Smithers: Packaging shifts beyond China sourcing
Global packaging pivots to a 'Plus One' sourcing strategy, as brands diversify beyond China to mitigate trade risks and build resilient supply chains, says a new Smithers report.
15 Jul 2025 | By Treya Sinha
Segments like rigid plastics and flexible packaging in the US, which are reliant on imports, are vulnerable to cost increases under current tariff scenarios
The global packaging market, projected to reach USD 1.52-trillion by 2030, is undergoing a significant strategic shift as brands and converters increasingly adopt a Plus One sourcing strategy. This move, highlighted in a new white paper from industry authority Smithers, aims to mitigate future trade risks and diversify supply chains beyond traditional reliance on China.
According to the Smithers white paper, Impact of Tariffs on Packaging, US tariff policies are expected to reshape the industry, with potential impacts reaching into the tens of billions of dollars. While short-term effects may be more pronounced on the US economy, the long-term outlook suggests a recovery. In this evolving landscape, the Plus One strategy is emerging as a critical response.
The strategy involves companies adding sourcing locations to their supply chain, moving beyond a singular dependence on China. This diversification is seen as a proactive measure to cushion against the volatility of tariff-related uncertainties and geopolitical shifts. Southeast Asia and Latin America are identified as key emerging alternatives for manufacturing and sourcing.
Segments like rigid plastics and flexible packaging, which are heavily reliant on imports, are particularly vulnerable to cost increases under current tariff scenarios. However, demand for these materials remains robust due to their essential role in food and healthcare. Despite broader economic pressures, healthcare packaging is forecast to witness a 3.1% compound annual growth rate in the US, while cosmetics packaging benefits from the "lipstick effect," indicating continued consumer spending on small luxuries.
The Smithers report emphasises that, depending on various scenarios, US packaging consumption in 2030 could fluctuate by over USD 24-billion, underscoring the financial implications of tariff-related uncertainty. By embracing the Plus One strategy, businesses are aiming to build more resilient and adaptable supply chains, ensuring stability and continued growth in a dynamic global market.