexible plasticFore

155、cast GlassMetalOtherRigid plasticCompound annualgrowth rates 201221202126Figure 1:Growth rates of different substratesFinally,the metal packaging company CEO chips in,too:“My products are fully recycled,without downcycling,and metal cans are much more lightweight than glass,resulting in lower carbon

156、 emissions when transported.”While the anecdote above is imaginary,the arguments about which products are the most sustainable are all very real.Whereas companies historically considered cost,functionality,and consumer experience as they determined which substrate to use for a given product,now sust

157、ainability is top of mind for everyone from regulators to consumers to the C-suite.In this early moment of transformation,however,there is no clear winner(see Figure 1).Even though some substrates such as rigid paper may have an edge,its too early to tell.And across geographies,there is still not a

158、shared understanding of what is necessarily the preferred or most sustainable type of packaging.What is clear,however,is that packaging producers must proactively focus the discussion around substitution and provide solutions to consumer packaged goods(CPG)companies,retailers,and consumersor they ri

159、sk being unpleasantly surprised by their customers choices.22Paper&Packaging Report 2023Leading companies are assessing the environmental impact of different substrates and taking the full life cycle into accountfrom resource extraction and production to transportation and products end of life.They

160、employ a proactive strategy that considers packaging design,collection and recycling,and the regional regulations regarding each of their products.They communicate early and clearly with regulators and their customers.They also appreciate that CPGs are striking a balance between environmental benefi

161、ts and making their offerings more premium,meaning they will use what drives more rotation on the shelves and what allows them to charge more for the same product.Stakeholders demand sustainabilityExecutives are feeling the pressure from every angle to improve sustainabilitywhether thats decreasing

162、their carbon footprint,using more bio-based materials,or ensuring that their production is pollution free.Regulators are pushing toward more circular products,meaning products that can be reused or that are created with a plan for how they will be recycled into something else after their first use.T

163、he EU is ahead of other regions regarding sustainability as it has introduced bans on certain substrates as well as effective recycling and reuse targets for others.For example,in November 2022,regulation was proposed in the EU to achieve climate neutrality by 2050 and to ensure that all packaging i

164、n EU markets is graded on recyclability,with greater than 70%of packaging assessed recyclable by 2030.In 2023,researchers found that there are more than 170 trillion pieces of plastic in the oceans,or more than 21,000 plastic pieces for each of the 8 billion residents of Earth.Consumers are also inc

165、reasingly demanding sustainable products as greater media and non-governmental organization scrutiny is raising general awareness regarding the environmental impact of plastic packaging.In 2023,researchers found that there are more than 170 trillion pieces of plastic in the oceans,or more than 21,00

166、0 plastic pieces for each of the 8 billion residents of Earth.While consumers are increasingly concerned,at the same time,many customers have limited willingness to pay and a poor understanding of the real environmental performance of products.For example,according to a 2022 Bain survey of nearly 4,

167、000 US consumers,70%of consumers believe single-use glass has a lower carbon footprint than single-use plastic,while only 12%guessed it was plasticthe correct answer.23Paper&Packaging Report 2023Retailers are responding.Most consumer product companies have publicly announced sustainability commitmen

168、ts,though brand owners still do not have a clear view on which substrates they prefer across different applications.Many companies have focused on replacing virgin plastics and increasing recyclability and reusability for plastics in compliance with the Ellen MacArthur Foundation Global Commitment 2

169、022 initiative.Some targets cover all packaging substrates,such as Nestl,which aims to make 100%of its packaging recyclable or reusable by 2025.Other companies are making clear commitments about eliminating one type of substrate,typically plastics.Apple,for instance,is planning to eliminate all plas

170、tic packaging by 2025.To meet the varied demands of their multiple stakeholders,leading companies are setting the foundation for their sustainability strategy by first analyzing the key environmental properties for each of their products throughout their life cycle,from production to transport to en

171、d-of-life disposal(see Figure 2).Paper and packaging executives are asking themselves the following questions:Who are the customers and end consumers for each product in our portfolio?How will the product be used?How will it be disposed of?Which role do we play in our customers value chain?Certain s

172、ubstrates may score very well on one dimension but badly on another,so which dimension is more important to us?Sources:Smithers;Wrap(2010);Bain analysisEnvironmental propertiesRigid plasticsFlexibleplasticsRigidpaperFlexible paperMetalGlassCarbon emissions(production)CO2e(in grams per unit,virgin pr

173、oduction)Carbon emissions(transport)Circularity(recyclability,recycling rate,recycled content)Bio-based materialCompostability/biodegradabilityLowestperformanceBestperformance3040152525351020100200220230Figure 2:Substrates have different characteristics that need to be factored in when assessing the

174、 environmental properties of a specific application24Paper&Packaging Report 2023Source:Bain&CompanyPackaging design choicesSubstrate usedRaw materials:recycled,renewable,or bio-basedRecyclability:actual recycling rate,downcycling vs.true circularity,biodegradabilityCollection and recycling choicesUs

175、e of public vs.proprietary raw material streamsPartnerships with value chain playersInvestments in own collection and recycling infrastructure(including M&A)Rollout and implementationRegional prioritizationProduct portfolio prioritizationR&D roadmap prioritizationCommunication with regulators and cu

176、stomersEngagement with regulatorsEngagement in industry associationsPublic and consumer educationSustainability-focused marketingResultsCO2 reductionWaste reductionRecycling/circularity quotasFinancial impactSubstrate strategies are also tailored to specific geographies and local regulationsFigure 3

