Sustainable Films for Packaging Market

Market Overview

The Total Addressable Market (TAM) for sustainable films for packaging was valued at USD 150.8 billion in 2022. It is estimated to reach USD 276.2 billion by 2031, growing at a CAGR of 7.0% during the forecast period (2023–2031).

Better sustainability is achieved through the development and application of sustainable packaging films. This includes increased use of life cycle inventories (LCI) and life cycle assessments (LCA) to better direct package use and lessen adverse environmental effects and the ecological footprint. The most critical choice for reducing plastic waste is sustainable packaging films. Sustainable films for packaging materials are gaining a lot of popularity nowadays. Due to the growing emphasis on the circular economy and the government's toughening rules to prevent single-use plastics, it is projected that the market for sustainable films for packaging products will grow significantly over the next several years.

Market Dynamics

Global Sustainable Films for Packaging Market Drivers

• Growing Government and Industrial Initiatives to Reduce Plastic Waste

Governments across the globe have responded to public concerns about packaging waste, particularly single-use packaging waste, by enacting rules to reduce plastic waste and enhance waste-management systems. For instance, Australia, Canada, and the U.S. are focusing on optimizing the recovery and recycling of packaging waste. They are targeting 100% of packaging to be recyclable and compostable, which should effectively lower carbon footprints from the environment. Moreover, India and China have entirely banned the use of single-use packaging across all industries in 2022.

The consumer goods industry is prompting efforts to promote sustainability and is entirely focusing on using flexible packaging films which are environmentally friendly. The sustainable films for the packaging industry are growing as governments in various countries are increasing the number of awareness campaigns and implementing multiple strategies for zero–plastic waste and are planning to achieve the goal of plastic sustainability by 2030, driving the market growth.

• Increasing Demand for Mono-Material Plastic Packaging

A mono-material is a product made of only one material or fiber that facilitates recycling by reducing the energy necessary to divide or separate diverse materials. It is a sustainable film for packaging materials. Furthermore, increasing efficiency implies that recycling is more accessible and less expensive. Since the outbreak of the COVID-19 pandemic, there has been a significant societal deviation from unsustainable products. Therefore, the European Union has stated that all plastic packaging must be recyclable or reusable by 2030.

Mono-material films are known to be completely recyclable contrary to traditional multi-layer composite films, which are challenging to recycle due to the necessity to extract the individual film layers. The usage of mono-material plastic packaging films is continuously increasing globally, driven by the demand for easier-to-recycle polymer forms to reduce emissions linked with plastic and adopt circular economy concepts, i.e., by recycling plastic packaging at maximum efficiency. Thus, the increasing demand for mono-material plastic packaging propels market growth. 

Global Sustainable Films for Packaging Market Restraints

• Lack of Technological Advancement around Recycling

The creation of bio-packaging solutions has been the subject of extensive investigation. However, sustainable films for packaging companies need support to overcome specific technical problems with these bio-packaging materials, which are now impeding widespread market adoption. Compelling, sustainable films for packaging manufacturers to develop more ethical packaging techniques are owing to consumers' environmental and ecological concerns, such as plastic pollution, and the growing awareness of the circular economy. This entails using sustainable films for packaging products that are easier to recycle, such as monolayer plastic or paper, and minimizing the amount of material consumed. However, switching to sustainable packaging poses technological hurdles for packaging machinery. As the transition is complicated from a mechanical standpoint, sealing parameters like pressure, temperature, and time must be regulated, thereby restraining the market growth. 

Global Sustainable Films for Packaging Market Opportunities

• Upcoming Trends of Bioplastics

Bioplastics are expanding their reach into the packaging industry in response to the corresponding demands of converters and brand owners. Bioplastics utilize resources as efficiently as possible while keeping food safe, withstanding high temperatures, lowering carbon dioxide emissions, and providing new recovery alternatives. Bioplastic packaging provides the same benefits as conventional packaging while offering more sustainable aspects. Bioplastics are increasingly employed in food contact materials as an alternative to traditional fossil fuel-based polymers. For example, the Coca-Cola Company recently released a plant bottle partially composed of biobased plastics.

