Demand and format sizing
Category volume by pack format and substrate, sized from the way packaging is actually bought rather than from headline market totals.
Capability 05 of 06Market entry · Due diligence · Capacity · Portfolio
Packaging Growth & Investment Strategy
This is where the research meets money. Entering a market, buying a converter, building a line or cutting a portfolio are decisions you make roughly once, and live with for a decade.
- Engagement types
- Entry, diligence, capacity, portfolio
- Typical timeline
- 3 to 16 weeks
- Deal side
- Buy side, sell side, lender
- Reviewed
- July 2026
Definition
What drives valuation in a packaging converter?
Contract quality drives valuation more than volume. Buyers pay for long contracts with genuine switching costs, a customer base not concentrated in two or three accounts, pass-through clauses that actually work, modern and flexible assets, and a substrate mix regulation is not about to make expensive.
Two converters with identical revenue and similar margins can be worth materially different amounts on those grounds alone. The one whose customers hold dedicated tooling and qualified specifications is defensible. The one winning on price at each tender is renting its revenue.
This is the lens we bring to every engagement on this page, whether you are buying, selling, investing behind a growth plan, or deciding not to.
The ledger
Five decisions, and what usually settles them badly
Packaging capital decisions rarely fail on analysis. They fail because the wrong question got answered convincingly, usually under time pressure.
| The decision | What usually settles it | What should settle it |
|---|---|---|
| 01Enter a new market or format | A competitor went there first and appears to be doing well | Whether your cost position survives the freight, duty and compliance cost of serving it from where you make it |
| 02Build capacity or buy conversion | Whichever option protects the current headcount and capex plan | Utilisation you can commit to across the whole asset life, not the first two years of the forecast |
| 03Acquire a converter | The quality of the target that happened to come to market this year | Contract length, switching cost and what actually happens at the next renewal cycle |
| 04Rationalise a portfolio | Cutting the smallest SKUs by volume, because that list is easy to produce | Contribution after tooling, changeover and stock write-off, which usually ranks the list differently |
| 05Invest in a new line | The payback period in the equipment vendor's model | Payback at your realistic efficiency and mix, with the regulatory life of the format factored in |
The middle column is not a criticism of the people involved. Each of those defaults is a reasonable heuristic under deadline. The work is producing the right-hand answer inside the same window.
What we do
Three engagements, one evidence base
All three draw on the same underlying work: shopper evidence, cost models and regulatory position. That is what makes a packaging view different from a generalist one.
01
Market and format entry
Entry cases fail on cost to serve far more often than on demand. We test whether you can reach the market profitably before anyone models the share you might win.
Cost to serve
Landed cost into the target market including freight on cube, duty, tariffs and producer responsibility fees.
Competitive position
Who already holds the accounts, on what contract terms, and what it would realistically take to displace them.
Route to market
Whether to enter through a converter partner, an acquisition or a greenfield asset, costed as three comparable options.
02
Commercial due diligence
We work buy side, sell side and for lenders. The question is always the same: does the plan hold, and what specifically would break it.
Customer and contract review
Renewal risk assessed against contract length, switching cost and the tooling or qualification that holds each account in place.
Capacity verification
Whether forecast volume fits installed capacity at realistic efficiency, or quietly assumes a second shift nobody has costed.
Substrate exposure
Where the portfolio sits against price volatility and regulatory direction, including formats that become expensive to sell.
Synergy testing
Claimed synergies tested against tooling, requalification and changeover reality, which is where most of them disappear.
03
Portfolio and capacity strategy
Most portfolios grew by addition and were never pruned. Most capacity cases were built when the format mix looked different from today.
True contribution
Profitability per SKU after tooling amortisation, changeover time and obsolescence, rather than gross margin alone.
Rationalisation modelling
What a cut actually saves once write-off, customer loss and remaining overhead absorption are counted against it.
Capacity and footprint
Where assets should sit relative to demand and filling, tested against freight, lead time and duty exposure.
Investment cases
Board-ready cases with the assumptions stated plainly and the sensitivities that would change the answer identified.
Who uses it
Four seats at the same table
Each needs a different answer from the same evidence, and usually on the same deadline.
Test the thesis
Independent challenge to an acquisition case, delivered inside the window a live process allows.
Underwrite with sector eyes
Packaging-specific diligence covering contract quality, substrate risk and capacity reality, not a generic market view.
Prepare properly
Sell-side positioning that shows switching cost and contract quality, which is what buyers actually pay for.
Decide make or buy
In-house conversion against partner supply, costed across the asset life rather than the first forecast years.
Questions
Frequently asked questions
What does commercial due diligence cover in a packaging deal?+
Commercial due diligence tests whether the business plan is achievable. In packaging that means verifying customer relationships and renewal risk, checking whether claimed volumes fit installed capacity at realistic line efficiency, assessing substrate exposure to price and regulation, and confirming the synergy case survives contact with tooling, qualification and changeover reality.
What multiple do packaging businesses trade at?+
There is no useful single answer, and anyone quoting one without seeing the contract book is guessing. The range is wide and driven by contract length, customer concentration, substrate mix, asset age and geography. We would rather build the value bridge for a specific business than hand over a sector average that misleads in both directions.
Should we build converting capacity or use external partners?+
It depends on the utilisation you can commit to across the asset life rather than the first two years. In-house conversion pays where volume is stable, specification is proprietary and the format is core. External partners usually win where demand is seasonal, formats are proliferating, or the category is one regulatory change away from a substrate switch.
How do you assess a target with heavy customer concentration?+
Concentration is not automatically a discount. What matters is switching cost: dedicated tooling, qualified specifications, integrated line positions and regulatory approvals all make a customer expensive to lose. A concentrated book held by genuine switching costs can be more defensible than a fragmented one held by price alone.
How long does commercial due diligence take?+
A focused commercial due diligence runs three to six weeks, which is the window most processes allow. Broader market entry or capacity strategy work runs eight to sixteen weeks. Where customer referencing is permitted, timelines depend more on access than on analysis.
Pack Performance & Shopper InsightsConverting & Supply Chain EconomicsCircularity & Packaging Compliance
Not investment advice. This page describes advisory services in general terms. Nothing here is investment, legal or accounting advice, and no engagement is created by reading it. Last reviewed July 2026.
Bring us the decision, not the brief
Tell us what is being approved, by whom and by when. We come back with a scope, a timeline and a fixed cost that fits inside your process.
Strategic Packaging Insights is a trading name of SRI Consulting Group Ltd, registered in England and Wales, company number 16581261. sales@strategicpackaginginsights.com
Last reviewed: 31 July 2026