$2.3 Billion Novolex/Waddington Deal Will Create a Top 5 Market Leader in Foodservice Disposables - Freedonia Analysis

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May 08, 2018, 01:09 ET

CLEVELAND, May 8, 2018 /PRNewswire/ -- The $2.3 billion deal announced last week for Novolex to acquire The Waddington Group from Newell Brands will produce a unit with over $1 billion in US sales of single-use foodservice items such as takeout containers, cups, and bags.

Combined, these companies create a player in the market with a product range as broad as market leaders Dart Container and Pactiv Foodservice. According to Freedonia Group packaging analyst Chad Henry, "The strategic move by Novolex capitalizes on two trends which stand to enjoy fast growth over the next five years – the increasing popularity of takeout, delivery, and eating on-the-go, and the growing consumer and restaurant demand for sustainable food packaging."

Novolex is currently a Top Ten player in the foodservice disposables market with dominant positions in plastic and paper bags. The acquisition in 2016 of Burrows Paper's Packaging Division added clamshell containers, coffee sleeves, and sheets used to wrap food items. The Waddington Group acquisition broadens their product range even further.

If the deal proceeds as planned, Novolex will acquire the three divisions of The Waddington Group including POLAR-PAK, WNA, and Eco-Products. These divisions produce cutlery, cups for hot and cold beverages, napkins, and catering ware, including plates and bowls. Eco-Products specializes in foodservice items that are compostable or made with a high degree of recycled content. "Calls for food packaging that has minimal negative environmental impact are growing louder and show no signs of leveling off," says Henry.

More information about these companies and opportunities in the foodservice disposables market can be found in Foodservice Single-Use Products in the US, by the Freedonia Group. https://www.freedoniagroup.com/industry-study/foodservice-single-use-products-in-the-us-by-product-and-market-3543.htm

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SOURCE The Freedonia Group