New data from Demica, a leading fintech, reveals that the paper packaging sector in key markets across Europe and North America is showing signs of stabilisation. This comes after challenges for the sector, as consumers shifted towards experiences as opposed to spending on packaged goods.
The Demica Sales Value Index analyses anonymised invoice data from a consistent subset of buyers and suppliers, aggregating millions of data points monthly. Processed on the Demica supply chain finance platform, the analysis tracks billions of pounds in B2B sales across Europe and North America. The latest update shows that sales in the paper packaging sector fell by 12% in the year ending June 2024 (end of Q2), a decline that is significantly less steep than the 17% drop recorded the previous quarter, suggesting a move towards market stabilisation. The new figure for August indicates a 9% year-on-year fall in sales – further indicating that decline is slowing.
“While the paper packaging sector continues to experience some challenges, the slowing rate of decline in sales suggests that demand is beginning to normalise,” said Maurice Benisty, Chief Commercial Officer at Demica. “We are seeing a shift back to more predictable patterns of consumption after the unprecedented spikes and subsequent drops during the pandemic period. This is a positive sign for the industry as it navigates the path to recovery.”
At the same time, the steady growth of eCommerce continues to support demand for packaging materials, helping to mitigate further declines in the sector.
Benisty adds, “Our analysis shows that while there has been a drop in demand, key factors that drive growth in the paper packaging sector – such as the ongoing need for sustainable packaging, and the growth of eCommerce – remain strong. As economic conditions stabilise, we expect sectors that rely heavily on packaging to recover. Additionally, innovative financing solutions, such as buy-now-pay-later (BNPL) and point-of-sale finance, are helping to support demand in this sector by easing cash flow constraints for businesses.”
Demica’s platform, used by banks and corporates globally, processes billions in trade receivables, providing a unique insight into key industries. The latest data shows signs of recovery in the paper packaging sector, as it begins to stabilise and adapt to post-pandemic shifts in demand.