The Zacks Paper and Related Products industry faces challenges from declining demand and high costs, driven by the shift to digital communication and inflation. The industry experienced an 8% decline over the past year, contrasting with a 34.7% increase in the Basic Materials sector and a 22.7% rise in the S&P 500. Currently, the industry holds a Zacks Industry Rank of #213, placing it in the bottom 13% of 244 industries.
Despite these headwinds, demand for packaging remains buoyed by e-commerce growth, especially in food and beverage and healthcare markets. The industry’s push towards sustainable and eco-friendly packaging is anticipated to drive long-term growth, as paper is increasingly favored over plastic due to its recyclability. Notable companies like Klabin and Stora Enso may benefit from these emerging trends.
Klabin reported 2025 revenues of R$20.7 billion, a 5% increase, while Stora Enso is focusing on expanding its renewable materials and packaging portfolio. In September 2025, Stora Enso sold 12.4% of its forest assets in Sweden for €900 million, aiming to strengthen its market share in sustainable solutions.
