Resilience, Efficiency, & Sustainability: How Bioindustry Leaders Are Looking at 2025
The bioindustry entered 2025 under a cloud of economic and regulatory uncertainty. A recent global survey by AFRY of more than 150 executives across the pulp, paper, and packaging sectors reveals a clear realignment of priorities. Cost inflation, regulatory headwinds, and market volatility are pushing companies to shift from growth-focused strategies to ones rooted in operational resilience, cost efficiency, and sustainable innovation.
TOP CONCERNS
Macroeconomic uncertainty tops the list of executive concerns. As shown in Figure 1, more than 75 percent of respondents identified inflation-related cost pressures and broader economic instability as the primary risks to their businesses. This trend underscores the need for tighter cost control and greater margin management across the value chain.
Compounding these challenges is a regulatory landscape that continues to quickly evolve. Sixty-five percent of executives cited legislation and tariffs as major risks, pointing to growing uncertainty around Environmental, Social, and Governance (ESG) requirements, trade policy, and region-specific compliance frameworks. This is particularly acute in jurisdictions with aggressive sustainability agendas, like the European Union member states, or shifting political climates, like the United States.
In parallel, 40—55 percent of respondents expressed concern about pricing dynamics, fluctuating demand, and the delicate balance of supply and demand. These commercial pressures highlight the need for enhanced agility in planning, pricing strategy, and market forecasting.
A SHIFT IN STRATEGY
Facing such uncertainty, many companies are rethinking their strategic priorities (see Figure 2). Cost optimization and EBIT management have taken center stage, with above 65 percent of respondents identifying them as their most pressing strategic objectives. This signals a broader pivot away from traditional growth metrics and toward operational resilience.
Automation and digital tools are increasingly seen as key enablers in this effort. Nearly half of surveyed companies are leveraging technology to drive productivity gains, especially in core functions such as maintenance, logistics, and quality control. This reflects a pragmatic view of digitalization, which is seen as a tactical lever for measurable efficiency.
Interestingly, only 20—24 percent of executives reported pursuing growth through capital expenditures or mergers and acquisitions. Instead, companies are adopting more cautious, “asset-light” strategies such as licensing, partnerships, and geographic extensions that allow for flexibility without significant financial risk.
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SUSTAINABILITY AS A CORE STRATEGY
Amidst a challenging external environment, one opportunity stands out: sustainability. A full 64 percent of executives identified “plastic substitution” as the leading growth lever for 2025. This reflects a broader shift in how companies view environmental responsibility. Companies leveraging sustainable product solutions do not view environmental responsibility as a regulatory burden, but rather as a central pillar of competitiveness and brand value.
This shift is particularly prominent in the packaging and fiber-based materials sectors, where innovation around bio-based and compostable solutions is accelerating. Companies are realigning their research, product development, and marketing efforts to capture this demand and future-proof their portfolios against shifting customer preferences and policy mandates.
The rise of sustainability as a top-tier business driver is also fueling greater interest in external partnerships and technology licensing, as firms seek faster, less capital-intensive ways to bring sustainable innovations to market.
WHAT COMPANIES ARE DOING TO ADAPT
The survey data points to a number of clear action areas for companies navigating the 2025 landscape:
- Strengthening cost resilience. In an inflationary environment, tightening operational controls is of utmost importance. Companies are placing increased focus on production and supply chain efficiencies to protect margins. Based on AFRY’s asset benchmarking data, many North American pulp and paper mills—often operating with a high technical age—have significant opportunities to maintain competitiveness despite rising costs.
Operational efficiency programs and energy management initiatives can help capture near-term savings. However, the high technical age of assets across the region highlights the need for a balanced approach: building resilience into operations while recognizing that targeted capital investment is often required to sustain long-term cost competitiveness.
It is critical to develop a clear view of where to prioritize operational improvements versus where capital upgrades are necessary. A disciplined investment strategy—one that aligns technical needs with commercial objectives—enables mills to strengthen their cost position, improve asset reliability, and better withstand future market and cost pressures.
- Preparing for regulatory volatility. With legislation and trade rules in flux, proactive compliance has become a critical capability. Leading companies are developing scenario-based regulatory response plans and investing in monitoring tools and regulatory intelligence systems. By anticipating change rather than reacting to it, firms can reduce compliance risk and maintain market access.
- Aligning with sustainability trends. Plastic substitution and sustainable packaging are no longer future ambitions, they’re present-day imperatives. Companies continue to align R&D with emerging sustainability trends, and drive speed-to-market from partnerships and technology licenses for sustainable materials. The fiber-based packaging industry is uniquely positioned to offer products that meet regulatory and consumer expectations around circularity and biodegradability. Wood-based fibers, the foundation of these products, are inherently renewable and sustainable when responsibly sourced. This natural advantage supports the industry’s ability to deliver solutions that align with the growing global focus on reducing environmental impact and promoting a circular economy.
- Focusing digital investments on productivity. Rather than investing in broad, platform-based digital transformation efforts, companies are deploying targeted solutions that deliver short-term ROI. These include predictive maintenance and real-time asset monitoring, automation in logistics and quality assurance, and integrated planning tools for production and resource allocation. These technologies are helping firms unlock gains in efficiency without major capital outlays.
- Adopting smarter growth models. With capital constrained and high uncertainty, companies are choosing to grow selectively. Strategies include pursuing acquisitions only in high-confidence or distress-driven scenarios and prioritizing investments that deliver quick returns or long-term strategic value. Also, entering new markets via partnerships or licensing is a trend balancing the need for expansion with the imperative to remain agile and capital-efficient.
BUILDING THE BIOINDUSTRY OF TOMORROW
The bioindustry’s 2025 landscape is being shaped by a complex interplay of economic pressure, environmental mandates, and evolving consumer expectations. The companies that succeed will be those that recalibrate their strategies and that focus less on expansion and more on operational excellence, cost resilience, and sustainability-led innovation.
While challenges remain, the path forward is increasingly clear. Firms must become more selective in their investments, more agile in their operations, and more committed to sustainable value creation. In doing so, they will not only weather today’s volatility but also build a stronger foundation for long-term growth.
