2025 was a year of innovation, evolving consumer demands and intense regulatory upheaval – but what are the factors that will most affect the packaging industry in 2026? DS Smith’s new Managing Director for UK and Ireland Packaging, James Lomax gives us his predictions.
As businesses navigate shifting consumer habits, tighter regulations and an evolving retail landscape, packaging is evolving in tandem - becoming more compact, innovative and connected to the supply chain than ever before. With nearly half of EU consumers looking for sustainability cues in store, packaging remains a key influence on both brand loyalty and operational efficiency.
At the same time, meeting retailer packaging requirements is becoming increasingly complex. Needs vary widely, and as a result, brands and retailers are seeking ways to streamline this complexity without compromising efficiency or sales - a pressure that will only intensify.
So, what does this mean for businesses? Several trends look set to transform the sector in 2026.
Legislation and cost remain front of mind
More than half of global emissions stem from supply chains and packaging is coming under growing scrutiny. The average EU citizen generates nearly 187kg of packaging waste per year - projected to rise to over 220kg by 2030. In response, the EU’s Packaging and Packaging Waste Regulation (PPWR) is introducing strict recyclability thresholds by 2030 and 2038.
Legalisation may look like an added layer of cost, risk and administration, but it’s fast becoming a catalyst for change. More brands and retailers are now using regulatory demands to future-proof their packaging strategies allowing the rules to guide smarter decisions and long-term investment. It signals a clear shift from box-ticking compliance to a more strategic, transformation-led mindset.
Ongoing cost pressures are also driving a shift towards more compact, minimalist solutions designed to meet legislative requirements, cut carbon and eliminate excess.
Building packaging into the supply chain
As e-commerce grows and discounters account for nearly a quarter of grocery spend in Europe, packaging increasingly needs to be designed with the wider supply chain in mind.
Navigating retailer packaging requirements is complex. From high performance transit packs to premium Shelf-Ready Packaging, there’s no one-size-fits-all solution - and there never will be.
Businesses are already seeing the rewards of smarter integration. For example, recent work with a major drinks manufacturer enabled 25% more packs per pallet, reducing carbon emissions by 50 tonnes annually.
In 2026, packaging that supports the supply chain - not just the shelf - will be a competitive advantage.
Experimenting with innovation, purposefully
Despite inflation and supply chain pressures, businesses remain open to innovation - especially when it delivers brand impact and performance. In this context, innovation and sustainability increasingly reinforce one another, as shown by fibre-based packaging developments such as fully recyclable alternatives to shrink wrap for rigid bottles and designs that reduce CO2 emissions by up to 24%, while still performing where it matters most.
Most recently, a trial with a global confectionary business introduced paper-based tubs in UK grocery stores. The packs include QR codes to gather consumer feedback and clear recycling guidance, forming part of a wider test-and-learn approach to reducing virgin plastic and engaging consumers in packaging choices.
Retailers and brands are balancing legislation, inflation, automation, and changing shopper behaviours. Packaging is no longer just about protection or branding, but about delivering impact across emissions, logistics and the customer experience.
As requirements fragment across formats and channels, those who simplify with intent – reducing complexity, focusing innovation where it adds value and using legalisation to build resilience – are likely to lead in 2026.
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