Sustainable packaging is becoming an increasingly important focus for European brand owners as they adapt to rising packaging costs and evolving consumer expectations. According to L.E.K. Consulting’s 2025 European Packaging Survey, brands are making significant changes to packaging materials and design, with sustainability ranked among key considerations.
Moreover, with the introduction of new Extended Producer Responsibility (EPR) regulations in May, there’s now additional pressure on companies to rethink their packaging strategies to meet stricter sustainability requirements.
Here’s how brands across the UK, Germany, France, Italy, Spain and Poland are adapting their packaging strategies.
- Packaging Costs Are Still on the Rise: Around 70% of brands expect packaging costs to increase in 2025. Rather than simply passing these higher costs on to consumers, 71% of brand owners plan to optimise their packaging designs to reduce expenses. This approach reflects ongoing pressures from raw material price increases, inflation and supply chain challenges. With cost remaining the primary driver behind packaging decisions, brands are balancing the need for greater efficiency with ongoing innovation.
- Smart Packaging Adoption Is Increasing: Smart packaging is rapidly becoming a core element of brand innovation across various industries, with 69% of brands adopting temperature and freshness indicators, 40% deploying mislabelling identifiers, and 39% using tamper-evident mechanisms. Beyond protection, smart packaging enhances customer engagement through interactive elements such as QR codes, which drive sales and loyalty. These technologies not only improve product performance but also support operational efficiencies, such as inventory management. As brands invest heavily in SKU innovation, smart packaging is shifting from a niche feature to a strategic tool that boosts margins, differentiates products, and strengthens consumer trust in a competitive e-commerce landscape.
- Sustainability Priorities Are Shifting: Brand definitions of sustainable packaging are evolving. More companies now prioritise packaging made with lower greenhouse gas emissions or produced using renewable energy, rather than focusing solely on recyclability or recycled content. Despite these shifts, 32% of brands cite high costs as the biggest barrier to adopting sustainable packaging. However, investment is still accelerating. Brands reported that 42% of their packaging spend in 2024 went towards sustainable options, and is expected to rise to 59% by 2028.
- Sourcing Is Moving Closer to Home: According to our study, the share of packaging sourced within the European Union has increased from 45% in 2019 to 56% in 2024, with a projected rise to 59% by 2028. This move toward localised sourcing reflects growing brand priorities around improving supply reliability and reducing lead times in an increasingly uncertain global landscape.
Looking ahead, packaging will remain a key area of focus as brands navigate rising costs, regulatory demands and shifting consumer preferences. Brand owners are not only investing more in sustainable materials and smarter designs but also rethinking supply chains to build greater resilience. As these trends continue, packaging is evolving from a functional necessity into a strategic lever for growth, differentiation and long-term value.