Chat with this content: Summary, Analysis, News...
Share on Reddit
Huhtamäki: From Finnish Candy Factory to Global Packaging Powerhouse
A Story of Radical Reinvention
Picture a sixteen-year-old boy trudging through the frozen expanse of Siberia in 1917, having narrowly escaped arrest during the Bolshevik Revolution. He would eventually reach Japan, traverse the Pacific, and return home to Finland with a dream of making candy. That young man was Heikki Huhtamäki, and the confectionery business he founded in an old barn would, a century later, become one of the world's leading packaging companies—a transformation so complete that virtually nothing remains of the original enterprise except the founder's name.
Today, around 18,000 Huhtamäki professionals operate in 36 countries and 101 locations around the world. In 2024, net sales totaled EUR 4.1 billion. The company that once produced chocolate bars and gummy candies now manufactures cups for your morning coffee, cartons for your eggs, and flexible packaging for countless consumer products. The journey from candy to cups involved selling off nearly everything the company once held dear—pharmaceuticals, confectionery, industrial packaging—in what amounts to one of the most disciplined corporate transformations in Nordic business history.
The central question for investors is this: How did a baker's son's confectionery venture become a global packaging powerhouse, and what does its transformation reveal about sustainable competitive advantage in an industry increasingly shaped by environmental regulations and shifting consumer preferences?
The Siberian Adventure: A Founder's Improbable Journey (1900-1920)
Huhtamäki traced its origins to the village of Kokkola in Western Finland, where Vilhelm Huhtamäki operated a bakery and confectioner's shop. Vilhelm had been somewhat of a world traveler, having worked in the United States, as well as in Norway and Sweden—a trait inherited by his eldest son, Heikki, who became a confectioner's apprentice in St. Petersburg in 1917. Born in 1900, Heikki Huhtamäki became caught up in the Bolshevik Revolution, and eventually crossed the continent through Siberia and to Japan, before ultimately returning to Finland.
The details of Heikki's harrowing journey read like adventure fiction. The young man, who was born into a baker family, had gone to the Russian Empire at the age of 16 to study caramel manufacturing, but was arrested and sent to Siberia during the revolution. How exactly he escaped and made his way east remains one of those extraordinary personal histories that founders rarely repeat in detail but that clearly shaped their worldview. Heikki emerged from the experience with both a confectionery education and a restless ambition that would define his entire career.
After his return, Heikki published a book about his adventures, then set up his own confectionery business, backed by his industrialist father-in-law, in 1920. Huhtamäki, as the company came to be called, quickly grew into one of the leading candy companies in Finland.
Inspired by his journey, in 1920 Huhtamäki founded a candy factory in an old barn located in rural Western Finland. In the beginning, O/Y Huhtamäen Tehtaat made 46 different types of candy mostly by hand and produced wooden boxes and containers for these delicacies. In its first year, Huhtamäki employed 61 workers and quickly expanded by opening a sales office in Helsinki in 1921, laying the groundwork for regional distribution of its sweets.
The timing proved fortuitous. A hundred years ago, the disposable income of Finnish people had risen considerably, thanks to the economic growth stemming from the lumber industry. Finland had just declared independence from Russia in 1917, and a new generation of consumers with money to spend created demand for the small luxuries that confectionery represented. Heikki Huhtamäki positioned himself at the intersection of technical expertise gained abroad and a domestic market hungry for sweets.
What distinguished the young founder was his understanding—learned through making candy—that packaging mattered almost as much as the product itself. His motto is said to have been "Well packaged – half sold." This insight, seemingly simple, would prove prophetic six decades later when the company bet its entire future on packaging.
Building the Conglomerate: From Candy to Everything Else (1920-1988)
The early years tested both Heikki and his company. The effects of the Great Depression reached Finland, causing economic difficulties also for Huhtamäki. However, merging with Hellas, another confectionery manufacturer, in 1932, saved the company for the time being.
What happened next reveals something fundamental about Heikki Huhtamäki's character—and perhaps explains how his company would later prove capable of such radical reinvention. Heikki wanted to broaden his horizons also to other areas of the food industry. This led to a surprising move: he resigned as the CEO of Huhtamäki, sold his shares and leaped to Ipnos, an industrial bakery, with some trusted fellows. Under his leadership, Ipnos expanded its offering from bread to confectionery—growing to compete with Huhtamäki-Hellas.
