Sack Kraft Supply and Demand Is Shifting: What It Means for Procurement Teams

Why It Matters

Tighter supply and rising prices pressure margins for food‑and‑beverage packagers, while regional price gaps create both risk and sourcing opportunities for global procurement strategies.

Key Takeaways

• Sack kraft now a distinct market with separate fundamentals
• Supply constrained by European mill closures and Middle East energy costs
• US sack kraft demand up 5% in 2025, 1.6% growth expected 2026
• Mexico emerges as key market with limited supply and construction link
• European exports dominate, but US imports fell 77% in 2025

Pulse Analysis

The sack kraft segment is shedding its historic tie to kraftliner and is being treated as a standalone market. Recent shutdowns of non‑competitive mills—most notably Mondi’s Bulgarian plant—combined with soaring energy prices linked to the Middle East conflict have compressed European supply. Meanwhile, Brazil’s price index jumped 5.8% in May, translating to roughly $1,050 per tonne, underscoring how regional cost pressures are feeding into global price benchmarks.

Demand, however, remains robust. The United States recorded a 5% increase in sack kraft consumption in 2025, with forecasts pointing to an additional 1.6% rise in 2026, driven largely by e‑commerce giants expanding paper‑based wrapping. Mexico is gaining prominence as a growth market, buoyed by construction activity tied to the upcoming World Cup, while Brazil’s construction‑related usage continues to climb. These trends illustrate a diversified demand base that spans heavy‑weight industries, food packaging, chemicals, seeds and pet food.

For procurement teams, the evolving landscape presents both challenges and opportunities. Technical constraints make it difficult to switch to alternative materials, meaning price volatility directly impacts cost structures. Regional dynamics—Europe’s export dominance, the U.S.’s shrinking imports, and Brazil’s rising exports—create arbitrage possibilities but also require careful contract structuring. Companies that proactively monitor supply‑side shocks, hedge against currency fluctuations, and diversify sourcing across emerging hubs like Mexico will be better positioned to manage margins and ensure continuity in their packaging supply chains.