4 Stocks to Watch as Demand for Sustainable Packaging Grows
Watch out for the likes of Veritiv (VRTV), UFP Technologies (UFPT), Sealed Air (SEE) and Berry Global (BERY) as the demand for sustainable packaging c...
As the world battles to reduce the adverse effects on our environment, sustainable packaging is quickly coming to the forefront. Sustainable packaging uses biodegradable and recyclable materials that can mitigate the negative impact on the environment. This form of packaging consumes fewer resources while manufacturing, and helps in reducing carbon dioxide emission.
Consumers around the world are also becoming increasingly aware of the impact of non-recyclable packaging and prefer sustainable options. Per Trivium Packaging’s 2021 Global Buying Green Report, as mentioned in a Food Dive article, 54% of the respondents stated that they take into consideration sustainable packaging while selecting a product. The younger population seems more inclined toward sustainable packaging as the article stated that 83% of consumers of the age of 44 and below are willing to pay more for sustainable packaging compared to 70% of all consumers.
Over the years, the rise of online shopping has driven the need for consumer packaging solutions, and e-commerce companies are quickly adopting sustainable packaging methods to cater to changing needs. E-commerce giant Amazon stated in a report that as of June 2021, it reduced the weight of outbound packaging by over 36% and “eliminated more than 1 million tons of packaging material since 2015.”
The report added that Amazon is committed to making device packaging 100% curbside recyclable by 2023. In fact, Amazon India stated in a separate report in June 2020 that it had eliminated all single-use plastic in packaging across its fulfillment centers.
Reflective of the efforts that both companies, as well as consumers, are making toward adopting sustainable packaging, it is no surprise that the sustainable packaging market is expected to grow ahead. According to a report by Research and Markets, the global sustainable packaging market is estimated to witness a CAGR of 6.77% from 2021 to 2026, as mentioned in a PR Newswire article.
4 Stocks to Keep an Eye On
The rising concerns related to the environment are bringing sustainable packaging to the limelight. Companies and consumers alike are making efforts to utilize sustainable packaging as the way forward and the market looks set to witness growth. This seems then a prudent time to look at companies that stand to benefit from this potential. We have selected four such stocks that carry a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
Veritiv Corporation’s VRTV Packaging segment provides custom and standard packaging solutions. The company curates an extensive collection of recyclable and compostable packaging, cleaning and facility solutions, like the TUFflex recyclable carton sealing tape, among others.
Shares of Veritiv have risen 347.2% year to date and it currently flaunts a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings increased 45.6% over the past 60 days. The company’s expected earnings growth rate for the current year is more than 100%.
UFP Technologies, Inc. UFPT offers display packaging solutions made with molded fiber material which is made from 100% recycled newsprint and is 100% recyclable.
Shares of Zacks Rank #2 UPF Technologies have gained 48.2% year to date. The Zacks Consensus Estimate for its current-year earnings increased 5.2% over the past 60 days. The company’s expected earnings growth rate for the current year is 36.7%.
Sealed Air Corporation’s SEE Food segment offers integrated packaging materials and automation equipment solutions to provide food safety and shelf life extension, among others. The company’s Protective segment provides foam, corrugated, molded pulp, and wood packaging solutions to protect goods in shipping for e-commerce, consumer goods, and other segments. The company is committed to design and innovate 100% recyclable or reusable packaging solutions by 2025.
Shares of Sealed Air have risen 34.4% year to date. The Zacks Consensus Estimate for its current-year earnings increased 1.1% over the past 60 days. This Zacks Rank #2 company’s expected earnings growth rate for the current year is 11.3%.
Berry Global Group, Inc.’s BERY Consumer Packaging International segment offers packaging solutions for consumer and industrial applications in personal care, beverage, and food markets, and so on. The company is working toward making its fast-moving consumer packaging 100% reusable, recyclable, or compostable by 2025. It provides products like green wrapper films which incorporate renewable-source polymer content, betel bio-based polyethylene wrap film, and so on.
Shares of Berry Global have risen 21.1% year to date and it currently has a Zacks Rank #3. The Zacks Consensus Estimate for its current-year earnings increased 1.8% over the past 90 days. The company’s expected earnings growth rate for the current year is 19.2%.
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