177、:Consider end-to-end choices from raw materials that go into packaging design to tracking final resultsWith answers to these questions,it becomes possible to identify the key environmental criteria of your customers,such as is it more urgent to act on carbon emissions or recyclability or recycled co

178、ntent?Retailers are increasingly stating targets for specific packaging substrates in their sustainability guidelines.For example,Walmart classifies the recyclability of different packaging substrates and formats in its internal guidelines,expecting its suppliers to change unrecyclable packaging to

179、more recyclable versions.Unrecyclable packaging as defined by Walmart includes bags made from multiple materials,polystyrene/polyvinyl chloride bottles,or paper-based containers with metal tops or bottoms.After identifying the key environmental criteria for customers,leaders can prioritize segments

180、where they have the highest external pressure to act.For example,one of the larger paper manufacturers has identified substituting paper for plastic as a key priority for its end customers,so the company has started creating new products that help its customers transition to paper-based packaging.Ho

181、w to incorporate substrate substitution into your sustainability strategyWith the key environmental criteria established,and the priority segments selected,companies can design their sustainability strategy,which typically includes developing clear sustainability and substrate ambitions,starting wit

182、h packaging design,considering collection and recycling,and communicating with regulators and customers(see Figure 3).25Paper&Packaging Report 2023Develop clear sustainability and substrate ambitions.Adopt an end-to-end,upstream-downstream perspective.This perspective considers every stepfrom where

183、to source sustainable raw materials to how to meet market and regulatory demands as well as factoring in what customers want.Your goals should differ per region given regulations and your customers sustainability focus in that geography.As a result,what you optimize for will vary based on region.An

184、end-to-end,upstream-downstream perspective considers every stepfrom where to source sustainable raw materials to how to meet market and regulatory demands as well as factoring in what customers want.Start with packaging design.Leading companies design their packaging with expected substitution press

185、ures in mind.They constantly seek to improve their own product to meet external requirements by optimizing the total environmental impact and incorporating a higher input of recycled materials.Frozen food company Frosta,for example,introduced an innovative new packaging format made of 100%compostabl

186、e paper instead of plastic.At the same time,some companies are experimenting with up to 100%plant-based plastic bottles.Finnish company Sulapac makes a biodegradable,moldable alternative to plastic that can be used for a variety of items,including cosmetics containers(such as perfume jars)and drinki

187、ng straws.Collaborating with other players in the value chain can optimize solutions.For example,a packaging converter could partner with a carton producer to create packaging with higher recycled fiber input,better recyclability,and lower environmental impact.Consider collection and recycling.Up un

188、til recently,recycling has often been managed by governments or specialized organizations.Companies are increasingly recognizing that without proper recycling solutions,many substrates fall behind in the ranking of sustainability.CPGs and retailers can leverage recycling to secure valuable raw mater

189、ials,such as recycled PET(polyethylene terephthalate),especially as post-consumer recycled raw materials have recently become dear.For example,Schwarz Gruppe(the parent company of Lidl and one of Europes largest retailers)founded PreZero in 2018 to enter the waste management and recycling business,p

190、roviding access to in-demand recycled substrates.26Paper&Packaging Report 2023In June 2023,a new recycling line for post-consumer beverage cartons,backed by Tetra Pak and Stora Enso,started operations in Poland.Set to serve as one of Europes main recycling hubs,this line will triple the countrys rec

191、ycling capacityand it has the potential to recycle the entire volume of beverage cartons sold in Poland,with additional volumes coming from neighboring countries such as Hungary,Slovakia,and the Czech Republic.The facility is solely meant to handle beverage carton material separation,with the recycl

192、ed fibers being used for new paper-based packaging materials.This will be complemented by other solutions to recycle polymers and aluminum into other end applications such as pellets and crates.Communicate with regulators and customers.Engage with regulators and industry associations to understand w

193、hich regulation is likely to influence your business going forward,how you can react early on to optimize your position,and how you can influence upcoming regulation.Communicate your selling points to the consumer.While producers and converters typically have limited direct touchpoints with consumer

194、s,its the consumer who in the end makes the purchasing decisions.Since consumers are not always great at making sustainability decisions,actively educate them and communicate the benefits you and your substrate offer to enable them to make informed decisions.Every company is upping their sustainabil

195、ity game,so whether a CEO decides to lead and take market share or follow,they will be scrutinized,and their work in this area cannot just be marketing or greenwashing.After rolling out and implementing ones substrate substitution plan,it is equally important to track and share results and adjust th

196、e plan accordingly.Every company is upping their sustainability game,so whether a CEO decides to lead and take market share or follow,they will be scrutinized,and their work in this area cannot just be marketing or greenwashing.For those investing in this area,extra due diligence is required as ever

197、y substrate will claim to be the most sustainable.To determine the best bet,investors will need to dig deeper and determine which substrate is winning for each specific application and geography(where specific regulations play a large role).Winning companies are approaching their substrate strategy

198、from an end-to-end perspective,from considering the raw materials that go into the packaging design all the way to the end-of-life disposal of their substrate.This end-to-end strategy is also configured based on each ones geographic location and its associated regulations.2727How Paper and Packaging

199、 Companies Can Catch Up in Commercial ExcellenceTarget new growth opportunities and optimize price to turbocharge performance.By Anders Bck,Manuel de Soto,Pol Tarrag,and Stephanie Yee At a Glance Paper and packaging companies lag behind other industrial goods and services companies in terms of their