This is extraordinary. The founder left his own company to build a competitor, then after a series of events, Heikki assembled his assets and bought back Huhtamäki-Hellas. In 1940, Heikki Huhtamäki gathered all his holdings under the name Huhtamäki-yhtymä Oy. The founder had demonstrated that he valued growth and opportunity over sentimentality—a corporate culture that would prove essential to later transformations.
The war drove Huhtamäki to supply the army with food and develop substitutes. Yet, optimism about the future prevailed. The company emerged from World War II positioned for diversification.
The Birth of Packaging as a Business
Huhtamäki's entry into the packaging market began as an offshoot of its confectionery and foods business, as the company built up packaging operations in order to support its growing array of food and nonfood products. Into the early 1960s, however, Huhtamäki's packaging division, which produced both paper and metal-based packaging for the company's products, remained dedicated to serving the company's in-house needs.
In 1960, Huhtamäki acquired Mensa, a Finnish paper food container producer, as a step toward full-fledged packaging operations; Huhtamäki also listed on the Helsinki Stock Exchange that same year. This acquisition marked a subtle but critical turning point. What had been an internal function—making containers for your own candy—became a potential standalone business.
In 1962, the company formed a dedicated packaging business, Pakkaus Oy. In 1965, the company formed Polarpak and began production of thermoform plastics, which led to its exit from the metal packaging market.
The pharmaceutical business also expanded dramatically. The Group set up its own pharmaceutical factory, which was at the same time the first pharmaceutical factory in Finland. In 1961, Leiras launched birth control pills. The contraceptive business, in particular, would grow to become a significant profit center and position Huhtamäki at the forefront of a social revolution in women's health.
The founder of the company, Heikki Huhtamäki, died in 1970. Over the last decade, he was no longer involved in the management of the company.
In the 1970s, Huhtamäki-yhtymä Oy was a conglomerate that operated in approximately 20 different business sectors. By the 1940s, the company had evolved into a holding company for an increasingly varied range of companies, including clothing, advertising, and, in later decades, electronics and heavy engineering.
By the late 1980s, Huhtamäki was a textbook conglomerate of the era. The company grew in size over the years, eventually becoming an industrial conglomerate with diverse product lines that included ladies' clothing, pharmaceuticals and electronic components.
The Leaf Acquisition & Peak Conglomerate (1983-1989)
If the founding story represents Huhtamäki's romantic past, the Leaf acquisition represents the apex of its conglomerate ambition—and the moment before its dramatic reinvention.
Candy and confectionery remained a major part of the group's businesses, particularly with the acquisition of the United States' Leaf Candy Company, as well as two other U.S. candy makers, in 1983. Into the early 1990s, confectionery continued to account for as much as 60 percent of Huhtamäki's sales.
In 1983, the Leaf Candy Company in Illinois was purchased by Huhtamäki Oyj of Helsinki, Finland, and merged it with Phoenix Candy (the maker of Now and Later) and another candy company it had acquired, all under the Leaf name. Huhtamäki acquired the Donruss trading card division of General Mills at about the same time and merged it into Leaf.
The acquisitions continued at an aggressive pace. In 1988, Hollywood Brands, maker of Payday and Zero, was purchased from Sara Lee by Huhtamäki and became part of Leaf, Inc. In 1989, the Heath bar was purchased by Leaf.
Through Leaf, Huhtamäki had succeeded in building a position for itself among the global top ten confectionery companies, with particular strength in the non-chocolate and chewing gum categories. By the 1990s, Leaf had become one of the world's top ten confectionery companies; it was especially strong in non-chocolate products such as pastilles and chewing gum and by 1993, Leaf was the fourth largest candy producer in North America.
Think about what Huhtamäki owned at this point: Jolly Ranchers, Whoppers, PayDay, Heath bars, Milk Duds—iconic American candy brands. The Finnish company had become a major player in the U.S. confectionery market, a remarkable feat for a firm from a country of five million people.
By the late 1980s, Huhtamäki oversaw a widely diversified array of some 20 separate businesses, each operating under its own name.
