Sustainable Growth at Scale: Circularity, Responsible Sourcing & the Green Consumer
Tissue manufacturing operates under a distinct set of pressures. Producers mustrun one of the most energy-intensive processes in consumer goods, answerto concentrated retail buying power, meet sustainability expectations thatrise every year, and justify capital investmentin a category where margins leave little room for error. CNetG, in collaboration with Kestria’s Consumer & Retail Global Practice Group, recently explored these challenges through a conversation with a senior commercial leaderfrom one of Europe’s majortissue manufacturers, examining how the industry is managing cost pressure, circularity and retailer relationships in an increasingly demanding market.
Mathias Friedrichs, Managing Director at Friedrichs & Partner, Kestria Germany, spoke with Tobias Lüning, Senior Vice President Commercial and Managing Director of Metsä Tissue GmbH, who oversees the company’s commercial activities across several European markets. Their conversation offers a practical view of an industry in which a seemingly simple product depends on a surprisingly complex set ofindustrial, commercial and regulatory dynamics.
Three Themes Emerge
Across pricing negotiations, fibre sourcing and regional market structures,three consistent themes stood out.
First, sustainability functions as a qualifier, not the final purchasing driver. Retailers expect credible environmental performance before negotiations even begin, but once that baseline is met, price competitiveness, supply reliability and product performance still decide the outcome.
Second, circularity requires a full life-cycle view rather than a simple materials debate. Reducing sustainability to “recycled versus fresh fibre” misses where fibre actually comes from and where recycling delivers the greatestreal-world environmental benefit.
Third, growth depends on aligning economics,regulation and customerrelationships at the same moment. Energy-intensive investment only becomes viable when business cases, retailer support and regulatory predictability move together and regional market structure shapes how resources are allocated in the first place.
Managing Cost Pressure Without Losing Reliability
For Tobias, disruption is no longer an interruption to business as usual itis the operating environmentitself. Energy price volatility, geopoliticaltensions, inflation, supply disruptions and regulatory change increasingly hit atthe same time, creating what he describes as a permanent polycrisis in energy-intensive industries.
In response, Metsä Tissue has pursued energy-efficiency improvements in its mills,tighter supply-chain coordination and operational optimisation programmes to directly offsetthe cost pressure created by volatile energy markets. Atthe same time,the company has deepened collaboration with key retail partners,treating reliable supply,transparent communication and joint planning as essentialto long-term relationships. Retailers increasingly expect suppliers to act as strategic partners capable of navigating volatility together, not simply as vendors delivering products.
Purchasing Decisions: Price, Reliability and Sustainability as a Qualifier
Retail buyers first assess whether a supplier can offer a competitive price and guarantee reliable supply, since disruptions become visible on the shelf almostimmediately. Reliability remains one ofthe most decisive factors in supplier selection, closely followed by product performance; private-labeltissue still has to deliver on softness, durability and usability.
Sustainability has moved higher up the agenda, but Tobias is clear about where it actually sits in the decision: itfunctions primarily as a qualification criterion ratherthan the deciding factor. Retailers expect credible sustainability performance as a baseline before talks begin; once that bar is cleared, price, reliability and performance still carry the negotiation
Moving Beyond the Recycled vs. Fresh Fibre Debate
Public discussion of sustainability in tissue often collapses into a single question recycled fibre or fresh fibre. Tobias argues this framing is too narrow, capturing his view in one direct statement: no tree is cut for toilet paper. Tissue production sits within a broader forest-industry value chain, and the fibres used often come from side streams of other industrial processes rather than trees harvested specifically for tissue.
That is why Metsä Tissue evaluates sustainability through a full life-cycle lens, relying on externally verified Life Cycle Assessments to measure environmental impact from forest sourcing through to finished product and accounting for Scope 1, Scope 2 and Scope 3 emissions across the wider energy system and supply chain. The same logic applies to recycling: in some cases, Tobias notes, recycling delivers greater measurable benefit in other applications, such as carton packaging, than in tissue itself. The real question is where sustainability measures create the greatest impact, not where they appear most intuitive.
Balancing Investment and Profitability in Private-Label Markets
Tissue production is capital-intensive, and improving energy efficiency or cutting emissions typically means 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 in principle, butlong-term purchase commitments that would fully secure such investment are rarely guaranteed, especially in structurally margin-constrained markets like DACH andBenelux.
As a result, Metsä Tissue weighs economic viability, customer support and regulatory predictability together, and only commits to large-scale investment when allthree align. Location decisions play into this too: energy prices, regulatory frameworks and industrial policy differ across Europe, and capital ultimately flows to the locations where long-term conditions support sustainable production.