200、 commercial excellence.Commercial excellence includes the design and delivery of commercial best practices that maximize profitable revenue.Paper and packaging companies that prioritize commercial excellence can increase their EBITDA by 25%to 40%.Paper and packaging companies consistently show worse

201、 performance in one critical dimension parable industrial goods and services companies:commercial excellence.By commercial excellence,we mean the design and delivery of commercial best practices that maximize profitable revenue.These could include programs to consistently improve salesforce effectiv

202、eness,the view into market opportunity and customer segmentation,route-to-market design,customer experience,commercial operations and enablement,and pricing(see Figure 1).While historically many companies have focused on optimizing their production costs because of capacity constraints,leading compa

203、nies now realize that deploying a tailored set of business-to-business commercial excellence best practices can present an opportunity to grow and gain a competitive edge.28Paper&Packaging Report 2023Note:Benchmark consists of industry peer group of industrial goods and services companiesSource:Bain

204、 Commercial Excellence X-Ray survey(results of select paper and packaging companies)12345Bain Commercial Excellence X-Ray,average score by capability(Scale:1=significant gap to best practice levels;5=operating at best practice levels)Marketopportunity andsegmentationRoute-to-market designSalesdeploy

205、mentAccount,territory,andchannelmanagementSalesforcemanagementBusiness-to-business(B2B)marketingB2BpricingCommercialoperations andenablementCommercialoperating modelOfferingdesign andmanagementB2Bcustomerexperience Paper and packaging sample rangeAverage across industrial companiesIn our experience,

206、commercial excellence winners outgrow their markets by 1.5x to 2x and typically have a 200-to 400-basis-point margin advantage from favorable price realization and mix Sales deploymentMarket opportunity and segmentationRoute-to-market designAccount,territory,andchannel managementSalesforcemanagement

207、Quantifying total spending by customer,product,and geography to identify growth opportunityMaking strategic design choices by customer segment(e.g.,direct or indirect,inside or direct)Setting specific sales resource levels for each role,territory design,and account coverageDefining a process to set

208、an account ambition and actions to achieve full potentialGetting the most out of your salesforce through incentives,development,and coachingGenerating demand through outbound and inbound activitiesDriving margin uplift through pricing strategy and price setting or price gettingInstalling critical ba

209、ck-office support(e.g.,frontline training,analytics)Designing an organization or ways of working to ensure effective collaborationDesigning a customer experience that creates customer advocatesDelivering differentiated customer value across products and offeringsBusiness-to-business(B2B)marketingB2B

210、 pricingCommercialoperations andenablement Commercialoperating modelOffering designandmanagementB2B customerexperienceFigure 1:Paper and packaging performs below the industry average on most commercial excellence elements29Paper&Packaging Report 2023In fact,companies that prioritize commercial excel

211、lence can increase their EBITDA by 25%to 40%.Achieving commercial excellence starts with understanding profitability with customers and products as well as where there is opportunity to grow.After gaining greater transparency on growth opportunities,forward-thinking companies have zoned in on optimi

212、zing price and discount levels,enabled by sales and operations processes.There are many elements of commercial excellence,but top firms have found that tackling these first has had the greatest impact.Questions leading paper and packaging companies are askingDo we have a robust view of customer,prod

213、uct,geography,and channel profitability?Many paper and packaging companies currently lack a robust view of profitability.Sales teams know directionally which business segments are attractive,but they do not have a clear understanding of true net margins on a granular level.These margins are often ob

214、scured by complexity or lack of data.Transparency creates clarity into where value is created or destroyed in a company and enables a company to answer key questions such as which customers should I prioritize,which products are most profitable,and which should I deprioritize?Transparency by itself,

215、however,does not solve everything.Instead,it brings clarity into where value is created or destroyed in a company and enables a company to answer key questions such as which customers should I prioritize,which products are most profitable,and which should I deprioritize?For example,Bain worked with

216、a leading European paper and packaging company to help it understand true profitability on a product and customer basis to inform the future portfolio it wanted to have.To do so,the company created a list of low-performing stock-keeping units in its portfolio that it deprioritized in sales and opera

217、tions.This not only created insights to support long-term portfolio strategy but also drove a list of quick wins for the organization,which included creating a list of unprofitable customers and corresponding pricing actions to take with sales teams.Where is the market opportunity,and how do I win?M

218、any paper and packaging companies do not understand how much share of wallet or business they could capture with existing customers,and they dont have a comprehensive list of new customers to go after.30Paper&Packaging Report 2023Successful companies start with a granular view of customer potential

219、and prospects by focusing on geographic regions so that the salesforce has a list of very specific growth opportunities to go after.Once the company has a clear view into growth opportunities,it can determine if it has the right value proposition to win.When a plastic packaging company,for instance,

220、aspired to accelerate profitable organic growth,it found that with its top 20 customers,the company had a low share of wallet and a low Net Promoter Scoresm,which measures the likelihood that a customer would recommend that company to a friend or colleague.The customers feedback provided clear instr

221、uctions on what the company needed to do to grow with existing customers.Specifically,customers wanted better service,such as better availability of popular products and shorter lead times,as well as competitive prices for high-quality products.Based on this input,the company created action plans fo

222、r each of its top 20 customers:The company identified specific volumes to pursue at the right price,articulated the value proposition more clearly(including its unique approach to service and quality),and defined specific action steps with clear owners to win new volumes.Do we actively manage price

223、and discount levels?The legacy model of a stable price list that changes once per year with discounts based on outdated data and assumptions no longer works.In the current volatile environment,with supply chain disruptions,drastic changes in input and labor costs,and other destabilizing macro factor