Yet beneath the surface of apparent success, the conglomerate structure was becoming problematic. None of the individual businesses had achieved true market leadership. The pharmaceutical division faced legal challenges in the American market. The confectionery business, while large, competed against giants with deeper pockets. And the packaging operations, while profitable, remained a supporting player in the corporate portfolio.
The Great Transformation: Focus on Packaging (1989-2001)
This is the critical inflection point that fundamentally changed the company's trajectory.
The Peltola Era Begins
The arrival of Timo Peltola as CEO in 1989 signaled the start of a new era for Huhtamäki. Peltola set out to refocus the company as a global leader in a narrower array of industries. The company began selling off its holdings, and by the early 1990s had refocused itself around a triple core of confectionery under Leaf, pharmaceuticals under Leiras, and packaging.
The fast food culture spread in Europe, raising the demand for different kinds of packaging. In 1989, the name Hellas was changed to Leaf and the Group's pharmaceutical companies were named Huhtamäki Oy Leiras. The pharmaceutical wholesaler was sold. Timo Peltola took over as managing director.
In 1995, the company had three business areas: pharmaceuticals, the confectionery industry and packaging. It was not easy to decide which area to focus on. The solution was influenced by the fact that the product liability of contraceptive products caused difficulties for the pharmaceutical industry in the United States and that the confectionery industry had not managed to become the market leader in the sector.
The strategic analysis was brutally honest: Huhtamäki was good at many things but dominant in none. The candy business faced entrenched competition from Hershey, Mars, and others. The pharmaceutical business, while profitable, exposed the company to litigation risk in the critical U.S. market. But packaging—specifically consumer packaging—offered something different: a fragmented industry ripe for consolidation, strong customer relationships, and less headline-grabbing risks.
The 1996 Strategic Pivot
In 1996, Huhtamäki took the decision to restructure the company entirely around its packaging operations. In that year, the company sold off its Leiras pharmaceutical business to Germany's Schering AG. That sale was quickly followed by the breakup of the Leaf candy business into two halves, consisting of Leaf's North American operations on one side, and its European and Asian business on the other. The former was then sold to Hershey in the United States, while The Netherlands' CSM acquired the latter.
Huhtamaki Oy sold Leiras Oy, its pharmaceutical unit, to the German firm Schering AG. Huhtamaki had announced that it had plans to leave the pharmaceutical business and to concentrate on the confection and packaging sectors. Leiras had a turnover of 191 million U.S. dollars last year, equaling 11 per cent of Huhtamaki's total turnover of around 1.76 billion U.S. dollars. The sale price was 318 million U.S. dollars including Leiras's debts.
In a $330 million deal, Hershey Foods U.S.A. completed its acquisition of Leaf's North America confectionery operations. Hershey would manufacture, market and distribute Leaf's North American confectionery brands, including Jolly Rancher, Whoppers, Good & Plenty, PayDay, Heath, Milk Duds and Xylifresh gum.
Consider what Peltola was doing: selling the company's historical core business, the candy operations that bore the founder's legacy, and divesting the pharmaceutical division that had generated steady profits. In 1996 alone, Huhtamaki sold 40 per cent of its business operations.
With a war chest approaching EUR 1 billion, Huhtamäki now set out to remake itself as a global packaging leader. The company began an extended acquisition campaign that more than tripled its revenues and made it a clear-cut leader in several niche categories.
The Acquisition Spree
In the same year, the company acquired 14 packaging companies. In 1997, Polarcup accounted for approximately half of the Group's turnover, more than 3 billion Finnish markkas.
In 1998, Polarcup was operating in 30 countries and was the market leader in Europe and Asia-Pacific. In March 1998, Huhtamaki acquired the cardboard packaging and systems operations from Sealright in the United States, as well as their operations in Australia. Sealright was the market leader in ice cream packaging in the United States.
The Van Leer Acquisition: A Transformative Merger
The capstone of Peltola's transformation came in 1999 with a deal that dwarfed all previous acquisitions.
In May 1999, Van Leer announced that it was involved in a new, large-scale acquisition: the company was being taken over by Finnish packaging producer Huhtamaki. Clashes over this move would lead to the sudden departure of Willem de Vlugt from the Van Leer leadership.
By the end of July 1999, the proposed takeover had transmuted into more of a merger than an acquisition. The two companies would join operations, maintaining headquarters in Finland and The Netherlands. The proposed company, to be named Huhtamaki Van Leer, would become the world's eighth largest consumer and industrial packager, with revenues of more than 2.8 billion Euros per year.