Brand-Led vs. Private-Label: Divergent Regional Strategies
The European tissue marketis farfrom uniform, and this directly shapes how Metsä Tissue allocates resources. In Scandinavia, strong consumer brands such as Lambi and Serla mean the company invests more heavily in brand development, marketing and consumer engagement, since brand perception drives purchasing decisions and lets Metsä Tissue communicate innovation and sustainability directly to consumers. The company’s role as category captain in several Nordic markets deepens this further, with close retailer collaboration providing insightinto shopper behaviour.
In Western Europe, by contrast, private-label dominates, and the focus shifts to operational efficiency, cost competitiveness and supply reliability — portfolio decisions favour scalable production and efficientlogistics over marketing spend. In practice, Metsä Tissue runs differentregional steering models side by side: brand-led markets demand marketing investment, private-label markets demand operational excellence.
Regulation, Consolidation and the Future of Sustainability
Looking ahead, Tobias expects several forces to shape how sustainability becomes economically not just reputationally relevant. European regulation is pushing toward greater transparency in measuring and reporting environmental impact, making sustainability performance more comparable across suppliers. At the same time, retail consolidation across Europe means procurement decisions increasingly span multiple countries, and retailers prefer suppliers who can support them consistently across markets.
Metsä Tissue has already moved to meet this shift, reorganising its commercial structure on January 1, 2026 into a more integrated European organisation aligned with customer procurement and category management. Overtime, Tobias expects sustainability to shift from a reputational topic to a quantifiable economic factor that increasingly shapes commercial decisions.
Conclusion
The tissue industry’s central challenge is not technical; the technology to produce more sustainably already exists. The challenge is economic and structural: getting incentives, regulation and customer relationships to align at the same moment. Tobias has spent a
career navigating exactly that gap, and his conclusion is neither optimistic nor pessimistic; itis patient. As he puts it, the question is not whether sustainability becomes economically relevant, but whether a company has built the foundations before it does.
As energy costs, regulation and retailer expectations continue to converge, the manufacturers best positioned for the future will be those that treat sustainability, reliability and operational discipline as a single, integrated strategy rather than three separate demands.
About Metsä Tissue
Metsä Tissue is part ofthe Finnish Metsä Group, one of Europe’s leading forestindustry groups. The company produces tissue and greaseproof paper products for both branded and private-label markets across Europe. With consumer brands such as Lambi, Serla, Tento and Mola, and long-standing partnerships with major European retailers, Metsä Tissue operates in a category where reliable supply, efficient production and credible sustainability performance increasingly determine competitiveness.
Tissue manufacturing operates under a distinct set of pressures. Producers mustrun one of the most energy-intensive processes in consumer goods, answerto concentrated retail buying power, meet sustainability expectations thatrise every year, and justify capital investmentin a category where margins leave little room for error. CNetG, in collaboration with Kestria’s Consumer & Retail Global Practice Group, recently explored these challenges through a conversation with a senior commercial leaderfrom one of Europe’s majortissue manufacturers, examining how the industry is managing cost pressure, circularity and retailer relationships in an increasingly demanding market.
Mathias Friedrichs, Managing Director at Friedrichs & Partner, Kestria Germany, spoke with Tobias Lüning, Senior Vice President Commercial and Managing Director of Metsä Tissue GmbH, who oversees the company’s commercial activities across several European markets. Their conversation offers a practical view of an industry in which a seemingly simple product depends on a surprisingly complex set ofindustrial, commercial and regulatory dynamics.
Three Themes Emerge
Across pricing negotiations, fibre sourcing and regional market structures,three consistent themes stood out.
First, sustainability functions as a qualifier, not the final purchasing driver. Retailers expect credible environmental performance before negotiations even begin, but once that baseline is met, price competitiveness, supply reliability and product performance still decide the outcome.
Second, circularity requires a full life-cycle view rather than a simple materials debate. Reducing sustainability to “recycled versus fresh fibre” misses where fibre actually comes from and where recycling delivers the greatestreal-world environmental benefit.
Third, growth depends on aligning economics,regulation and customerrelationships at the same moment. Energy-intensive investment only becomes viable when business cases, retailer support and regulatory predictability move together and regional market structure shapes how resources are allocated in the first place.
Managing Cost Pressure Without Losing Reliability
For Tobias, disruption is no longer an interruption to business as usual itis the operating environmentitself. Energy price volatility, geopoliticaltensions, inflation, supply disruptions and regulatory change increasingly hit atthe same time, creating what he describes as a permanent polycrisis in energy-intensive industries.
In response, Metsä Tissue has pursued energy-efficiency improvements in its mills,tighter supply-chain coordination and operational optimisation programmes to directly offsetthe cost pressure created by volatile energy markets. Atthe same time,the company has deepened collaboration with key retail partners,treating reliable supply,transparent communication and joint planning as essentialto long-term relationships. Retailers increasingly expect suppliers to act as strategic partners capable of navigating volatility together, not simply as vendors delivering products.