224、s(market and economic),companies need to invest in pricing agility so that,for instance,prices can be adjusted if input costs change.In addition,companies often experience price and revenue leakage from overly discounting or not getting value on the services they are providing,such as not charging f

225、or rush delivery.Finally,discount levels also often vary widely across customers and are typically based on a perpetuation of historic discounts rather than strategic decisions by the company that generate returns on investment.Winning companies manage pricing proactively,adjusting it regularly and

226、setting prices based on the value to the customer and their willingness to pay.Price floors need to be set to cover the cost.Price ceilings should be set based on what clients are willing to pay for the products.Top teams are starting to establish dedicated pricing teams that build and execute on ke

227、y pricing capabilities to ensure that they are accurately setting prices at a regular cadence to match changing market dynamics.They also improve price realization through a disciplined approach to discount management,ensuring that they have the right people,processes,and tools in place to do this w

228、ell.Digital pricing tools,for example,can provide sales with pricing guidance.This guidance can identify target margins for sales reps to hit and define a price floor below which no sales should be made.Plotting customers by realized price and size can help identify where a company may be discountin

229、g too heavily.31Paper&Packaging Report 2023To tackle underperforming customers,developing a targeted approach based on customer size and profitability is key.This approach could include increasing prices,decreasing the cost to serve,or changing the product mixall of which aim to increase profitabili

230、ty.Do we have a robust sales and operations planning process?As a final step,after identifying their most profitable customers and products,leading companies ensure that their sales and operations planning(S&OP)process prioritizes selling and producing those products for those customers,and they all

231、ot their capacity accordingly.An efficient and robust S&OP process will not only save costs on logistics and improve operational efficiency through production cycle optimization and capacity balance,but it also will help manage working capital through optimized inventory levels and lead to higher cu

232、stomer profitability through an optimized customer mix.At a minimum,companies need good data quality;standard S&OP reporting,including stock levels,sales,and production volumes;clearly highlighted shortfalls;and regularly scheduled and structured S&OP meetings.Those companies that differentiate them

233、selves often leverage additional tools.For example,a large paper and packaging company used its recently introduced pricing tools to generate insights for its S&OP discussions,calculating whether increased price levels in currently unserved markets would enable profitably selling spot quantities to

234、these markets,forecasting expected future price levels given expected raw materials price changes,or helping to fill unsold machine capacity at a positive gross margin during times of reduced demand.Commercial excellence and pricing provide a huge opportunity to companies to increase their EBITDA.Ga

235、ining visibility into true profitability and market opportunity is key to deploying commercial muscle toward segments and customers with the most attractive growth.Finally,tools that allow for agile pricing and a robust S&OP process are critical for capturing value.The roadmap alone,however,is not e

236、nough.Developing a culture of commercial excellence that fosters the right set of behaviors through coaching and supported by tools and processes will help embed the gains for the long run.Net Promoter,NPS,NPS Prism,and the NPS-related emoticons are registered trademarks and Net Promoter Scoresm,NPS

237、xsm,and Net Promoter Systemsm are service marks of Bain&Company,Inc.,NICE Systems,Inc.,and Fred Reichheld.Consumer Elements of Value is a registered trademark of Bain&Company,Inc.3232Putting Sustainability to Work in Paper and PackagingReduce energy costs and spur organic growth.By Mattia Bernardi,J

238、enny Davis-Peccoud,Torsten Lichtenau,and Oliver StraehleAt a Glance The World Bank predicts that,without drastic actions,global waste will increase by 70%through 2050.A sound sustainability strategy can reduce material use and energy costs and spur organic growth.Sustainability can contribute 4 to 6

239、 percentage points to EBITDA through cost savings and revenue growth.The pressure on paper and packaging executives to become more environmentally friendly has never been higher.The industry generates a significant amount of carbon emissions because producing paper and packaging is energy intensive

240、and requires high amounts of raw materials and water.At the same time,paper is a core input for a huge range of products,packaging protects goods during transport and sale,and it increases the shelf life of perishable products.While,historically,executives have viewed sustainability initiatives as a

241、n extra expense to shoulder,leading companies realize that a decarbonization and sustainability agenda can,in fact,create economic value.Specifically,a sound sustainability strategy can reduce energy costs and increase access to recycled or renewable raw materials at a competitive cost.It can also h

242、elp spur organic growth and price realization,not to mention the fact that many leaders and employees think that its simply the right thing to do.33Paper&Packaging Report 2023In sum,leading companies realize that this pressure to address emissions,raw materials,biodiversity,and waste impacts also pr

243、esents an opportunity.Sustainability has already become a license to operate and critical to create value along several dimensions.Successful companies follow a clear playbook that includes setting a sustainability ambition,creating value through cost savings and commercial growth,and embedding sust

244、ainability in the organization for continuous improvement.Under scrutiny for sustainabilityThe paper and packaging industry is broadly exposed to sustainability issues for several reasons.Producing paper,glass,and metal uses a very large amount of energy.In addition,the production of many substrates

245、,such as plastic and aluminum,generates large amounts of greenhouse gases and some toxic emissions.Finally,much of the plastic,metal,glass,and paper packaging that gets created and sold to retailers ultimately ends up as litter from consumers on land and in the sea.The Organisation for Economic Co-o

246、peration and Development estimates that around 80 million tons of plastic waste are mismanaged per year.Packaging converters are typically less energy intensive but nonetheless produce waste that can ultimately be mismanaged.Plastic waste is continuously increasing and ending up in the environment.I

