Paper & Packaging Report

Battle of the Substrates

The packaging value chain presents myriad challenges and opportunities for suppliers.

Yelena Ageyeva-Furman, Leevi Snicker, and Torsten Lichtenau

First published on января 08, 2026
min read


Резюме Consumers clearly prefer non-plastic packaging, specifically paper and glass, over plastic. Consumers and regulators are pushing for sustainable alternatives, yet suppliers are struggling to meet the demand for sustainable plastic. The time is ripe for substrate suppliers to find additional areas for growth and defend potentially vulnerable positions through innovation and alternative substrates. This article is part of Bain's 2026 Paper & Packaging Report. Explore the report Between growing consumer awareness of sustainable packaging options, tightening environmental regulations, and new innovations in materials, the past five-plus years in the packaging industry have been turbulent, and market dynamics continue to change rapidly. These various factors create pressures, vulnerabilities, and opportunities depending on what substrate a company is producing or which substrates a brand is choosing between for its packaging. Executives at brands, retailers, and packaging companies are wrestling with a whole new set of questions: Do we redesign our packaging? Do we make it recyclable? Do we focus on renewable content? Or do we go for reuse? At the same time, should we consider substituting substrates to help achieve our targets for more sustainable packaging portfolios? And so these industry shifts present an interesting opportunity for suppliers offering alternative substrates. Bain’s recent research suggests that a structured and thoughtful approach can be used by various suppliers, whether to identify and defend potentially vulnerable positions or find additional opportunities for growth through alternatives. In any scenario, the time to act is now. The substrate market The size of the global consumer packaging market is around 8 trillion units, of which roughly 60% are plastic and 20% are fiber-based solutions, with the remainder shared by other materials such as glass and metal. Nearly 65% of these are food and beverage-related applications. Plastic has been a dominant material of choice for decades because of its light weight, mechanical strength, chemical resistance, and versatility. Those qualities, combined with its low cost and convenience compared with other substrates, have made plastic a very appealing choice for brands, retailers, and consumers. While plastic is extremely durable, it was not originally designed with its end of life or disposal in mind. In recent years, regulators, suppliers, brands, retailers, and consumers have begun to scrutinize the environmental impact of discarded packaging—especially issues like marine pollution and microplastics. These challenges prompt many suppliers to ask: Where are our key vulnerabilities? At the same time, both established players and new entrants are exploring another question: Where are the opportunities for growth? The packaging value chain in flux Regulators have prioritized the sustainability of plastic packaging, and Europe leads with multiple measures that mandate recycled content in different packaging applications and create incentives for different players in the complex circular ecosystem to improve collection and recycling. Consumer preferences are also evolving. Recent research by Bain suggests that consumers clearly prefer non-plastic packaging, specifically paper and glass, over plastic (see Figure 1). At the same time, consumers show an awareness of and preference for more sustainable plastic options, and they opt for recyclable, reusable, or recycled plastic options over alternatives (see Figure 2). Finally, an increasing share of consumers show a willingness to pay some premium for packaging made of 100% recycled material. Figure 1 Consumers prefer paper or glass packaging materials over plastic Notes: Percentages represent the top ranking distribution among packaging materials; based on weighted average ranking of each packaging material; totals may not equal 100% due to rounding Source: Bain Consumer Lab ESG Survey 2024 (n=2,000 across the US, UK, Germany, France, Italy, Japan, China, Indonesia, Brazil, and India; n=1,000 in the Netherlands) Figure 2 Consumers prefer recyclable, reusable, or recycled packaging over plastic-free Notes: Respondents could select up to 2; 0% of respondents selected “Other, please specify” Sources: Bain Consumer Lab ESG Survey 2024 (n=2,000 across the US, UK, Germany, France, Italy, Japan, China, Indonesia, Brazil, and India; n=1,000 in the Netherlands); Bain Consumer Lab ESG Ethnographic Research, June 2024 (n=70) Unfortunately, the system is not yet ready to satisfy the growing consumer demand. For example, even in the European Union, arguably one of the most advanced recycling markets, only about 40% of plastic waste was recycled in 2023, and the majority goes through mechanical recycling, frequently downcycled. Future scenarios for recycled plastic suggest that there may be a 30% to 40% gap between demand and available supply in 2030 for plastic types such as PP and PE. Consequently, brands and retailers are stuck between a rock and a hard place: Consumers and regulators are pushing for sustainable alternatives, yet suppliers are struggling to meet the demand for sustainable plastic, both in volume and in price. At the same time, producers of other substrates have also focused on innovation. Whether it’s fiber producers investing in better barrier properties or aluminum players creating circular offerings, producers are actively looking for opportunities to gain share in the packaging market. And while low cost was previously a significant competitive differentiator of plastic, this will change due to the impact of regulation, which may create