By Dan Felton and Dani Diehlmann
In 2025, the Flexible Packaging Association (FPA) partnered with John Dunham & Associates, a leading economic consulting firm, to assess the economic contributions of the U.S. flexible packaging industry. The resulting comprehensive economic impact study underscores just how vital the industry is to the American economy.
According to the study, the flexible packaging industry is projected to generate $151 billion in total U.S. economic output in 2025, including $51.5 billion directly from flexible packaging manufacturers. Altogether, the industry accounts for roughly 0.5% of the nation’s GDP—a modest percentage with significant underlying value.
The industry supports approximately 398,780 full-time equivalent jobs, including more than 98,000 directly in manufacturing and the rest through a broad network of suppliers and service providers. These workers collectively earn more than $33.4 billion in wages and benefits, reinforcing that flexible packaging is not only essential to product protection but also a key driver of American employment and economic vitality.
FPA’s analysis of U.S. Census data shows that the flexible packaging industry reached an estimated $42.6 billion in sales in 2024, up 2.9% from $41.4 billion in 2023—closely mirroring the U.S. gross domestic product (GDP) increase of 2.8% during the same period.
Despite ongoing global uncertainty, industry profitability climbed to 12.8% in 2024, the second-highest level in FPA’s reporting history, just behind the 2021 pandemic peak of 13%. Volume growth was more measured at 1.8%, reflecting a stable yet competitive landscape.
Over the past decade, the industry has achieved a compound annual growth rate of 3.5%, making it one of the steadiest segments within the U.S. packaging market. Today, flexible packaging represents 20% of the $213.4-billion U.S. packaging industry, ranking second only to corrugated paper.
FPA members project 4.8% growth in 2025, which would bring the market to approximately $44.6 billion—well above the 2.7% inflation rate recorded this past June. However, these forecasts were made prior to the full impact of new federal tariffs, the long-term implications of which remain uncertain. The valuation difference between this market data and the John Dunham & Associates economic impact study reflects differences in methodology.
Industry composition and M&A trends
The flexible packaging sector is composed of roughly 600 converters, with a notable concentration among the largest players:
Top five converters generate 36% of total industry revenue.
Top 10 converters account for 45%.
Top 25 converters represent 54%.
After a period of high M&A activity, the pace slowed in 2024 to 34 domestic transactions, down from a peak of 62 in 2021. Yet, interest remains strong: 11 new companies entered the M&A space in 2024, signaling renewed investor confidence despite higher interest rates.
Survey results reveal a cooling in short-term M&A intentions:
19% of respondents plan acquisitions in 2025 (down from 33% in 2024).
54% expect to pursue deals within 3–5 years (down from 65%).
Key industry challenges
For converters, labor availability remains the top challenge for the second consecutive year. Suppliers, meanwhile, cite growth and access to new materials as their foremost concern.
Pricing concerns also diverge between the two groups:
Converters rank raw material pricing as their second-largest issue.
Suppliers identify pricing to customers as their second-most-critical challenge.
Interestingly, customer pricing did not appear among the top 10 challenges for converters, indicating differing operational priorities. Meanwhile, political uncertainty—absent from the top 10 last year—has surged to become the third-highest concern for both converters and suppliers, reflecting heightened unease around trade policy shifts and regulatory developments.
Last year was another busy year for packaging advocacy and public policy at the state level. While FPA was heavily engaged in several issue areas, including labeling standards, recycled content mandates, per- and polyfluoroalkyl substances (PFAS) bans, and protecting advanced recycling technologies, our highest priority remained extended producer responsibility (EPR). At a pace close to that of 2024, we saw 41 packaging EPR bills across 16 states in 2025. Two of those bills, in Maryland and Washington, that proposed full EPR programs for packaging made it across the finish line, following Minnesota in 2024. FPA publicly supported the Maryland legislation and went neutral in Washington, as both bills, like Minnesota, were more sound and producer-friendly than prior packaging EPR proposals we have seen enacted into law. In other states, Hawaii passed a bill to conduct a statewide recycling needs assessment by 2027, and Maine passed a “fix-it” bill to address some inconsistencies in its packaging EPR law, enacted in 2021 and now being implemented.
