Paper Products Manufacturers NAICS 3222

Jun 6, 2026 - Mounting Challenges Limit Packaging Market Growth

• According to Resource Recycling, packaging companies are increasingly considering mergers, acquisitions, and vertical integration to secure recyclable material supplies, strengthen sustainability capabilities, and drive packaging innovation. However, some McKinsey consultants say such strategies have done little to reduce volatility in recycling markets. Firms continue to face uncertainty around raw material costs and supply chains. At the same time, companies must navigate changing regulations, tariffs, fluctuating demand, and consumer resistance to higher-priced sustainable packaging. McKinsey noted that sustainability has become a baseline expectation in the packaging sector. At the same time, risk-sharing concerns, unpredictable demand, and ongoing supply-demand imbalances continue to hinder long-term recycling investments. Industry analysts expect modest growth in the paper and packaging industry over the next one to two years as economic and geopolitical uncertainty persists.
• According to World Paper Mill, Chinese paper and pulp manufacturers have expanded capacity beyond what the country can consume, and the excess is disrupting global paper markets. Between 2022 and 2025, China added about 12 million metric tons of additional paper and paperboard capacity, creating an estimated annual surplus of 4 million metric tons that is being exported at competitive prices, according to Fastmarkets. Chinese paper exports rose about 23% in the first half of 2025, supported by lower energy, financing, and production costs, which have reshaped trade flows and increased pressure on paper producers in North America, Europe, and other regions. This trend could affect the US paper product manufacturing industry by increasing competition from lower-cost imports, encouraging mill closures and consolidation, and accelerating shifts toward specialty packaging, premium tissue, recycled-fiber products, and other higher-value grades that are less exposed to commodity paper competition.

• In March, the USDA terminated the Paper and Packaging Board, ending a decade-long marketing program funded by manufacturers and importers to promote paper-based packaging, according to Packaging Dive. A recent referendum failed, with only about 26% of eligible participants, representing less than 10% of volume, supporting continuation. The program, funded by a 35 cents-per-ton fee paid by large, US-based manufacturers and importers of paper and paper-based packaging, had a $20 million budget in 2025 and helped drive demand, including an estimated 1.1 million short tons of annual packaging consumption from 2019 to 2023. For the packaging and labeling services industry, the shutdown removes a key source of coordinated marketing that boosted paper-based packaging adoption and supported the shift away from plastics. Companies may now need to increase their own marketing and innovation efforts to sustain demand and maintain momentum for paper packaging.
• The global market for molded pulp packaging is expected to grow steadily through 2030, according to market research firm Smithers. The worldwide molded pulp packaging market is forecast to reach $4.7 billion in 2026 and is expected to post a compound annual growth rate (CAGR) of 4.1%, reaching a value of $5.5 billion in 2030. Increased regulation and corporate commitments to reducing plastic content in packaging are boosting demand for molded pulp alternatives. Most commonly used in egg and wine packaging, molded pulp is gaining market share in other applications, including foodservice, cosmetics, and pharmaceuticals.