247、n fact,the Organisation for Economic Co-operation and Development estimates that around 80 million tons of plastic waste are mismanaged per year.Paper and packaging companies have started to address sustainability,but most can do much more.While the number of companies in the industry that have veri

248、fied or committed to science-based targets has rapidly increased from 5 companies in 2019 to 164 in 2022,more than 30%of those companies have missed their near-term Scope 1 and Scope 2 targetsand even more are missing their Scope 3 targets(see Figure 1).Pressure from all sidesIn light of overflowing

249、 landfills and oceans littered with plastic waste,companies are under growing scrutiny by consumers to develop more sustainable packaging solutions.Without taking drastic actions,the World Bank predicts that global waste will increase by 70%through 2050.In Europe,71%of consumers claim they want to b

250、uy sustainable products.In the US,71%of consumers claim they want to buy products with as little packaging as possible.34Paper&Packaging Report 2023Note:Share of companies on track to achieve near-term targets data includes only absolute targets and targets expiring in 2030 or beforeSources:SBTi;CDP

251、Paper and packaging companies setting or committing to science-based targetsShare of companies on track to achieve near-term targets2019Scope 1 and 266%3%31%80On track or aheadSlightly behind track(Within 80%to 100%of targets)Behind track(Below 80%of targets)Scope 359%41%272022 saw a nearly 500%incr

252、ease in company participation52020122021342022164H1 2023223Figure 1:Paper and packaging companies sustainability targets and early resultsBoth consumer packaged goods companies(CPGs)and retailers are pushing the paper and packaging industry to innovate and create sustainable solutions and decarboniz

253、e.Upstream Scope 3 emissions typically account for a large share of CPGs carbon footprint,with packaging a significant contributor.Regulation to reduce total packaging volume and improve recycling is also increasing across the world,notably,with push in the EU.For example,the current proposal under

254、review of the EU Packaging and Packaging Waste Regulation requires 20%of take-away beverage containers to be reusable packaging by 2030 and 80%by 2040.It also sets targets for recycled content and bans certain single-use plasticsand these are in addition to existing national regulations.In the US,ce

255、rtain state laws are setting the pace,such as Californias SB 54:Plastic Pollution Prevention and Packaging Producer Responsibility Act,which requires a 25%reduction in the use of single-use plastics and that all single-use plastic packaging be recyclable or compostable by 2032.The multitude of local

256、,state,country,and regional laws can make it difficult for global companies to navigate the full set of rules.In addition,the number of regulations keeps increasing,and how regulation will ultimately play out across different substrates remains largely unknown.35Paper&Packaging Report 2023Generate r

257、evenue growth by boosting current ESG portfolio,offering new ESG features,and creating new ESG businessesSource:Bain&CompanyEstablish an environmental,social,and corporategovernance(ESG)point of departure for theorganization by defining benchmarks,strategy,and target ambitionsKey questionsAn integra

258、ted roadmap sets clear milestones and assigns ownership throughout the companyCompelling communication to investors,customers,and employees backed by proofOperating model,governance,and engagement in ecosystem and public policy and mechanisms in place to monitor,report,and audit progressionGenerate

259、cost savings by embedding energy,emissions,waste,and other ESG measures into operationsWhere are we now,and where do we want to go?What are the most effective top-line and bottom-line levers?How do we get there,and how do we take everyone along?BAFigure 2:A holistic approach to sustainability can cr

260、eate cost savings and revenue growthThe Paris Agreement and corresponding laws and regulations regarding emissions also impact the industry.Large pulp and paper mills are obliged to participate in the EUs Emissions Trading System,and rising carbon prices will incentivize producers to reduce their em

261、issions.Further carbon taxes and more stringent regulations are expected globally.The sustainability playbookAfter a thorough environmental evaluation,many companies realize that sustainability can be both a method for them to create value as well as a way for them to distinguish themselves from ind

262、ustry competitors(see Figure 2).Set the ambition.As a first step,leading companies set an ambition that requires a deep understanding of their companys current sustainability performance vs.the competition based on benchmarking.They also consider current and expected regulations and infrastructure,s

263、uch as the availability of environmentally friendly raw materials,clean energy,and recycling services.For example,one packaging company Bain worked with set the plan to reduce its Scope 1 and 2 emissions by more than 1 million tons by 2030,surpassing its own 1.5C science-based targets by a significa

264、nt margin.After articulating this ambition,the company identified a long list of potential decarbonization levers and quantified the carbon savings potential and cost for each lever.36Paper&Packaging Report 2023Note:Based on Bain client experienceSource:Bain&CompanyEnergyEmissionsWasteCurrent portfo

265、lioNew portfolio 1 to 2percentagepoints2025base caseEnergyWasteExpediteddisposalpriceincreaseSavingsengineBoostcurrent ESGportfolioRevenueloss in case ofno actionESGEBITDAdeltaExpected Emissions TradingSystem priceincreaseEmissions(greenhousegases)Expectedenergy priceincreaseRawmaterials,water,labor

266、NewESGfeature3 to 4percentagepointsSavings from environmental,social,and corporate governance(ESG)in operations boosts EBITDA 1 to 2 percentage pointsCommercial contributions add 3 to 4 percentage points to EBITDAFigure 3:Sustainability can contribute 4 to 6 percentage points to EBITDACreate value t

267、hrough cost savings and revenue growth.There are generally two ways to create value through sustainability.They include cost savings and commercial or top-line growth.Leading paper and packaging companies are able to achieve a 4-to 6-percentage-point EBITDA increase through their effective use of co

