Message from the FEPE President
Year 2023 defied all predictions. The drop in volumes processed by the graphics industry had a severe impact on all FEPE members.
It is imperative for all players in our industry to work on transforming our models in order to adapt them to the new market context.
The uncertainty that has prevailed over the last few years makes a collective approach to many issues more necessary than ever.
In this difficult yet exciting situation, FEPE is more than ever at the service of its members to inform and support them.
This annual report details market trends in 2023 and key FEPE news and activities.
Jean de Couespel, Mayer Group
The European Envelope Market
Facts and Figures 2023
Highlights
Please note that our delivery statistics are based on reporting by FEPE members only. The rest of the European market is NOT considered in these numbers)
In Q 1-3 2023, 23,46 billion envelopes were delivered by FEPE members (approx 85% of the European market), representing a decrease of 16,2 % compared to Q1-3 2022.
The shortage of paper supplies in 2022 had a negative impact on envelope business in the beginning of 2023. In the first months of 2023 our Industry has been confronted with filled client-warehouses and postponed contract orders. The ecommerce business remained far away from originally expectations and the important direct marketing business was extremely weak in the first 9 months of this year.
Based on the discussions with FEPE manufacturing members, the order intake was clearly too low to fill the existing machine capacities. The demand hopefully will recover in the traditionally strong 4th quarter.
High energy costs and contract terms are hitting the bottom line for all manufacturers.
In the statistics, we only follow the envelope manufacturing figures, but members indicate that e-commerce packaging is getting more and more important.
Reported by members
- Direct mail remained below expectations in most of the countries.
- The overprint business complains about falling order sizes and the weakness of the advertising market. Overall, the previous year’s level could not be maintained
- Post was this year less popular with advertisers — although it is delivering measurable results. But advertisers tried to save costs because their budgets very often were cut.
- National elections, censuses and other significant national events generate good additional business for some companies.
- The transactional market of statements and invoices continues to be under pressure (Keep me Posted)
- Air bubble pocket sales have stagnated as alternatives increase.
Short-term forecast
- Q4 should perform similarly to previous years, finishing the year around 12% below 2023.
- However, increasing energy and transport costs may well have a large impact on not just our businesses but on global markets.
- Inflation and wars lead to uncertainties that have a negative impact on our business.
- Margins will remain critical.
- Diversification is essential.
Forecast 2024 and beyond
- Global demand for envelopes is expected to fall slightly; between four and six percent depending on the country.
- Technology — such as artificial intelligence, new vehicles and more integration between postal plants and other post organisations — will have an impact on physical mail.
- Posts (i.e. national/regional postal organisations) are not expected to fail at all. Governments will continue to fund universal services, but the level of subsidies will start to come down.
- There is a universal trend away from mail and toward packages that will continue, and that should be monitored.