The Zacks Containers -  Paper and Packaging industry has been facing weak demand due to lower consumer spending amid an inflationary backdrop. Pricing actions implemented by the industry players will help offset the impacts of supply-chain disruptions and elevated costs and tariffs. The industry will eventually gain support from rising e-commerce activities and solid demand for sustainable and eco-friendly packaging options due to increasing environmental concerns.

Companies like Amcor plc (AMCR Quick QuoteAMCR - Free Report) , Karat Packaging (KRT Quick QuoteKRT - Free Report) and Sonoco Products Company (SON Quick QuoteSON - Free Report) are set to gain from their efforts to capitalize on these trends.

About the Industry

The Zacks Containers - Paper and Packaging industry comprises companies that manufacture paper and plastic packaging products. The packaging solutions provided by the industry help protect and preserve products, extend the shelf life and cut down on wastage and loss across the wide and lengthy range of distribution channels. The products range from containerboard and corrugated packaging to flexible and rigid plastic packaging. Some companies manufacture dispensing pumps, closures, aerosol valves and applicators for the beauty, personal, home care and healthcare markets. The industry serves a wide array of markets, including food, beverage, food services and other consumer products, such as beauty, personal care and home care. They also cater to the chemical, agribusiness, medical, pharmaceutical, electronics and industrial markets, to name a few.

What's Shaping the Future of the Containers - Paper and Packaging Industry

Industry Facing Weak Demand, High Costs & Tariffs: The industry has been witnessing volume declines due to lower consumer spending on goods, as elevated inflation and higher interest rates have dampened consumer spending. Slowdown in housing and industrial activity has also impacted demand for packaging used in appliances, furniture and construction-related products. Customers have been lowering their inventory, which had built up in response to high demand and supply-chain issues. Producers had to announce downtime, curtailments and selective mill closures, which had an impact on their top-line performances. Higher material, labor and transportation costs and imposition of tariffs added to the margin pressure. The companies have been implementing pricing strategies and cost-reduction actions to negate these headwinds. They are also streamlining their operations and taking steps to realign with high-growth key markets to bolster their performance.

E-commerce Acts as a Key Catalyst: With rising e-commerce activities over the years, the importance of packaging has increased manifold as it maintains the integrity and durability of a product. Packaging also helps withstand the complex product delivery process. E-commerce is expected to surge due to rising Internet penetration, widespread smartphone adoption and the convenience of shopping online. Advancements in digital payments, logistics and personalization are making the online shopping experience faster, safer and more customer-centric. This presents a major growth opportunity for the Containers - Paper and Packaging industry. Also, the industry has significant exposure (more than 60%) to consumer-oriented end markets, such as food and beverages, as well as healthcare. Demand for packaging applications remains fairly stable for these sectors across economic cycles, thus ensuring consistent demand for packaging solutions.

Demand for Eco-Friendly Packaging to Aid Industry: The preference for environmentally friendly biodegradable packaging materials is seeing a steady rise globally, driven by customers’ increasing awareness of environmental issues. The industry is constantly striving to meet the same by adopting the latest technology and bringing innovative products. Industry players have begun incorporating recycled content into production methods. By maximizing recycling, the industry can implement environmentally and economically sustainable production methods.

Zacks Industry Rank Indicates Bleak Prospects

The Zacks Containers - Paper and Packaging industry is a 10-stock group within the broader Zacks Industrial Products sector. The industry currently carries a Zacks Industry Rank #198, which places it at the bottom 19% of the 244 Zacks industries.

The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates weak prospects in the near term. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.

Despite the dim near-term prospects of the industry, we will present a few stocks that you may want to consider for your portfolio. However, it is worth taking a look at the industry’s shareholder returns and current valuation first.

Industry Versus Broader Market

The Containers - Paper and Packaging industry has underperformed its sector and the S&P 500 over the past year. The industry has declined 7.8% against the sector’s growth of 16.7%. Meanwhile, the S&P 500 has gained 18%.