an opportunity for other substrates to grow their share of packaging applications. Where can alternative substrates gain ground vs. incumbents? Suppliers should focus on segments where there is a higher chance to offer products at scale, creating attractive growth that opens opportunities for new packaging line investments. Segments where plastic currently has a high share but will come under substantial regulatory pressure will have higher exposure. Such segments may include cups and lids, containers, boxes, and clamshells—and consequently, these will become potentially interesting opportunities for fiber players. Successful companies, however, also take into account the plastic type and existing recycling infrastructure, since the opportunity for substitution may be lower for segments such as PET bottles, where recycling infrastructure is already reasonably mature. Leading companies apply multiple analytical lenses to substantiate their substitution choices, weighing whether a new regulation change opens up an opportunity for substitution or a new asset investment in packaging lines. Examples from various geographies can be used to indicate segments where substitution efforts have already succeeded. For instance, in North America, drink multipacks made of fiber have penetrated the market to a greater degree than in Europe, while in Europe, fiber cups and lids have made real inroads. The British multinational grocery giant Tesco has already been successful in substituting fiber in various applications. Tesco switched from plastic to paper for one of its high-end pasta lines, for example, and saved more than 10 million pieces, or 30 tonnes of plastic. Fiber innovation may get more attention, but significant innovation is occurring in plastics as well. Mars, for example, recently switched to 100% recycled plastic (exclusive of jar lids) for pantry jars for M&M’s, Skittles, and Starburst. The jars use post-consumer resin, made from recycled plastics collected from consumers. This move to 100% recycled plastic incorporates mechanically processed recycled content and will eliminate more than 1,300 metric tons of virgin plastic annually. Finally, successful companies distinguish between which criteria are table stakes and which trade-off criteria can be used to craft an argument for or against substitution. In the category of table stakes, the substrate must be durable and flexible, and it should function in all scenarios. When deciding whether to switch substrates, players evaluate the trade-offs between the total unit cost and the cost to switch substrates alongside the sustainability goals they’re seeking to meet, such as CO2 emissions reductions or recyclability. Key elements of a commercial substitution strategy for a substrate supplier to gain market share Not only do these substitution opportunities present an uncharted territory of potentially unfamiliar applications, but they also require much more significant involvement with brands downstream as well as the ability to support consumer messaging and claims. This puts pressure on the capabilities of the sales teams, whose typical model has been to focus only on the next step in the value chain (i.e., the converter). To defend the existing positions and create markets in new applications, leading suppliers adopt the following approach: They de-average end customers, meaning they split customers into smaller segments with distinct characteristics, needs, and behaviors. They identify sustainability leaders within brands and retailers based on ambition, progress, and consumer claims; they understand for which sub-brand/application substitution is most relevant (e.g., ensure corporate target achievement, enhance the brand promise). They target the roles that matter and engage the correct decision makers beyond procurement whose KPIs are tied to achieving sustainability targets (e.g., brand managers, packaging engineers, heads of sustainability). They develop a clear strategy toward converters, who will continue to remain a critical step in the packaging value chain. They equip the sales team with a compelling value proposition, narrative, and proof points; they showcase how the holistic value proposition (performance, cost, and sustainability) concretely meets the customer packaging needs for target applications. They train the salesforce to directly target brands and retailers, and they set up rapid feedback loops across the salesforce to share and leverage customer insights given the fast-evolving space. The time is now The packaging market is set to undergo fundamental shifts driven by pressures to implement more responsible and sustainable options. Impending regulations and widespread brand commitments, supported by consumer sentiment, are driving demand in the next 5 to 10 years, while the plastic value chain is dealing with multiple headwinds that make creating adequate supply a real challenge. Bain research shows substitution in Europe is likely to accelerate as we near 2030 and companies take action to prepare for the European Union’s new Packaging and Packaging Waste Regulation (PPWR). While the long-term picture is not totally clear, what is clear is that leaders need to prepare now or risk falling too far behind to catch up. Read our 2026 Paper & Packaging Report Download the PDF Explore the report Read the Next Chapter Sustainability: Less Talk and More Action Resilience and Efficiency Don’t Underestimate the Cost of Overcapacity Transforming Maintenance with Artificial Intelligence It’s Time to Rethink Every Link in Your Supply Chain Customer-Led Growth Luxury Packaging: Resolving the Tension Between Creativity and Impact To Make Money, Follow the Money M&A in Paper and Packaging: Bigger but Fewer Deals Battle of the Substrates Sustainability: Less Talk and More Action Chemical Recycling: Plastics Firms Must Move Now or Miss Out