In 1999, Huhtamäki acquired Van Leer Packaging for about $1 billion.
Through 4P and other subsidiaries, including the Chinet brand, Van Leer had gained a leading position in the worldwide consumer packaging and printed consumer packaging markets. The Chinet acquisition was particularly valuable—a premium consumer brand in disposable tableware that would become a cornerstone of Huhtamaki's North American business.
Newly merged Finnish-Dutch packaging group Huhtamaki Van Leer increased pro forma EBIT 16% to EUR 191m in 1999, net earnings by 29% to EUR 80m. Pro forma sales rose 5% to EUR 3bn. Sales of consumer packaging totalled EUR 2bn.
Divesting Industrial Packaging
But Peltola wasn't finished reshaping the portfolio. Van Leer had brought substantial industrial packaging operations—steel drums, intermediate bulk containers, and other products for chemicals and petroleum companies. These didn't fit the consumer-focused strategy.
European packaging giant Huhtamaki Van Leer planned to sell its industrial packaging division (Van Leer Industrials), including all liabilities, to Greif Bros. Corporation. This completed the Finnish group's reorientation towards consumer packaging specialities following the merger of Huhtamaki and Van Leer in 1999.
The business being sold produced fibres from steel, plastics and wood pulp, along with transport packaging for bulk solids and closure systems. With sales of EUR 921m in 1999, it accounted for nearly 30% of Huhtamaki's overall turnover.
By October 2000, the company had divested almost half of Van Leer's operations. For example, the Van Leer Industrial group, which manufactures industrial packaging, was sold to Greif Brothers in the United States.
In 2001, the company changed its name back to Huhtamäki Oyj.
By the end of the transformation, Huhtamäki had undergone perhaps the most comprehensive corporate reinvention in Finnish business history. The company that in 1988 derived 60% of its revenues from candy and operated in 20 different industries had become a focused packaging specialist with leadership positions in molded fiber, foodservice disposables, and flexible packaging.
Consolidation & Leadership Transitions (2004-2020)
In 2004, Peltola retired at the age of 58. Heikki Takanen took over as CEO in September.
CEO Jukka Moisio started in April 2008. The company decided to focus on food packaging, cups, egg cartons and North America. Between 2009 and 2014, eight companies were sold.
Under Moisio's leadership, the portfolio optimization continued. The financial crisis of 2008-2009 tested the new business model, but the consumer packaging focus proved relatively resilient—people still needed to eat and drink, and food producers still needed packaging.
The period from 2008 to 2020 was characterized by steady margin improvement, geographic expansion into emerging markets, and a growing emphasis on sustainability. The company invested in facilities across India, China, Russia, and other high-growth regions, positioning itself to serve both global FMCG companies and local brands.
Huhtamaki has come a long way since our founder, the young visionary Heikki Huhtamäki, set up a confectionery factory in a barn in rural Finland a hundred years ago. Since then, we have followed in our founding father's footprints, by continuously taking on new challenges to become a company that delivers sustainable packaging solutions to billions of consumers around the world.
By 2020, Huhtamäki celebrated its 100th anniversary as a company completely unrecognizable from its origins. What had begun as a candy factory now manufactured cups, plates, egg cartons, flexible packaging, and molded fiber products for customers across the globe.
The Elif Acquisition & Emerging Markets Strategy (2021)
Another key inflection point in recent history.
Huhtamaki entered into an agreement to acquire Elif Holding A.Ş., a major supplier of sustainable flexible packaging to global FMCG brand owners, with operations in Turkey and in Egypt. With this acquisition, Huhtamaki reinforced its position as a leading flexible packaging company in emerging markets and strengthened its existing flexible packaging business in attractive consumer product categories.
The net sales of the acquired business were approximately EUR 163 million (USD 195 million) in 2020. Elif employs approximately 1,500 people in its two manufacturing locations in Istanbul, Turkey and Cairo, Egypt. The cash free debt free purchase price was EUR 412 million (USD 483 million).
Founded in 1972, Elif, which has operations in Turkey and in Egypt, is a trusted long-term partner for major global consumer brand owners in Europe, Middle East and Africa.