States where FPA was also actively engaged in EPR legislation in 2025 that ultimately failed included New Jersey, New York, Massachusetts, Rhode Island, and Tennessee. We know that legislatures in these states, and possibly others, are likely to be aggressive in trying to pass their own versions of packaging EPR. We’re cautiously optimistic that at least some of these states will take a more balanced approach like Maryland, Minnesota, and Washington. Yet, we know others will continue to pursue extremely burdensome and onerous proposals with infeasible material requirements and performance goals that could potentially lead to packaging bans, particularly for flexible plastic packaging. To that end, FPA will continue to be actively engaged on this issue in the states to secure the most favorable outcomes possible for the flexible packaging industry. It is all but impossible at this time of year to accurately predict what states might next pass packaging EPR legislation, but it would not be unreasonable to expect at least two more states to enact related laws between now and the end of 2027.
In 2025, we also remained actively engaged in the ongoing implementation and rulemaking for the packaging EPR laws enacted in Maine and Oregon in 2021 and California and Colorado in 2022. There was significant activity in all these states in 2025, with Oregon’s law going into full effect this past July and Colorado going into full effect in January 2026.
On state bills related to toxic chemical bans, in particular targeting PFAS in packaging, we played a strong role in California Governor Newson vetoing a bill that would have banned the sale of specific products containing intentionally added PFAS, such as cleaning products, cookware, dental floss, juvenile products, food packaging, and ski wax, beginning January 2027. FPA, in coalition with others, was also successful in stalling a bill in California that would have banned food packaging containing any intentionally added bisphenols or phthalates beginning January 2027. Anticipating continued legislative focus on these issues in 2026, FPA will continue to oppose overburdensome and unreasonable additive, chemical, and ingredient restrictions or thresholds in packaging; ensure that bans apply only to intentionally added PFAS and other chemicals; and caution lawmakers about any potential materials ban for PFAS in recycled content.
In 2025, the cadence on bills related to labeling—primarily for recyclability, but also for compostability and reusability—was consistent with the past few years. No additional bills were signed into law since California’s “truth-in-labeling” law (SB 343), targeting certain statements, and the use of the “chasing arrows symbol” or variations was enacted in 2021 and will now go into full effect this October. The clock is now ticking for flexible packaging manufacturers and brand owners to consider whether they may need to update packaging labels, particularly the How2Recycle® store drop-off label for polyethylene structures.
FPA believes it is vitally essential that labeling for recyclability, just like nutritional information and other product communication, be uniform throughout the United States. Labeling based on individual state standards will be devastating to commerce for products people use every day. Further, it will only create more consumer confusion about recycling as people purchase and dispose of goods across state lines. If you want more recycling, more—not less—harmonization is needed, and these state one-off bills do the opposite. In this vein, FPA will continue to support the introduction and passage of federal legislation to create a uniform federal structure for when compostable, recyclable, and reusable claims are made for product packaging, and that will preempt inconsistent state laws that attempt to regulate these types of claims.
FPA firmly believes that a suite of solutions is necessary to address the lack of collection, processing, and end markets for circularity in flexible packaging. We therefore continue to advocate for legislation enabling and funding advanced recycling, including chemical recycling, to be included in that suite. While 25 states now have laws on the books protecting advanced recycling technologies, we must also be wary of potential bans on advanced recycling. We saw at least four states—Maryland, Oregon, Rhode Island, and Vermont—introduce standalone legislation in 2025 to ban advanced recycling, but none of those bills advanced. Particularly for food, health, and medical packaging, FPA believes advanced recycling is critical to meeting post-consumer recycled (PCR) content mandates. While the flexible packaging scope of such PCR mandates in the U.S. generally applies only to plastic bags in some states (e.g., New Jersey and Washington) right now, we believe we will continue to see legislation proposed in California and other states to expand the scope beyond plastics to other forms of flexible packaging. To that end, FPA will continue to be very actively engaged on this issue, as well.
Although 2025 began with a tumultuous start as President Donald Trump began an unprecedented shakeup of the federal government, the impact on day-to-day federal activity affecting the flexible packaging industry, outside of the ongoing significant tariff and trade issues, was less severe. As is typical for our industry, the real legislative and regulatory activity on our challenges in 2025 continued to be at the state level. That said, FPA did testify in July before the U.S. House of Representatives Energy and Commerce Committee Subcommittee on Environment at a hearing on recycling, and we continued to support federal legislation that would provide some grant funding to the states for recycling. We also supported legislation that would establish a targeted investment tax credit for recycling infrastructure. █
Dan Felton is president and CEO of the Flexible Packaging Association.
Dani Diehlmann is vice president of communications at the Flexible Packaging Association.
