Dutch Packaging Sector in Transition

According to the Dutch Central Bureau of Statistics, the packaging industry in the Netherlands is comprised of around 330 companies. These businesses are currently facing rapidly changing market conditions. However, developments such as rising costs, falling demand and an increased focus on sustainability measures are by no means isolated phenomena, but are similarly reflected in many European countries. Against this backdrop, it becomes clear that entrepreneurial skill is more important than ever. The industry has proven that it is capable of this in past times of crisis.

For example, according to a report by Aeternus Corporate Finance (Top 25 Report 2023), the Dutch packaging industry experienced an upswing even in the years before Corona: in 2018, 3,108 kilotonnes of packaging material were produced, in 2020 it was already 3,264 kilotonnes, which corresponds to an increase of 4.6 percent. In particular, packaging made of paper and cardboard recorded the highest growth rates with an increase of 16.8 kilotonnes between 2018 and 2020, which can be attributed on the one hand to the increasing demand for environmentally friendly packaging and on the other hand to the boom in online logistics. In 2020, the total turnover of the industry will therefore have reached around 6.8 billion euros.

Opportunities and Challenges

The most important sales driver is private consumption. According to Aeternus, Dutch people open an average of seven packages per day. This is mainly food and beverage packaging. Other trends are also creating momentum in the packaging industry: households are getting smaller and smaller. At the same time, the need for convenience is increasing. Both developments are prompting manufacturers to offer smaller packaging sizes.

In addition, online trade has experienced a huge upswing due to the Corona crisis: In 2020, 41 percent more online purchases were made than in the previous year. The Knowledge Institute for Mobility Policy expects online shopping to continue to increase, and with it the demand for packaging.

Recently, however, geopolitical factors have left their mark on the packaging industry. For instance, 20 percent of pulp for paper and six percent of aluminium came from Russia. As a result, raw material prices have been rising, although many companies have managed to pass on the higher costs to customers.

Écart Invest, a private equity firm specialising in the packaging industry, also notes: “The packaging market is in a state of upheaval: raw material and transport chains have been disrupted, leading to a sharp rise in prime costs across the board. Energy-intensive production techniques have led to further cost increases since the war in Ukraine.” However, these turbulences also offer opportunities, according to the analysts. Finding new cooperation partners or supply chains or pushing sustainability are possible options.

Transformation of Packaging Policy in the Netherlands

Around 20 percent of the total waste generated in the Netherlands is packaging, Aeternus reports. Compared to France and Spain, the country lags behind in sustainability legislation. Écart Invest points out that despite numerous sustainability initiatives, the market will only change its habits if prompted by legislation. This is because, despite government incentives and market-based initiatives, recycled materials and bioplastics are still expensive and in limited supply. 

Although the Dutch plastic packaging market has some catching up to do from a regulatory perspective, it is exceeding recycling targets. By 2022, 88 percent of all packaging in the Netherlands was recycled and reused, making the country one of the leaders in Europe. Afvalfonds Verpakkingen aims to use only fossil-free and recyclable packaging by 2050. Companies that sell packaged products in the Netherlands are responsible for the collection and recycling of their packaging. This task is taken over by the Waste Fund, which is financed by industry levies. Afvalfonds Verpakkingen is a central organisation in this system.

In accordance with its plans, emphasis is placed on the reduction, reuse and sustainable management of plastic packaging in order to both meet environmental requirements and reap economic benefits. Reuse of packaging is an important goal, he said, especially in the context of legislation such as the Single-Use Plastics Directive: on 3 July 2021, the EU Single-Use Plastics Directive was introduced, banning certain plastic products. Further measures introduced in January 2023 relate to the cost responsibility of producers for single-use plastic packaging.

The medium-term goal of the Dutch Waste Fund is to use plastic packaging that is environmentally neutral and free of fossil fuels by 2050. Various initiatives, including tariff differentiation since 2019, promote environmentally friendly packaging solutions. From 2024, the tariff system will be revised to give new impetus to the use of recyclable packaging. Another important tool for waste prevention is the deposit system, which will be extended to small plastic bottles in 2021 and to cans in 2023. More than 28,000 collection points support the system, and although the collection target of 90 percent was not reached in 2022, measures to improve recycling and raise awareness will continue.

Consumers also play an important role in recycling. In the Netherlands, each inhabitant produces an average of 490 kg of waste per year, of which 59 percent is collected separately. Research by the Centre of Expertise in the Food Industry shows that 55 percent of consumers want more information about recycling and food safety on packaging, signalling opportunities for a more sustainable future.