What made Elif particularly attractive was its sustainability profile. Specialized in high-quality sustainable flexible packaging, Elif uses both post-industrial and post-consumer recycled polymers as raw materials. It also has an advanced system of collecting and utilizing production scrap from both its own as well as from customer locations. More than 90% of Elif's current product portfolio is recyclable.
With the acquisition, Huhtamaki expanded its flexible packaging manufacturing footprint into Turkey, one of the top future growth countries. With the vast majority of Elif's product range already recyclable or compostable, the acquisition is also a significant milestone in reaching Huhtamaki's ambition to have 100% of its products designed to be recyclable, compostable or reusable by 2030.
The Elif deal represented a new phase of strategic thinking: acquisitions that simultaneously added scale in high-growth regions, enhanced sustainability credentials, and brought proprietary technology. Unlike the Leaf acquisition decades earlier—which was about size and market share—Elif was about capabilities and positioning for a regulatory future that would increasingly penalize companies without sustainable product portfolios.
Sustainability & Single-Use Plastics: Existential Threat or Opportunity?
This is the most critical strategic challenge facing the company.
The Regulatory Wave
The EU is acting against plastic pollution. From 3 July 2021, single-use plastic plates, cutlery, straws, balloon sticks and cotton buds cannot be placed on the markets of the EU Member States.
On July 2, 2021, the Directive on Single-Use Plastics took effect in the European Union. The directive bans certain single-use plastics for which alternatives are available. A "single-use plastic product" is defined as a product that is made wholly or partly from plastic and that is not conceived, designed, or placed on the market to be used multiple times.
Given its wide reach and high targets, the directive can be described as a "market disruptor", since it forces a prioritization of proper management of plastic products and waste across multiple product categories and an entire region. As a result, the SUPD has accelerated governments' and businesses' discussions about the shift from a linear take-make-waste production model to one that is more circular in nature.
For Huhtamäki, these regulations present a double-edged sword. On one hand, the company's products—disposable cups, plates, and containers—are precisely the items facing increased scrutiny. On the other hand, its investments in fiber-based products, paperboard solutions, and recyclable flexible packaging position it to benefit as customers shift away from traditional plastics.
The U.S. Market Response
Investment in Hammond, Indiana ramped up during the year. This investment has supported the market's increased demand as foam packaging is being banned in a large number of U.S. states. The second large investment is for increasing capacity in folding carton products. Huhtamaki is expanding its factory in Paris, Texas, with the ramp-up starting in early 2025. The increased foodservice capacity will be key to servicing the growth of existing customers and a growing list of up-and-coming customers throughout the Southern and Midwestern states.
Huhtamäki's Strategic Response
Huhtamaki is committed to achieving carbon neutral production and designing all our products to be recyclable, compostable or reusable by 2030.
As part of its 2030 Strategy and sustainability commitments, Huhtamaki has set a series of climate change mitigation targets, which have been validated and approved by the Science Based Targets initiative. Through these science-based targets Huhtamaki commits to reduce absolute scope 1 and 2 GHG emissions 27.5% by 2030 from a 2019 base year; to reduce absolute scope 3 GHG emissions from end-of-life treatment of sold products by 13.5% within the same timeframe; and that 70% of its suppliers by spend covering purchased goods and services will have science-based targets by 2026.
To capitalize on this momentum, the company's updated 2030 strategy focuses on four areas: scaling up its profitable core businesses, developing its blueloop™ sustainable innovation in partnership with customers, driving world-class operational performance across its global footprint and investing in strategic capabilities to drive its transformation journey.
The sustainability strategy appears to be converting a potential existential threat into a competitive advantage. By moving early toward fiber-based and recyclable solutions, Huhtamäki positions itself as the packaging partner of choice for FMCG companies facing their own sustainability pressures. When Starbucks needs compostable cup lids, Starbucks confirmed that Huhtamaki was one of its partners on compostable cups for cold beverages; Huhtamaki provided molded fiber lids.
Current Business Model & Financial Performance (2024-2025)
Business Segments
Huhtamaki announced on February 14, 2025 of separating the Fiber Foodservice Europe-Asia-Oceania business segment into two distinct business segments, Fiber Packaging and Foodservice Packaging. The change took effect on April 1, 2025. The company's business is organised into four segments: Foodservice Packaging, North America, Flexible Packaging and Fiber Packaging.