Purchasing Decisions: Price, Reliability and Sustainability as a Qualifier
Retail buyers first assess whether a supplier can offer a competitive price and guarantee reliable supply, since disruptions become visible on the shelf almostimmediately. Reliability remains one ofthe most decisive factors in supplier selection, closely followed by product performance; private-labeltissue still has to deliver on softness, durability and usability.
Sustainability has moved higher up the agenda, but Tobias is clear about where it actually sits in the decision: itfunctions primarily as a qualification criterion ratherthan the deciding factor. Retailers expect credible sustainability performance as a baseline before talks begin; once that bar is cleared, price, reliability and performance still carry the negotiation
Moving Beyond the Recycled vs. Fresh Fibre Debate
Public discussion of sustainability in tissue often collapses into a single question recycled fibre or fresh fibre. Tobias argues this framing is too narrow, capturing his view in one direct statement: no tree is cut for toilet paper. Tissue production sits within a broader forest-industry value chain, and the fibres used often come from side streams of other industrial processes rather than trees harvested specifically for tissue.
That is why Metsä Tissue evaluates sustainability through a full life-cycle lens, relying on externally verified Life Cycle Assessments to measure environmental impact from forest sourcing through to finished product and accounting for Scope 1, Scope 2 and Scope 3 emissions across the wider energy system and supply chain. The same logic applies to recycling: in some cases, Tobias notes, recycling delivers greater measurable benefit in other applications, such as carton packaging, than in tissue itself. The real question is where sustainability measures create the greatest impact, not where they appear most intuitive.
Balancing Investment and Profitability in Private-Label Markets
Tissue production is capital-intensive, and improving energy efficiency or cutting emissions typically means 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 in principle, butlong-term purchase commitments that would fully secure such investment are rarely guaranteed, especially in structurally margin-constrained markets like DACH andBenelux.
As a result, Metsä Tissue weighs economic viability, customer support and regulatory predictability together, and only commits to large-scale investment when allthree align. Location decisions play into this too: energy prices, regulatory frameworks and industrial policy differ across Europe, and capital ultimately flows to the locations where long-term conditions support sustainable production.
Brand-Led vs. Private-Label: Divergent Regional Strategies
The European tissue marketis farfrom uniform, and this directly shapes how Metsä Tissue allocates resources. In Scandinavia, strong consumer brands such as Lambi and Serla mean the company invests more heavily in brand development, marketing and consumer engagement, since brand perception drives purchasing decisions and lets Metsä Tissue communicate innovation and sustainability directly to consumers. The company’s role as category captain in several Nordic markets deepens this further, with close retailer collaboration providing insightinto shopper behaviour.
In Western Europe, by contrast, private-label dominates, and the focus shifts to operational efficiency, cost competitiveness and supply reliability — portfolio decisions favour scalable production and efficientlogistics over marketing spend. In practice, Metsä Tissue runs differentregional steering models side by side: brand-led markets demand marketing investment, private-label markets demand operational excellence.
Regulation, Consolidation and the Future of Sustainability
Looking ahead, Tobias expects several forces to shape how sustainability becomes economically not just reputationally relevant. European regulation is pushing toward greater transparency in measuring and reporting environmental impact, making sustainability performance more comparable across suppliers. At the same time, retail consolidation across Europe means procurement decisions increasingly span multiple countries, and retailers prefer suppliers who can support them consistently across markets.
Metsä Tissue has already moved to meet this shift, reorganising its commercial structure on January 1, 2026 into a more integrated European organisation aligned with customer procurement and category management. Overtime, Tobias expects sustainability to shift from a reputational topic to a quantifiable economic factor that increasingly shapes commercial decisions.
Conclusion
The tissue industry’s central challenge is not technical; the technology to produce more sustainably already exists. The challenge is economic and structural: getting incentives, regulation and customer relationships to align at the same moment. Tobias has spent a
career navigating exactly that gap, and his conclusion is neither optimistic nor pessimistic; itis patient. As he puts it, the question is not whether sustainability becomes economically relevant, but whether a company has built the foundations before it does.
As energy costs, regulation and retailer expectations continue to converge, the manufacturers best positioned for the future will be those that treat sustainability, reliability and operational discipline as a single, integrated strategy rather than three separate demands.
About Metsä Tissue
Metsä Tissue is part ofthe Finnish Metsä Group, one of Europe’s leading forestindustry groups. The company produces tissue and greaseproof paper products for both branded and private-label markets across Europe. With consumer brands such as Lambi, Serla, Tento and Mola, and long-standing partnerships with major European retailers, Metsä Tissue operates in a category where reliable supply, efficient production and credible sustainability performance increasingly determine competitiveness.