Mathias Friedrichs, Managing Director at Friedrichs & Partner, Kestria Germany, and the member of the Kestria Consumer & Retail Global Practice Group, spoke with Tobias Lüning, Senior Vice President Commercial and Managing Director of Metsä Tissue GmbH, about how manufacturers navigate these realities across European markets.
Tobias has held international commercial leadership roles in the consumer goods industry for many years. Today he oversees Metsä Tissue’s commercial activities across several European markets. What emerges from the conversation is a practical view of an industry in which seemingly simple products depend on a surprisingly complex set of industrial, commercial and regulatory dynamics.
Rising energy costs, regulation and changing retailer expectations
Across consumer goods, manufacturers face rising energy costs, tighter regulation and shifting retailer expectations. Which decisions has Metsä Tissue taken to strengthen competitiveness and customer relationships?
In Tobias’ view, disruption is no longer an interruption but part of the operating environment, as energy price volatility, geopolitical tensions, inflation, supply disruptions and regulatory change increasingly occur simultaneously. Before one pressure has eased, the next is already shaping the business environment, creating what he describes as a permanent polycrisis in energy-intensive industries.
In response, Metsä Tissue has taken several operational and structural decisions aimed at strengthening both competitiveness and customer relationships. Energy-efficiency improvements in mills, tighter supply-chain coordination and operational optimisation programmes directly address the cost pressure created by volatile energy markets.
At the same time, the company has intensified collaboration with key retail partners. Reliable supply, transparent communication and joint planning have become essential elements of long-term retailer relationships.
Retailers increasingly expect suppliers to operate as strategic partners capable of navigating volatility together rather than merely delivering products.
Price pressure, reliability and sustainability in purchasing decisions
Retailers and procurement teams are balancing price, reliability and sustainability more critically than before. What now drives purchasing decisions in private-label categories - and where does sustainability truly influence outcomes?
Retail buyers first assess whether a supplier can offer a competitive price and ensure reliable supply, as disruptions quickly become visible through empty shelves. Reliability therefore remains one of the most decisive factors in supplier selection.
Product performance is equally essential, with private-label products needing to meet clear expectations regarding softness, durability and usability.
Sustainability has moved higher on the agenda, yet Tobias draws an important distinction: in many negotiations it functions primarily as a qualification criterion rather than the final purchasing driver.
Retailers expect credible sustainability performance before negotiations begin. Once this baseline is met, however, decisions still largely depend on price competitiveness, supply reliability and product performance.
Moving beyond the recycled vs. fresh fibre debate
Circularity in consumer goods is often reduced to a material debate. How do you balance sourcing, carbon and long-term responsibility, and communicate the trade-offs to customers and consumers?
Public debates around sustainability in tissue frequently focus on a single question: recycled fibre versus fresh fibre.
Tobias argues that this perspective is too narrow. One statement from the conversation captures this view particularly clearly:
‘No tree is cut for toilet paper.’
Tissue production forms part of a broader forest-industry value chain. Wood is processed into multiple products, and the fibres used in tissue often originate from side streams of other industrial processes rather than from trees harvested specifically for this purpose.
For that reason, Metsä Tissue evaluates sustainability through a full life-cycle perspective. The company relies on externally verified Life Cycle Assessments (LCA) to measure environmental impact across the entire production chain - from forest sourcing to the finished product.
This perspective also shapes how emissions are assessed. Metsä Tissue considers Scope 1, Scope 2 and Scope 3 emissions, meaning not only emissions from its own facilities but also the broader energy system and supply-chain impacts.
The same broader logic applies to recycling debates. In some cases, Tobias notes, recycling delivers greater measurable environmental benefits in other applications - such as carton packaging - than in tissue products themselves. The critical question therefore becomes where sustainability measures create the greatest real impact rather than where they appear most intuitive.
Managing the investment dilemma in private-label markets
Private-label markets such as DACH and Benelux are structurally margin-constrained. How do you balance investments in energy efficiency and sustainability with profitability expectations?
Tissue production is highly energy-intensive and requires substantial capital expenditure. Improving energy efficiency or reducing emissions typically involves significant upgrades to machinery, production lines and energy systems.
For Tobias, every major investment begins with a strict business-case evaluation. Retail partners may support sustainability initiatives, but long-term purchase commitments that would fully secure such investments are rarely guaranteed, while private-label markets operate with structurally tight margins.
As a result, Metsä Tissue evaluates sustainability investments through a combination of economic viability, customer support and regulatory predictability. Only when these factors align does a large-scale investment become realistic.
Location decisions also play a role, as energy prices, regulatory frameworks and industrial policy differ across Europe. In energy-intensive industries, capital ultimately flows to locations where long-term conditions support sustainable production.
Brand-driven markets vs. private-label markets in Europe
European tissue markets differ significantly, with brand-led dynamics in Scandinavia and private-label dominance in Western Europe. How does this shape portfolio, marketing and resource allocation decisions?
The European tissue market is far from uniform, and these differences directly shape how Metsä Tissue steers its business.
In Scandinavia, strong consumer brands such as Lambi and Serla play a central role. Here, the company allocates more resources to brand development, marketing and consumer engagement, as brand perception directly influences purchasing decisions. Branded products also enable Metsä Tissue to communicate innovation, quality and sustainability directly to consumers.
The company’s role as category captain in several Nordic markets further strengthens this approach, with close retailer collaboration providing valuable insights into shopper behaviour and category dynamics.
In Western Europe, by contrast, private-label products dominate. The focus therefore shifts toward operational efficiency, cost competitiveness and supply reliability, with portfolio decisions prioritising scalable production and efficient logistics, and lower marketing investment.
In practice, Metsä Tissue operates with different regional steering models - brand-led markets require stronger marketing investment, while private-label markets demand operational excellence.
The future of sustainability in everyday consumer products
Expectations around sustainable everyday products continue to evolve. Which developments will most shape how sustainability is assessed and valued in Europe?
Looking ahead, Tobias expects several developments to shape hw sustainability becomes economically relevant in consumer goods.
Regulation will play a central role, as European policy increasingly requires greater transparency in measuring and reporting environmental impact, making sustainability more comparable and measurable across suppliers.
Retail structures are also changing, with consolidation across Europe and procurement decisions spanning multiple countries. As a result, retailers prefer suppliers who can support them consistently across markets.
Metsä Tissue has already adapted, reorganising its commercial structure on January 1, 2026 into a more integrated European organisation aligned with customer procurement and category management.
Over time, sustainability is likely to shift from a reputational topic to a more quantifiable economic factor, increasingly influencing commercial decisions.
Summary
The tissue industry's central challenge is not technical. The technology to produce more sustainably exists. The challenge is economic and structural - getting the incentives, the regulation and the customer relationships to align at the same moment. Tobias has spent a career navigating exactly that gap. His conclusion is neither optimistic nor pessimistic: it is patient. "The question is not whether sustainability becomes economically relevant," he says. "The question is whether you have built the foundations before it does."