"We are separating our Fiber Foodservice business into two distinct business segments to empower our teams to serve our customers more efficiently. This strategic move positions us for profitable growth by giving accountability to the businesses and increasing speed of execution in a changing business landscape. It will support our goal of being the first choice in sustainable packaging", says Ralf K. Wunderlich, President and CEO of Huhtamaki.
Foodservice paper and plastic disposable tableware, such as cups, is supplied to foodservice operators, fast food restaurants, coffee shops and FMCG companies. The segment has production in Europe, Africa, Middle East, Asia and Oceania.
The North America segment serves local markets in North America with retail tableware, foodservice and consumer goods packaging. Huhtamaki is an industry-leading manufacturer of packaging for consumer-packaged goods, as well as tableware, cups, folding cartons, containers, carriers, trays and serviceware for the foodservice industry and retail market. The company offers a wide range of packaging for foodservice operators and branded consumer products. It is the proud maker of Chinet®, one of the most recognized premium retail disposable tableware brands. The segment has production in the United States and Mexico.
Flexible packaging is used for a wide range of pre-packed consumer products. Huhtamaki offers light and innovative flexible packaging materials, pouches and labels for food and drink, coffee packaging, pet food packaging, barrier packaging, retort pouches and packaging for pharmaceutical products. The company serves global and local brands across Europe, Asia, Oceania, and South America.
Recent Financial Performance
For Huhtamaki, 2024 was a solid year, with improved safety performance and increased profitability. In the first half of the year, demand was muted in many markets. The second half saw gradual recovery, with variations across categories and regions. Demand for pre-packed food, especially egg packaging, increased, and flexible packaging saw gains in a volatile market. Food on-the-go volumes remained subdued, particularly for coffee chains, due to high prices caused by inflation. The North American foodservice market performed better than other regions.
For the full year 2024, comparable net sales remained at the previous year's level. Sales prices decreased due to a pass-through of lower raw material prices, while volumes increased slightly. Despite the muted topline development, adjusted EBIT increased by 6% and the margin increased to 10.1%. Free cash flow reached 216 million, driven by higher profit and lower investments.
Cost Savings Program
Throughout the year, Huhtamaki made progress on strategic priorities. The main focus was on improving competitiveness. Key initiatives were built around a program to achieve EUR 100 million in cost savings. The program contributed to performance throughout the year, and achieved savings of approximately EUR 76 million.
The cost savings were essential to compensate for inflation and adverse currency impacts. The company expects to achieve the EUR 100 million savings target and close the program ahead of schedule.
Dividend Track Record
Based on positive financial development, the Board of Directors proposes a dividend of EUR 1.10 per share. If approved, this would mark the 16th consecutive year of dividend growth, highlighting the long-term success of the business.
New Leadership
Huhtamaki appointed Ralf K. Wunderlich (58) as President and CEO effective on January 15, 2025 when the Company's previous President and CEO Charles Héaulmé stepped down. Charles will be available as needed to secure smooth transition until July 2025.
Wunderlich has been acting as a non-executive director at several companies, including packaging manufacturer Klöckner Pentaplast, and he has been a member of Huhtamaki's Board of Directors since 2018. Previously, he worked at Amcor from 2010 to 2016 as president and managing director for flexibles in the Asia Pacific region. Prior to that, he was at Linpac Group for about a year. From 1993 to 2007, Wunderlich held various positions at Rio Tinto Alcan, most recently as president of Alcan Packaging for global tobacco.
"Ralf K. Wunderlich has a wealth of experience in leading international packaging businesses, outstanding operational experience and capability to bring high-performing teams together with great results. He has a solid focus on growing businesses, both organically and through M&A. Huhtamaki's Board of Directors is confident that Ralf has all capabilities to take Huhtamaki to the next level in its strategic journey to a leading sustainable packaging company," said Pekka Vauramo, Chair of the Board.
Competitive Landscape & Industry Analysis
Key Competitors
Key competitors include Graphic Packaging, Dart/Solo, Reynolds/Pactiv, Koch/Georgia Pacific, Novolex, Berry Plastics, Westrock, Sabert, Gen Pak, AJM, and Aspen. Huhtamaki's competitive advantages include molded fiber competence and scale, the Chinet brand, 21st century new cup capacity, ice-cream systems, and capability for customer promotions.