Резюме

Consumers clearly prefer non-plastic packaging, specifically paper and glass, over plastic.
Consumers and regulators are pushing for sustainable alternatives, yet suppliers are struggling to meet the demand for sustainable plastic.
The time is ripe for substrate suppliers to find additional areas for growth and defend potentially vulnerable positions through innovation and alternative substrates.

Between growing consumer awareness of sustainable packaging options, tightening environmental regulations, and new innovations in materials, the past five-plus years in the packaging industry have been turbulent, and market dynamics continue to change rapidly. These various factors create pressures, vulnerabilities, and opportunities depending on what substrate a company is producing or which substrates a brand is choosing between for its packaging.

Executives at brands, retailers, and packaging companies are wrestling with a whole new set of questions: Do we redesign our packaging? Do we make it recyclable? Do we focus on renewable content? Or do we go for reuse? At the same time, should we consider substituting substrates to help achieve our targets for more sustainable packaging portfolios? And so these industry shifts present an interesting opportunity for suppliers offering alternative substrates. Bain’s recent research suggests that a structured and thoughtful approach can be used by various suppliers, whether to identify and defend potentially vulnerable positions or find additional opportunities for growth through alternatives. In any scenario, the time to act is now.

The substrate market

The size of the global consumer packaging market is around 8 trillion units, of which roughly 60% are plastic and 20% are fiber-based solutions, with the remainder shared by other materials such as glass and metal. Nearly 65% of these are food and beverage-related applications.

Plastic has been a dominant material of choice for decades because of its light weight, mechanical strength, chemical resistance, and versatility. Those qualities, combined with its low cost and convenience compared with other substrates, have made plastic a very appealing choice for brands, retailers, and consumers.

While plastic is extremely durable, it was not originally designed with its end of life or disposal in mind. In recent years, regulators, suppliers, brands, retailers, and consumers have begun to scrutinize the environmental impact of discarded packaging—especially issues like marine pollution and microplastics. These challenges prompt many suppliers to ask: Where are our key vulnerabilities? At the same time, both established players and new entrants are exploring another question: Where are the opportunities for growth?

The packaging value chain in flux

Regulators have prioritized the sustainability of plastic packaging, and Europe leads with multiple measures that mandate recycled content in different packaging applications and create incentives for different players in the complex circular ecosystem to improve collection and recycling.

Consumer preferences are also evolving. Recent research by Bain suggests that consumers clearly prefer non-plastic packaging, specifically paper and glass, over plastic (see Figure 1). At the same time, consumers show an awareness of and preference for more sustainable plastic options, and they opt for recyclable, reusable, or recycled plastic options over alternatives (see Figure 2). Finally, an increasing share of consumers show a willingness to pay some premium for packaging made of 100% recycled material.

visualization — Consumers prefer paper or glass packaging materials over plastic

Unfortunately, the system is not yet ready to satisfy the growing consumer demand. For example, even in the European Union, arguably one of the most advanced recycling markets, only about 40% of plastic waste was recycled in 2023, and the majority goes through mechanical recycling, frequently downcycled.

Future scenarios for recycled plastic suggest that there may be a 30% to 40% gap between demand and available supply in 2030 for plastic types such as PP and PE. Consequently, brands and retailers are stuck between a rock and a hard place: Consumers and regulators are pushing for sustainable alternatives, yet suppliers are struggling to meet the demand for sustainable plastic, both in volume and in price. At the same time, producers of other substrates have also focused on innovation. Whether it’s fiber producers investing in better barrier properties or aluminum players creating circular offerings, producers are actively looking for opportunities to gain share in the packaging market.