268、st savings and commercial levers(see Figure 3).Cost savings:One paper company tackling cost savings started with short-term moves that included changing its heat source from coal to gas,optimizing steam consumption,and energy recovery.The company also adjusted its recipe and process,reducing the fun

269、ctional surface of its paper,and screened pulp more efficiently.Then,the company moved to mid-term projects that required longer lead times and larger investments.The company also investigated biomass investments and black liquor gasification to provide some of the electricity and steam needs of pul

270、p plants.Finally,the company tackled long-term projects,which typically require either substantial organizational adjustments,high investments,or technological developments.These projects could include electrifying machines,switching from natural gas to hydrogen,or carbon capture and storage.37Paper

271、&Packaging Report 2023Through a reduction of energy,emissions,waste,raw materials,and water usage,the client was able to achieve a 1-to 2-percentage-point EBITDA improvement.With higher energy prices and the rising cost of emissions certificates,savings are expected to increase even more.Many player

272、s will start long-term projects with pilots to test new technologies or strategies on a small scale.For example,Smurfit Kappa is the first paper and packaging company to test a hydrogen fuelpowered mill.The pilot mill is in France and is funded by European sustainability incentives.UPM,by contrast,i

273、s the first player to launch a conversion of its gas boiler to electricity in an effort to move toward zero emissions.Companies such as these put pilots on their sustainability roadmaps and scale once they have achieved success.There are countless options for providing more sustainable products to c

274、ustomerssuch as developing low-carbon,fully recyclable,compostable,or biodegradable solutions;using recycled or upcycled inputs;or marketing environmentally friendly production,such as“chlorine-free”or“made with renewable energy.”Commercial or top-line growth:Another way companies create value is by

275、 offering packaging solutions that help customers achieve their sustainability targets.There are countless options for providing more sustainable products to customerssuch as developing low-carbon,fully recyclable,compostable,or biodegradable solutions;using recycled or upcycled inputs;or marketing

276、environmentally friendly production,such as“chlorine-free”or“made with renewable energy.”To create top-line growth,one paper and packaging company started by scouting key environmental,social,and corporate governance(ESG)trends within its end markets.Plastic-to-paper substitution and low-carbon pack

277、aging were deemed as most relevant.The company then reviewed its existing product portfolio and identified which products could help customers in these areas.The company next collected products,such as plastic-free shopping bags for luxury brands and thermoformed cellulose packaging,into a new catal

278、og,developed marketing tools and trainings to support the sales network,and approached their customers with tailored solutions.To develop long-term product options,the company set up a new innovation process to prioritize ESG initiatives,partnered with experts and universities,and developed prototyp

279、es of innovative low-carbon products such as paper-based single-serve portion packs for liquid products.38Paper&Packaging Report 2023These initiatives helped the company grow revenue by boosting its current portfolio and developing new products,and they helped it avoid revenue loss from inaction.In

280、total,these initiatives led to a 3-to 4-percentage-point EBITDA increase.Sometimes companies will launch entirely new businesses to create value.Papermaker UPM has started to leverage the large amount of biomass in its value chain for different applications beyond using pulp for paper production.Spe

281、cifically,it has invested in a biorefinery in Leuna,Germany,that transforms biomass such as solid wood into a range of biochemicals.Once operational by the end of 2023,the refinery will be able to produce 220,000 tons of sugars,lignin,and residue streams for bioenergy and biofuels that can be used i

282、nstead of fossil fuels by UPM and others.Molecular bioproducts are one of UPMs three strategic areas for growth going forward.Embed sustainabilityAs a final step,leading companies embed sustainability value creation in the organization to make sure achieved improvements stick and the organization de

283、velops continuous improvement from within.To do so,they set up the right structure and governance to deliver on the ambition and link strategy to clear roles and responsibilities.They also integrate sustainability in business processes,decision mechanisms,and tools across functions and processes.Pap

284、er and packaging company Ahlstrom,for instance,has embedded sustainability in its mission statement so that now it seeks to innovate products that purify and protect the environment,which has required a full redesign of the companys innovation pipeline.Focusing on building a sustainability-oriented

285、culture and mindset to embed change throughout the organization is key.Practically,this can mean appointing a head of sustainability on the executive team and a sustainability leader in every division.This helps everyone in the organization link short-and long-term incentive systems to sustainabilit

286、y targets.Finally,it is important to ensure that sustainability is led by line executives,those responsible for delivering the business performance day-to-day,so that all employees will focus on what it takes to combine sustainability outcomes with profitability and growth.3939The State of Private E

287、quity and M&A in the Paper and Packaging IndustryResilient end markets and a repeatable value creation playbook fuel strong M&A activity.By Florian Mueller,Sambit Patra,and David WallerAt a Glance The paper and packaging sector has seen more than 2,000 M&A transactions since 2007.Revenue growth,marg

288、in expansion,and free cash flow generation will increasingly create value.The repeatable playbook includes a leading cost position,M&A opportunities,and a profitable portfolio mix combined with a loyal customer base.The paper and packaging sector has had two times more M&A deals relative to its size

289、 than the broader manufacturing industry over the past decade.This flurry of M&A activity comes both from strategic paper and packaging investors who are filling gaps in their portfolios as well as external private equity(PE)players that are creating standalone value with new acquisitions.Historical