There is a considerable demand for bioplastic packaging for wrapping organic food and luxury and branded products with specific needs. Bio-based plastics used in packaging have one significant benefit over fossil-based products, i.e., the utilization of renewable resources and, as a result, the inherent value proposition of decreasing packaging's environmental impact in terms of greenhouse gas emissions. The previously-mentioned trends are expected to create opportunities for manufacturers to develop bioplastics and increase their footprint in the market.

Regional Analysis

By region, the global sustainable films for packaging market is divided into North America, Europe, Asia-Pacific, South America, and the Middle East and Africa.

Europe Dominates the Global Market

Europe is the most significant shareholder in the global sustainable films for packaging market and is anticipated to grow at a CAGR of 7.4% during the forecast period. Europe is recognized as one of the major producers and technological innovators of sustainable films for packaging. The plastics industry is critical to the European economy, and boosting its sustainability can open new avenues for innovation, competitiveness, and job creation, following the goals of the updated E.U. industrial policy strategy. The European packaging sector firmly supports making Europe more circular and resource-efficient. For this purpose, the industry is dedicated to increasing the contribution of eco-friendly packaging. Furthermore, European countries, such as France, Germany, and Italy, are going above and beyond the European Union's rigorous recycling legislation with Extended Producer Responsibilities (E.P.R.s).

Asia-Pacific is anticipated to grow at a CAGR of 7.0% over the forecast period. The region comprises Japan, South Korea, India, Australia, and the Rest-of-Asia-Pacific. The region is expected to be a high-growth market for sustainable films for packaging due to increasing government initiatives, awareness among consumers, and rising disposable income. The region is expected to offer ample opportunities for packaging film manufacturers during the forecast period. In various aspects, Japan is acknowledged as a center for technology development and R&D. It is one of the largest packaging consumers due to the massive demand from the food and beverage industry. According to the U.N., this demand from the food and beverage industry is also why Japan is the second largest producer of plastic packaging waste. The government is taking steps to cut down on plastic waste and move toward a circular economy as soon as possible.

North America is presently one of the most competitive regions for deploying sustainable films for packaging technology globally. The increased awareness among individuals and market trends toward recyclable and environment-friendly sustainable packaging materials, growing demands for packaged food and ready-to-eat food, and innovations in food packaging technology are the significant factors driving the expansion of the North American sustainable films for the packaging market.

The presence of countries such as Brazil, Argentina, and Chile marks South America. Among the countries in South America, Brazil has the most lenient regulatory scenario that favors the approval and commercial launch of new products and technologies in the market. South America is experiencing a growing trend in the food sector, including producing high-quality nutritional, ready-to-eat, and animal welfare food products. With the increasing demand for ready-to-eat food products, the South American sustainable packaging film market has ample growth opportunities. The end-user industries in these countries are backed by government funding to introduce market innovation and gain substantial market share.

The Middle East and Africa region is a strong emerging market for sustainable films for packaging and is considering expanding owing to the high growth rate in countries such as the United Arab Emirates (U.A.E.), Saudi Arabia, Egypt, and South Africa. Rising urbanization and steady population growth are key driving factors shaping the packaging industry. The Middle East and Africa currently have lower penetration of sustainable films, despite being one of the world's fastest-growing regions. The region consists of multiple small and medium businesses (S.M.B.s) transitioning to make innovative changes to achieve optimal efficiency and enhance product quality. This potential growth is supported by a large industrial base, effective government policies, and financial support in research and development by governments in countries such as the U.A.E., Saudi Arabia, Egypt, and South Africa.

Segmental Analysis

The global sustainable films for packaging market is segmented by applications and materials.

By application, the global sustainable films for packaging market is segmented into food and beverage, pharmaceutical, consumer goods, personal care, and consumer electronics.

