According to Bain & Company’s 2026 Paper & Packaging Report, firms are sharpening strategies by deploying AI to improve operations, re-evaluating capacity, and implementing disciplined commercial practices to navigate persistent oversupply and subdued demand.
According to Bain & Company’s 2026 Paper & Packaging Report, producers in the paper and packaging sector are reshaping strategy around three priorities as they confront persistent struct...
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ural overcapacity, swinging input costs and subdued end-market demand. The consultancy says firms are tightening discipline on capacity choices, accelerating deployment of AI to lift operational performance and sharpening commercial capability to defend margins.
Bain’s analysis paints a market where excess capacity is not a cyclical aberration but a long-term feature that erodes profitability unless addressed. The report notes that while most businesses target profit growth at roughly four times the market rate, only about 7% of industrial players achieve that outcome, signalling how quickly margins can be undermined when supply outstrips demand. “The industry is operating in a structurally oversupplied environment, and companies that rely on past demand assumptions will continue to face pressure,” said Ilkka Leppävuori, leader of Bain & Company’s global Packaging subsector.
To counteract oversupply, the report recommends reallocating volumes toward the most profitable customers, products and geographies, and treating mergers and acquisitions as a lever to reshape networks and boost asset efficiency. Bain also urges a granular, site-by-site evaluation of options , closures, conversions or capacity reallocation , taking into account knock-on effects across the broader system.
A major operational theme in the report is the rapid emergence of AI-enabled maintenance as a high-return intervention. Bain outlines three pillars for “smart maintenance” , asset strategy, workforce productivity and spare-parts optimisation , and describes a four-stage rollout from diagnostic work through to scaling. The consultancy quantifies material upside: increasing tool-in-hand time by about 15 percentage points, cutting maintenance cost per ton by an estimated 17–23% and trimming spare-parts inventories by 20–40%, thereby releasing working capital in capital-intensive facilities.
Those gains, Bain argues, can translate into higher throughput and lower opex, capex and working capital requirements as predictive and prescriptive analytics reduce breakdowns and downtime. The firm positions such investments as particularly attractive where unit economics are the decisive competitive difference.
Commercial discipline forms the third pillar. Bain finds that many operators lack clarity on the true economic contribution of individual customers, SKUs and sales channels, with hidden leakages from discounting, opaque pricing structures and uneven cost-to-serve. The report estimates that rigorous commercial excellence , reworking pricing architecture, pruning unjustified discounts, tightening renewals and targeting high-return accounts , can multiply growth two to three times relative to current approaches.
Analytical tools play an increasing role in that work. According to the report, AI-driven techniques such as web scraping and geospatial analysis are being used to pinpoint demand clusters and new pockets of opportunity, a capability that gains importance as customer consolidation intensifies competitive pressure.
The broader industry context complements Bain’s findings. McKinsey research published in 2025 showed a marked lift in interest in generative AI across packaging leaders, with more than 80% of executives surveyed actively considering or rolling out gen AI solutions to bolster commercial conversion and pipeline visibility. That shift reflects a wider move from experimentation to targeted implementation to secure measurable commercial benefits.
Industry commentators and trade coverage have echoed Bain’s central thesis: balancing capacity with demand, harnessing AI for both shopfloor reliability and commercial insight, and instituting disciplined pricing and portfolio management are the critical priorities for resilience. As firms weigh capital choices in a market unlikely to rebalance quickly, those that combine detailed cost-to-serve economics with scalable digital maintenance and tighter commercial playbooks will be best positioned to protect margin and generate durable value.
Source: Noah Wire Services