290、ly,significant value created by paper and packaging industry PE investments has been through multiple expansionthat is,companies selling off companies at a much higher multiple than they purchased themdriven by an overall booming valuation market(see Figure 1).We are now,however,amid a transformatio

291、nal shift in which multiple expansion can no longer be taken for granted.Going forward,value will increasingly be created through the fundamentals of revenue growth and especially margin expansion,as well as free cash flow generation.40Paper&Packaging Report 2023Notes:Median value creation index for

292、 packaging sector deals 20102022,including buyout and growth deals,fully and partially realized deals,all sizes,all regions;all figures calculated in USD Source:DealEdgeSources of value creation in packaging deals20112014201520182019202253%32%13%19%28%53%62%15%25%Multiple expansionMargin expansionRe

293、venue growthFigure 1:The fundamentals of revenue growth and margin expansion will increasingly generate valueGiven this trend,leading companies are using an investor lens to examine themselves from the outside both in terms of value creation but also in regard to M&A opportunities.This perspective h

294、elps companies understand potential attractiveness for full or partial take-private opportunities as well as any potential exposure to unwanted approaches.Further,taking a PE growth investor lens on their business can help companies unlock full potential regardless of any third-party investor activi

295、ty.Resilient end markets and high M&A activityThe paper and packaging sector has seen more than 2,000 transactions since 2007.And of those,84 were greater than$1 billion and 11 greater than$5 billion.The multiple on invested capital has historically been highest in the US,approximately 2.2 times tha

296、t in Europe and 1.5 times that in Asia-Pacific over the past 10 years.By substrate,paper-related deals have been the most profitable vs.plastic and glass(see Figure 2).The flurry of M&A activity has been enabled by important end markets such as packaged food,home care,and pharma,which have been resi

297、lient in down cycles and have even shown consistent positive growth rates through the global financial crisis of 20082009 and 2020s Covid-19 pandemic-related crash.This resilience has in turn spurred more M&A activity and private equity interest.While end-41Paper&Packaging Report 2023Note:Median pac

298、kaging,paper products,and forestry deal multiples on invested capital by subindustry includes fully and partially realized buyout and growth dealsof all sizes and in all regionsSource:DealEdgeMedian packaging,paper products,and forestry deal multiples on invested capital by subindustry,20102022(in U

299、S dollars)0246XMetalpackaging2.3Paperpackaging2.0Packaging,other1.9Rigid plasticpackaging1.7Flexible plasticpackaging1.6Glasspackaging1.3Paperproducts3.0Forestproducts1.1928213217131414No.ofdealsTop quartileMedianBottom quartileFigure 2:Median packaging,paper products,and forestry deal multiples on

300、invested capital by subindustrymarket resilience will remain a key attraction to invest in packaging going forward,it also requires investors to become much more activist to create value through margin expansion and revenue growth(as multiple expansion is no longer a given).Margin expansionHistorica

301、lly,this lever has had the least impact,but it will become increasingly more important going forward.First,a culture of continuous improvement is required to offset headwinds such as inflation,and then it is possible to expand margins.Key elements in top-line margin expansion include value-based pri

302、cing(including pass-through pricing),innovation,and optimizing the product mix.Leading companies will also achieve bottom-line excellence in areas such as procurement and operations by using the right assets for the right products and reducing the downtime of machines.Revenue growthSignificant value

303、 will also be created through revenue growth,especially through M&A as companies buy and buildnamely,buying smaller companies,improving their performance,and gaining market share.Among the capabilities that leaders are looking to acquire are sustainability and consumer 42Paper&Packaging Report 2023p

304、ackaged goods innovation,which would allow them to differentiate from competitors and gain share in markets that are otherwise moving slowly.The packaging market is still very fragmented across many regions,offering plentiful M&A opportunities going forward.Small to midsized players create room to c

305、onsolidate and achieve leading scale positions in major markets or attractive niches.The maturity level of the M&A market is different by substrate.Metal and glass,for instance,are reasonably consolidated,whereas plastic is midway in industry consolidation.Paper packaging,such as folding cartons,per

306、haps offers the biggest opportunity as it is still relatively unconsolidated.Strategic investors inside paper and packaging are pursuing different types of M&A strategies depending on their goals.Those looking to increase revenue and market share in existing business or enter new geographies are see

307、king pure play scale deals.Scope deals will also only continue to grow in importance as companies use acquisitions to enter new businesses or build up a new technology capability.Faerch acquired Paccor in 2022,for example,allowing the company to enter the dairy packaging market and leverage its join

308、t innovation and recycling technologies for circular food packaging.Companies such as Mayr-Melnhof,a producer of carton board and folding cartons,also do scope deals to integrate down the value chain.Mayr-Melnhof acquired Essentras packaging business in 2022 to bolster its position in resilient down

309、stream markets such as pharma secondary packaging.Since many scale deals come with an element of scope,few targets are pure plays.While hybrid deals add complexity in the first instance,they also provide an opportunity to enter attractive adjacent areas.These days hybrid deals that combine scale and

310、 scope are also gaining popularity(see Figure 3).Since many scale deals come with an element of scope,few targets are pure plays.While hybrid deals add complexity in the first instance,they also provide an opportunity to enter attractive adjacent areas.Graham Packaging,historically focused on bevera

311、ge containers,acquired Liquid Container,which was heavily focused on food packaging,to get access to new customer relationships and technologies.Going forward,scale deals will remain relevant because of ongoing consolidation and the opportunity to fill gaps in geographies,and scope deals will contin