The food and beverage segment is the highest contributor to the market and is expected to grow at a CAGR of 7.1% during the forecast period. Sustainability has gained substantial attention in the food and beverage industry as a result of the sizeable carbon footprint that the packaging process for food and beverages leaves. According to the United Nations, plastic waste skyrocketed from 2 million tons in 1950 to more than 460 million tons in 2021. The number is expected to double by 2040. Reducing the production of single-use plastic, which sustainability experts consider one of the most destructive types of packaging that has contributed to a severe accumulation of plastic waste globally, particularly in oceans, is a crucial component. By 2025, companies like Nestlé and PepsiCo may announce replacing all their packaging with recyclable, reused, or compostable ones.

Rapid population growth and improved medication access drive the demand for innovative pharmaceutical packaging products. The highly regulated pharmaceutical manufacturers are implementing new approaches to drug discovery, sustainable packaging, and marketing due to the continually changing production techniques. However, there is a lot of pressure on the manufacturers to act because environmental sustainability has become a global concern across sectors. In support of a circular economy, several pharmaceutical companies, retailers, and other participants in the pharmaceutical supply chain have established sustainability objectives and are stepping up their waste reduction efforts. Sustainable films for packaging suppliers are continuously working to fulfill the requirements of pharmaceutical companies.

By materials, the global sustainable films for packaging market is divided into polypropylene (PP), polyethylene (PE), polyethylene terephthalate (PET), and others (PLA and cellulose).

The polyethylene (PE) segment owns the highest market share and is expected to grow at a CAGR of 7.1% during the forecast period. Polyethylene (PE) is a thermoplastic material derived from the polymerization of ethylene. It is a lightweight, resilient plastic commonly used for frozen food bags, bottles, cereal liners, and yogurt containers. Recyclable polyethylene (PE) packaging provides many advantages of contemporary, flexible packaging, such as ease of transport, product-to-package weight ratio, carbon footprint reduction, and a variety of barrier alternatives.

Some types of polyethylene used in sustainable film packaging are High-Density Polyethylene (HDPE) and Low-Density Polyethylene (LDPE). HDPE is a low-cost, simple-to-process, opaque packaging material. HDPE makes shampoo and oil bottles, household cleaning bottles, flowerpots, and drums, all of which have opaque containers for marketing appeal. LDPE is a supple, adaptable, and light plastic substance. LDPE is known for its low-temperature flexibility, hardness, and corrosion resistance. It is not appropriate for applications requiring rigidity, high-temperature resistance, or structural strength. It is frequently employed in orthotics and prosthetics.

Polypropylene (PP), commonly known as polypropene, is a thermoplastic polymer resistant to breaking and can survive regular wear and tear. It is utilized in various applications, including consumer product packaging, plastic parts for different industries, and the automotive industry, such as live hinges and textiles. Polypropylene has a moderately slick surface, making it a viable substitute for polymers such as Acetal (POM) in low-friction applications such as gears or as a contact point for furniture. Polypropylene is deployed in several building and construction applications, such as siding, air, and moisture barrier membranes, carpet textiles, films and sheets used to insulate building wraps, industrial adhesives and tapes, and plastic plumbing parts. Biaxially-Oriented Polypropylene (BOPP) and Cast Polypropylene (CPP) are polypropylene used in the sustainable film packaging industry.

Recent Developments

• December 2022- Amcor announced that its Amcor Australia & New Zealand (ANZ) subsidiary has embarked on a Memorandum of Understanding (MOU) with Australian technology leaders Licella Holdings to invest in one of the country's first plastic advanced recycling facilities.
• December 2022- Amcor declared the debut of its brand-new, cutting-edge manufacturing facility in Huizhou, China. The 590,000 square foot factory, which cost over USD 100 million to build, is the largest flexible packaging facility in China in terms of production capacity, enhancing Amcor's capabilities to fulfill rising client demand throughout Asia Pacific.