Anybody with experience in the custom packaging industry?

September 27, 2021

by a searcher in Austin, TX, USA

I'm looking at a small packaging company that produces custom display packaging for retail products. I've been on the buying end of these types of packaging solutions with some of my other businesses but don't have much insight into the industry. Anyone have advice on what specifically to look at in valuing the company? Any broad industry insights? Anyone love or hate this space in general?

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Reply by an investor
from Illinois Institute of Technology in Pasadena, CA, USA

I have owned 4 "packaging-related" companies.....manufacturing flexo plates, cutting dies for corrugated packaging and displays, etc###-###-#### could be of redacted

Reply by a searcher
from University of Toronto in Toronto, ON, Canada

I have looked closely at packaging, but for a different space. Our market was niche and high-end electronics or automotive, where packaging was proportionally a much smaller %age of the overall value of the product being sold. There is also no (or little) incentive to in-house the pacakaging, so margins were actually quite strong. The target does in-house design, prototyping and production for small runs but leverages the supply chain (ie competitors) for larger runs. So as a value chain integrator it has good upside potential because it’s able to embed itself in clients business processes. You should take a look at “Packaging and labeling” ibisworld report, which has a great commentary. I read the one specific to Canada - so if they don’t have one for the States just read that one as market dynamics are likely similar. The space is quite fragmented and suppliers can be sticky given the nuances of end customer requirements. When products change packaging will change as well, so repeat business is likely. Happy to carry the conversation further over DM.

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