Energy and raw material prices were already at a high level but surged even further after the beginning of the war in Ukraine. Those increases combined with availability issues have serious financial impacts on the flexible packaging supply chain in Europe, according to a report by FPE (Flexible Packaging Europe, the industry representing interests of 80 companies and manufacturers). All main substrates used for flexible packaging—such as plastics, paper and aluminum—are concerned but also adhesives, lacquers and inks. The industry is confronted with high energy prices in their direct operations manufacturing flexible packaging and logistics.
The cost share for logistics is less than in other packaging sectors due to the low product to packaging ratio of flexible packaging and very efficient transportation (usually on reels) the absolute increase is significant. Reports from forwarder associations even show the risk of reduction of available logistic capacities as companies will have to give up their operational business due to high diesel prices.
“The level of cost increases due this situation for manufacturers of the flexible packaging industry cannot yet be assessed completely but we are convinced that the peak is not reached yet,” said Guido Aufdemkamp, executive director of Flexible Packaging Europe.
Almost half of the Fast-Moving Consumer Goods (FMCG) in Europe, excluding beverages, are packed with flexible packaging. Examples include all kinds of packaged foods such as pet food, personal and household care products, and medical and pharma, which all rely on flexible packaging.