312、ue to be important because of adjacent opportunities,allowing companies to explore new products.43Paper&Packaging Report 2023Deal CountScale dealsHybrid dealsScope deals35%44%20%33%56%11%27%46%27%38%48%14%5436596520152016201720182019202020212022Notes:Analysis includes deals from strategic investors(

313、i.e.,excluding financial investors such as private equity funds)and deals with greater than$100 million in deal value;deals classified by rationale using a proprietary classification framework,as per stated strategic rationale at the time of deal announcement;deal value based on announcement year;sc

314、ale deals include deals made to increase market share or to improve financial strength;scope deals include growth scope and capability scope dealsSources:Dealogic;Bain analysisStrategic deals with greater than$100 million in deal valueFigure 3:Scope deals experienced a peak before the Covid-19 pande

315、mic;since then,scale deals(pure or hybrid)appear to be regaining shareLessons learnedDeal success depends first and foremost on the standalone attractiveness of the target,understanding what to integrate vs.leaving as is and how to create a repeatable playbook of value creation.Three elements in thi

316、s repeatable playbook that have consistently generated value for top quartile companies include the following(see Figure 4):A leading cost position for organic share gain:For example,global packaging and paper company Mondi has an active M&A and integration agenda.After the company made key acquisit

317、ions in Eastern Europe to expand its footprint in emerging countries,it was able to reap the operational synergies relatively quickly.A profitable portfolio mix combined with a loyal customer base for organic growth:For instance,Fedrigoni further diversifies its portfolio of luxury high-end packagin

318、g,where competition is limited and importance of the packaging quality,consistency,and availability is high to the brand and customer.Price is relatively lower in importance,and it is adding further adjacencies such as molded pulp products for luxury applications.44Paper&Packaging Report 2023Source:

319、Bain&Company Growth megatrend Sustainability and plastics substitution E-commerce packagingLow-cost leadership Integrated board producers with modern assets and access to low-cost fiber Innovative use of low-cost recycled input materialsUnique solutions/technology Patent-protected designs and soluti

320、ons Digitally enabled smart packaging solutionsAttractive industry structure Consolidated segments(e.g.,liquid carton,cigarette packaging,metal cans for food packaging)Profitable mix Specialty packaging(e.g.,pharma,luxury)M&A Successful rollups demonstrated in many converting segments,some segments

321、still fragmented(e.g.,flexible packaging,corrugated,carton board)Market leadership Building regional niche leadership(e.g.,beauty packaging,food flexibles)organically or through M&A Last one standing Invest in flat/declining markets with limited competition to strengthen own position and harvest pos

322、ition as peers exit12345678Figure 4:A successful M&A deal includes one or more of the following M&A opportunities such as rollups and other capabilities in the industry:For example,Smurfit Kappa and DS Smith both play in a very regional industry of corrugated packaging.Consequently,over the past yea

323、rs they have added plants to densify their networks.Companies in the top quartile are matching their M&A value creation strategy with their talent strategy,ensuring they have the right executives pulling the appropriate levers in this playbook.These executives have already developed muscles to take

324、down costs(beyond eliminating headcount)as well as find the right dealswhether those are market rollups by larger players or technology-led deals in environmental,social,and corporate governance to acquire new technologies or move into recycling/circularity.Going forward,the M&A market in paper and

325、packaging will remain attractive and active,driven in large part by resilient end markets as well as the repeatable playbook with which many companies continue to find success.4545Sustainable Packaging:What Consumers Want Next from the Paper and Packaging Industry Balancing opportunities and trade-o

326、ffs to reimagine packaging for sustainability.By Daniela Carbinato,Magali Deryckere,and Yoni ShiranAt a Glance Fast-moving consumer goods companies have transformed packaging to achieve circularity targets and reduce greenhouse gas(GHG)emissions.Leading consumer goods companies focus on best practic

327、es,legislation,infrastructure,consumers and retailers,and technology.This approach helped one global beauty company pinpoint ways to use 20%less packaging and consequently reduce GHG emissions by more than 40%by 2030.This chapter expands upon the existing Bain Brief“A Roadmap for Sustainable Packagi

328、ng in Consumer Goods”(published September 2022).The environmental challenge of packaging waste has exploded,with governments,regulators,consumers,shareholders,employees,and society at large putting immense pressure on brands to address the unintended consequences of their current linear packaging sy

329、stem.Going forward,we expect to see a further acceleration of pressure on packaged goods companies.In parallel,reuse and 46Paper&Packaging Report 2023refill may be legally mandated(as we are starting to see in France and other markets).Standardized packaging may also become the norm,and certain poly

330、mers,additives,and pigments may be banned.In this context,many fast-moving consumer goods companies are reimagining packaging to achieve circularity targets while reducing greenhouse gas(GHG)emissions.But they face some big hurdles.Even when they invest in innovations for recyclable packaging,for ex

331、ample,companies often find themselves at the mercy of inadequate recycling and waste management systems in the markets where they make and sell goods.In addition to dealing with broad variations in infrastructure and legislation in different countries,companies must plot their packaging roadmap amid

332、 the uncertain path of technology advances in everything from materials to recycling as well as unpredictable consumer acceptance of different solutions,especially new business models.And success requires thoughtful coordination and cooperation with multiple stakeholders across the system,including

333、suppliers,retailers,industry groups,and governments.With these and other obstacles in front of them,companies are stymied by how to make progress in their sustainability journeys.But sustainability is a huge deal and only getting bigger.Today,45%of the worlds emissions come from making products and consuming them,and the top 10 sources of plastic litter by consumers are all in the consumer product