Huhtamaki's top 11 competitors are Amcor, Sonoco, Berry, Artekno, Koepala, Crown, Mondi, Celluloses De La Loire, Cellulopack, KEYES and Doublehplastics. Together they have raised over 8.7B between their estimated 155.6K employees. Huhtamaki has 17,794 employees and is ranked 6th among its top 10 competitors. The top 10 competitors average 17,342 employees. Amcor is Huhtamaki's #1 competitor. Amcor generates 315% of Huhtamaki's revenue.
The global flexible packaging market size was valued at USD 210.62 billion in 2023 and is projected to reach USD 238.91 billion by 2029, growing at a CAGR of 2.12% during the forecast period. By Product: The bags & sacks segment holds the most significant segmental market share.
Porter's Five Forces Analysis
| Force | Assessment | Key Observations |
|---|---|---|
| Supplier Power | Moderate | Raw materials (paper pulp, plastics, resins) are commoditized, but sustainability-certified materials create some supplier leverage. Huhtamaki's global scale provides negotiating power. The company's vertical integration in some areas (e.g., fiber processing) further reduces supplier dependence. |
| Buyer Power | High | Major customers are global QSR chains (McDonald's, Burger King, Starbucks) and large CPG companies with significant bargaining power. Customer concentration is a risk, but switching costs exist due to customization requirements, quality certifications, and supply chain integration. Long-term contracts provide some protection. |
| Competitive Rivalry | High | Fragmented market with regional competitors; consolidation ongoing. Price competition is intense, but differentiation comes through sustainability credentials, innovation capabilities, and global footprint. The shift toward sustainable packaging is reshaping competitive dynamics. |
| Threat of New Entrants | Low-Moderate | High capital requirements for manufacturing facilities, established customer relationships, and complex regulatory compliance create barriers. However, innovative sustainable packaging startups pose niche threats. Incumbents' R&D in sustainable materials creates additional moats. |
| Threat of Substitutes | Moderate-High | Reusable packaging systems, returnable container programs, and "bring your own container" trends pose existential questions. Regulatory bans on certain formats accelerate substitution. However, Huhtamaki's fiber and paper-based solutions are themselves substitutes for plastic products. |
Hamilton's 7 Powers Analysis
| Power | Applicability | Analysis |
|---|---|---|
| Scale Economies | ✅ Strong | Global manufacturing footprint across 36 countries creates cost advantages through procurement leverage, capacity utilization, and distribution efficiency. Smaller competitors cannot match the cost structure in serving global customers. |
| Network Effects | ❌ Limited | Packaging is not a network business. Value does not increase with additional users in the traditional sense. Customer relationships are valuable but not network-driven. |
| Counter-Positioning | ✅ Moderate | Early moves into sustainable packaging create counter-positioning against traditional plastic-focused competitors who face stranded assets. Legacy players hesitate to cannibalize existing plastic product lines. |
| Switching Costs | ✅ Moderate | Custom packaging designs, quality certifications (food safety compliance), supply chain integration, and co-development relationships create friction for customers considering switches. However, these are not prohibitive. |
| Branding | ✅ Moderate | The Chinet® brand is valuable in retail tableware. B2B relationships with major foodservice chains create reputation value. "blueloop™" sustainable innovation branding is building recognition among sustainability-focused customers. |
| Cornered Resource | ❌ Limited | Raw materials (paper, plastic resins) are commodity-like. No proprietary resource controls. However, proprietary technologies in molded fiber and barrier coatings provide some advantage. |
| Process Power | ✅ Moderate | Decades of experience in complex manufacturing processes, quality control systems, and supply chain management create operational advantages. The 2024 cost savings program (EUR 76 million achieved) demonstrates ongoing process optimization. |
Investment Considerations: Bull and Bear Cases
Bull Case
Sustainability Tailwinds: The global shift away from single-use plastics creates demand for exactly what Huhtamaki excels at—fiber-based packaging, recyclable flexible packaging, and paperboard solutions. The company's commitment to 100% recyclable, compostable, or reusable products by 2030 aligns with regulatory trends.