And while low cost was previously a significant competitive differentiator of plastic, this will change due to the impact of regulation, which may create an opportunity for other substrates to grow their share of packaging applications.

Where can alternative substrates gain ground vs. incumbents?

Suppliers should focus on segments where there is a higher chance to offer products at scale, creating attractive growth that opens opportunities for new packaging line investments. Segments where plastic currently has a high share but will come under substantial regulatory pressure will have higher exposure. Such segments may include cups and lids, containers, boxes, and clamshells—and consequently, these will become potentially interesting opportunities for fiber players. Successful companies, however, also take into account the plastic type and existing recycling infrastructure, since the opportunity for substitution may be lower for segments such as PET bottles, where recycling infrastructure is already reasonably mature.

Leading companies apply multiple analytical lenses to substantiate their substitution choices, weighing whether a new regulation change opens up an opportunity for substitution or a new asset investment in packaging lines. Examples from various geographies can be used to indicate segments where substitution efforts have already succeeded. For instance, in North America, drink multipacks made of fiber have penetrated the market to a greater degree than in Europe, while in Europe, fiber cups and lids have made real inroads. The British multinational grocery giant Tesco has already been successful in substituting fiber in various applications. Tesco switched from plastic to paper for one of its high-end pasta lines, for example, and saved more than 10 million pieces, or 30 tonnes of plastic.

Fiber innovation may get more attention, but significant innovation is occurring in plastics as well. Mars, for example, recently switched to 100% recycled plastic (exclusive of jar lids) for pantry jars for M&M’s, Skittles, and Starburst. The jars use post-consumer resin, made from recycled plastics collected from consumers. This move to 100% recycled plastic incorporates mechanically processed recycled content and will eliminate more than 1,300 metric tons of virgin plastic annually.

Finally, successful companies distinguish between which criteria are table stakes and which trade-off criteria can be used to craft an argument for or against substitution. In the category of table stakes, the substrate must be durable and flexible, and it should function in all scenarios. When deciding whether to switch substrates, players evaluate the trade-offs between the total unit cost and the cost to switch substrates alongside the sustainability goals they’re seeking to meet, such as CO2 emissions reductions or recyclability.

Key elements of a commercial substitution strategy for a substrate supplier to gain market share

Not only do these substitution opportunities present an uncharted territory of potentially unfamiliar applications, but they also require much more significant involvement with brands downstream as well as the ability to support consumer messaging and claims. This puts pressure on the capabilities of the sales teams, whose typical model has been to focus only on the next step in the value chain (i.e., the converter).

To defend the existing positions and create markets in new applications, leading suppliers adopt the following approach:

They de-average end customers, meaning they split customers into smaller segments with distinct characteristics, needs, and behaviors.
They identify sustainability leaders within brands and retailers based on ambition, progress, and consumer claims; they understand for which sub-brand/application substitution is most relevant (e.g., ensure corporate target achievement, enhance the brand promise).
They target the roles that matter and engage the correct decision makers beyond procurement whose KPIs are tied to achieving sustainability targets (e.g., brand managers, packaging engineers, heads of sustainability).
They develop a clear strategy toward converters, who will continue to remain a critical step in the packaging value chain.
They equip the sales team with a compelling value proposition, narrative, and proof points; they showcase how the holistic value proposition (performance, cost, and sustainability) concretely meets the customer packaging needs for target applications.
They train the salesforce to directly target brands and retailers, and they set up rapid feedback loops across the salesforce to share and leverage customer insights given the fast-evolving space.

The time is now

The packaging market is set to undergo fundamental shifts driven by pressures to implement more responsible and sustainable options. Impending regulations and widespread brand commitments, supported by consumer sentiment, are driving demand in the next 5 to 10 years, while the plastic value chain is dealing with multiple headwinds that make creating adequate supply a real challenge. Bain research shows substitution in Europe is likely to accelerate as we near 2030 and companies take action to prepare for the European Union’s new Packaging and Packaging Waste Regulation (PPWR). While the long-term picture is not totally clear, what is clear is that leaders need to prepare now or risk falling too far behind to catch up.