Who Pays for All of This?

It’s no surprise that PACK EXPO 2026 showcased an array of shiny new attractions. Across the floor we saw state-of-the-art machines, smarter production lines, and AI-enabled everything. But in our conversations over four days, we found that behind each glossy headline was a fundamental business problem that companies are still working to solve: Who pays for compliance?  Who captures the savings from automation? And how do companies manage price amid uneven demand, shifting supply chains, and customers weary of further increases?

1. Sustainability: What are Customers Willing to Pay For? 

We saw an impressive array of innovative technologies at PACK EXPO: robotics, machine vision, and smart sensors. But few were marketed with as much flair as extended producer responsibility (EPR) compliance.

ERP requires the companies that put packaged goods on the market to pay for managing that packaging after use. The fees generally fall on those legally defined producers, often brand owners, rather than the converters that make the packaging, so direct exposure and pricing opportunities differ by company. The effects ripple throughout the supply chain. For packaging manufacturers, cost-to-serve is impacted from multiple angles: compliance support, material traceability, packaging redesign, and customer-specific requirements all add complexity and overhead.

The irony is that this cost pressure also creates an opportunity. EPR programs are putting pressure on packaging economics, but they also give manufacturers an opportunity to defend margin and deepen customer relationships. We will be watching to see how companies decide how much of the added cost to recover in price, and how much value to pass through to win and retain business.

2. Automation and AI: Is Your Cost-to-Serve Still Accurate?

While EPR got the marketing makeover, automation was the star of the show. Physical AI was a big part of that story, enabling robots and equipment to sense conditions, make decisions, and adapt their actions in real time.

As manufacturers race to automate, we want to know whether their cost-to-serve models are keeping pace. In an industry facing sustained margin pressure, the stakes are high. The latest manufacturing innovations offer the potential for meaningful margin gains, and those gains are increasingly expected. But automation brings costs of its own, including equipment, software and service, which may also be sold through recurring subscriptions rather than one-time purchases. As labor costs fall and new types of fixed costs rise, traditional labor-based allocations may no longer reflect the true cost to serve each account. And we don’t expect automation to be a panacea for manufacturers’ trickiest challenges: custom and low-volume work remains difficult to automate.

3. Market Outlook: Can your Commercial Strategy Adapt?

In our conversations, overall market sentiment was cautiously optimistic. We heard that machine purchases (ML) were beginning to pick up, but we also heard that the outlook remains uneven: input costs keep moving, customers are sensitive to further increases, and demand does not always hold when higher costs are passed through.

In response, packaging manufacturers and distributors are pursuing broader structural changes, including nearshoring production and reviewing trade codes and tariff classifications to reduce exposure. Some are also creating distinct supply chains: one focused on tariff-compliant North American networks and another optimized for the Asia-Pacific region, including China.

Alongside these structural measures, companies are adopting new commercial strategies to manage the lag between tariff and input cost changes and corresponding price adjustments. We have seen new strategies employed to mitigate these pressures, including index-linked pricing, tariff clauses, and contractual pass-through provisions. However, companies must be able to anticipate how different customers will respond and aptly gauge the price-volume tradeoffs at play.

What’s Next?

Amid the rapidly evolving technology and market dynamics, key questions remain: Has cost-to-serve kept up, or will new technology be implemented based on last year’s cost assumptions? Companies will be most successful when technology implementation and the commercial infrastructure behind it move in lockstep. INSIGHT2PROFIT helps packaging manufacturers and distributors pair operational innovation with an equally modern and dynamic commercial strategy. PACK EXPO made it clear that now is the time to make sure both are keeping pace.

Unlock Packaging Growth Opportunities with INSIGHT2PROFIT

PACK EXPO highlighted what packaging leaders are focused on now: improving efficiency, navigating cost and material volatility, advancing automation, meeting evolving sustainability expectations, and protecting margins in an increasingly complex market. The companies that will move fastest are those that can translate these trends into clear commercial priorities and measurable financial outcomes.

At INSIGHT2PROFIT, we help packaging businesses turn market insight into action. From pricing strategy and margin improvement to value-based segmentation, cost-to-serve analysis, and growth execution, our team partners with companies to identify opportunities, align stakeholders, and accelerate EBITDA impact.

Contact us to learn how INSIGHT2PROFIT can help your packaging business convert market momentum into profitable growth.