Stable Customer Base: Major foodservice chains and FMCG companies need reliable packaging partners. Switching costs, while not insurmountable, are meaningful. Customer relationships spanning decades provide recurring revenue.
Geographic Diversification: Operations across 36 countries provide natural hedging against regional economic downturns. Emerging market exposure (Turkey, Egypt, India, China) offers growth potential as per-capita packaging consumption rises.
Dividend Growth Track Record: 16 consecutive years of dividend increases demonstrates commitment to shareholder returns and confidence in cash generation.
New Leadership with Clear Focus: Wunderlich's operational experience and focus on "accelerating growth through all levers, disciplined capital allocation as well as increased accountability and speed of execution" suggests an emphasis on profitability improvement.
Bear Case
Structural Demand Questions: The "bring your own container" movement and reusable packaging systems could fundamentally undermine demand for disposables—sustainable or not. If consumer behavior shifts toward reuse rather than better single-use options, the entire industry faces contraction.
Raw Material Volatility: Paper pulp and plastic resin prices fluctuate significantly. While pass-through mechanisms exist, they operate with lags that can compress margins during rapid cost increases.
Customer Concentration Risk: Dependence on major QSR chains and large CPG companies means that losing a significant customer could materially impact results. These customers also have substantial bargaining power.
Competition Intensifying: Larger players like Amcor (3x Huhtamaki's revenue) have greater scale. Smaller, sustainability-focused startups may capture innovation-oriented customers.
Execution Risk in Sustainability Transition: Converting the entire product portfolio to sustainable materials while maintaining margins and quality is operationally complex. R&D investments may not yield expected returns.
Key Performance Indicators to Monitor
For investors tracking Huhtamaki's ongoing performance, three metrics deserve particular attention:
1. Adjusted EBIT Margin
The company's 10.1% adjusted EBIT margin in 2024 reflects the success of cost savings programs and operational improvements. This metric captures the business's fundamental profitability independent of capital structure and one-time items. Sustained margin expansion would validate the focus on "world-class competitiveness."
2. Comparable Net Sales Growth (Volume Component)
Because pricing can fluctuate with raw material pass-throughs, the volume component of sales growth is more informative about underlying demand. Positive volume growth indicates market share gains and structural demand; negative growth raises questions about competitive positioning or category headwinds.
3. Sustainability-Aligned Product Mix
The percentage of products that are recyclable, compostable, or reusable measures progress toward the 2030 goal. This is both a compliance metric (staying ahead of regulations) and a competitive positioning indicator. Customers increasingly require sustainable options, and the company's ability to deliver them determines its relevance.
Conclusion: The Art of Knowing What to Keep
The Huhtamaki story is ultimately about the discipline of focus. The company that Heikki Huhtamäki founded in 1920 no longer makes candy, doesn't sell pharmaceuticals, and has divested everything from clothing to electronics. What remains—packaging for food and everyday necessities—might seem mundane compared to the glamour of confectionery or the profit margins of contraceptives. But it's also more durable, more globally scalable, and increasingly essential in a world grappling with food waste and packaging sustainability.
The transformation required selling iconic businesses (Jolly Ranchers, anyone?) and exiting growing industries. It required betting nearly a billion euros on Van Leer, then immediately selling half of what was acquired. It required recognizing that leadership in a niche beats mediocrity across many sectors.
Today, Huhtamaki faces new questions. Can sustainable packaging replace traditional plastics at scale and at competitive cost? Will consumer behavior shift from "better single-use" to "no single-use"? Can a Finnish company maintain relevance in a consolidating global industry where larger players have deeper pockets?
The company's history suggests it has the capability for reinvention when necessary. From Siberia to sustainable packaging, Huhtamaki has demonstrated that corporate longevity sometimes requires abandoning the past entirely—while keeping the founder's ambition to see the world differently and act accordingly.
For investors, the key question is whether the next chapter of transformation—from conventional packaging to sustainable packaging leader—will prove as successful as the last. The regulatory environment suggests tailwinds. The competitive dynamics suggest challenges. The company's track record suggests a management culture capable of radical adaptation when required.
As Heikki Huhtamäki might have said, looking at his neatly packaged products: "Well packaged—half sold." The other half, as always, depends on execution.
Spotify
Apple Podcasts
Amazon Music
Audible
YouTube
Castbox
Pocket Casts