Q3 slightly improved
After the very poor second quarter of 2025 (-11%), FEPE members reported a slightly higher volume in Q3 2025, at 6.7 billion units, compared to the previous quarter.
This is a positive surprise, as the third quarter is typically the weakest quarter in the annual cycle. However, this positive aspect should not obscure the fact that Q3 was again around 550 million units (-8%) below the comparable quarter of the previous year.
In the first nine months, the volume reported by members thus fell by around 2 billion units, which corresponds to the production output of an entire high-performance envelope factory.
Even if the fourth quarter should show a significant recovery, the FEPE volume at the end of the year will remain significantly below 30 billion units for the first time, at around 28 billion.
The bad market climate had already become apparent in the fourth quarter of 2024, with a decline of 5%.
This negative trend then continued in the first two quarters of 2025 with a decline of about 9%, although the elections in Germany significantly mitigated the decline for some manufacturers.
However, as EUWID already reported at the beginning of the second quarter, following the flash in the pan of the German elections, there was “a veritable slump in volumes.”
This slump in volumes has then been confirmed in the quarterly statistics of the FEPE. Volumes were declining sharply especially in July and August in almost all regions of Europe.
In the traditionally strong fourth quarter, a sustained improvement in the situation is not expected. A recovery in volumes could only occur if economic conditions significantly improve.
As already discussed, the reason for the deteriorating industry sentiment is of course not only the poor economic situation in many market segments but also the ongoing trend toward digital media.
While online advertising continues to grow, print media is increasingly being avoided by agencies. The advantages of print advertising, including sales letters, are largely ignored by agencies or are no longer even known to them.
In Germany, the introduction of mandatory e-invoicing is also having an increasingly negative impact. Tax advisors and auditors are encouraged to urge their clients to quickly switch to e-invoicing. Increased postage rates and the deterioration in the quality of postal services are also contributing to a decline in mail volumes.
Public authorities are also increasingly trying to convert more services to digital communication, even though it is known that around 37 million Europeans between the ages of 16 and 74 still have no internet access and cannot be reached digitally as offline users.
The only positive aspect is the unchanged stable paper prices, which support our margins.
For all the reasons mentioned above, a further decline in the volume of envelopes is expected for 2025, by approximately 8 -10 % to around 32.5 billion (including non-FEPE members).
Volume shifts from Mayer-Kuvert network to Encore Ltd. have already been taken in account.
After the Europe-wide declines in 2022 and 2023, the e-commerce sector will experience inflation-adjusted growth for the first time in 2025. However, the slight growth in the volume of European e-commerce packaging of aprox 4% will by no means be enough to offset the decline in the mail communication segment of FEPE members.
We also have to keep in mind that part of the slight e-commerce growth is being absorbed by Chinese providers like Shein and Temu.