One-Year Price Performance

Industry's Current Valuation

The trailing 12-month EV/EBITDA ratio, a commonly used multiple for valuing Containers - Paper and Packaging companies, shows that the industry is currently trading at 12.92X compared with the S&P 500’s 19.00X and the Industrial Products sector’s trailing 12-month EV/EBITDA of 20.04. This is shown in the charts below.

Enterprise Value/EBITDA (EV/EBITDA) Ratio TTM

Enterprise Value/EBITDA (EV/EBITDA) Ratio TTM

Over the last five years, the industry traded as high as 15.06X and as low as 9.78X, with the median at 11.57X.

3 Containers - Paper and Packaging Stocks to Keep an Eye on

Amcor: The company closed the merger with Berry Global Group last year, strengthening its position as a global leader in consumer and healthcare packaging solutions. In fiscal 2026, it expects to realize $260 million in pre-tax synergies, driving approximately 12% adjusted EPS accretion. Over fiscal 2026-2028, Amcor projects $650 million in total benefits from cost savings, growth opportunities and financial synergies, and more than 30% EPS accretion by the end of FY28. With projected annual cash flow exceeding $3 billion by FY28, the company will be well-positioned to invest in organic growth, pursue strategic M&A and return capital to shareholders through attractive dividends and share repurchases. Amcor shares have gained 12.6% in the past three months. 

The Zacks Consensus Estimate for Amcor’s fiscal 2026 earnings has remained unchanged in the past 60 days. The estimate indicates year-over-year growth of around 13%. AMCR has an estimated long-term earnings growth rate of 10.7% and a Zacks Rank # 3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

Price & Consensus: AMCR

Karat Packaging: Last year, the company expanded its business to supply paper bags (a new category) to one of its largest national chain accounts. This business is projected to generate approximately $20 million in annual revenues, with further market share gains expected over the next few years, reinforcing KRT’s leadership in sustainable, eco-friendly foodservice products. The company plans to expand its product pipeline, focusing on eco-friendly innovation to strengthen its competitive advantage. KRT’s growth will be supported by rising demand for sustainable products, increased food delivery and take-out consumption. KRT is ramping up its manufacturing capabilities to meet the growing demand and implementing initiatives to significantly boost online sales.  The growing preference for food delivery, take-out and at-home dining is another key catalyst. The company is also diversifying its sourcing footprint and lowering sourcing from China. KRT shares have gained 2.2% in the past three months. 

The Zacks Consensus Estimate for Karat Packaging’s 2026 earnings indicates year-over-year growth of 5.6%. The estimate has remained unchanged over the past 60 days.  The Chino, CA-based company has a Zacks Rank of 3 at present and a long-term estimated earnings growth of 11.2%.

Price & Consensus: KRT

Sonoco: The company completed the sale of its ThermoSafe business unit in November 2025, marking the final step of its portfolio transformation. Sonoco has streamlined operations from a large portfolio of businesses into two core global business segments focused on metal and paper consumer and industrial packaging. Net proceeds from the divestiture were used to lower debt levels. Sonoco’s acquisition of Eviosys (forming Sonoco Metal Packaging EMEA) in December 2024 is aiding results. It expects $100 million in run-rate synergies by the end of 2026. The company is investing to expand pet food and seafood packaging opportunities in Eastern Europe and maintains an active growth pipeline with a high conversion rate. It is also gaining share in Sonoco Metal Packaging US and Industrial Paper Packaging. SON shares have gained 20.3% in the past three months. 

The Zacks Consensus Estimate for Sonoco’s fiscal 2026 earnings remained unchanged in the past 60 days. The estimate indicates 5.77% year-over-year growth. The Hartsville, SC-based company has an estimated long-term earnings growth of 10.7%. The company currently carries a Zacks Rank of 3.

Price & Consensus: SON