Sustainable Foodservice Packaging Market Size, Share & Trends Analysis Report By Product Type (Corrugated Boxes and Cartons, Trays, Plates, Food Containers, and Bowls, Clamshells, Other Product Types), By End-User Industries (QSR, Full-service Restaurants, Institutional, Hospitality, Other end-user Industries) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2023-2031

Market Overview

The global sustainable food service packaging market size was valued at USD 56.06 billion in 2022. It is estimated to reach USD 94.07 billion by 2031, growing at a CAGR of 5.92% during the forecast period (2023–2031). 

There is a surge in the use of online food services nowadays owing to people's hectic schedules and the growing population of millennials worldwide. This is expected to augment the global sustainable foodservice packaging market. In addition, consumers are transitioning towards sustainability and investing mostly in eco-friendly products, thus fueling market expansion. Food service packaging facilitates the packaging of processed or partially processed foods. The packaging service provides a barrier against contamination by diminishing heat resistance and microbiological growth. Modern food packaging is intended to fulfill a variety of needs. It should provide a barrier against external factors such as moisture, air, light, and microorganisms that could degrade the food's quality.

Sustainable packaging for food service entails creating and using packaging that enhances sustainability. It successfully reduces environmental impact and ecological footprint. The packaging aims to reduce food waste by addressing food quality and safety concerns, such as chemical contamination or food-borne illnesses. Sustainable food service packaging is emerging as a megatrend as environmental and package leakage concerns grow among consumers worldwide.

Market Dynamics

Market drivers

Shift in consumer preferences toward recyclable and eco-friendly materials

The packaging sector continuously strives to enhance its products' environmental sustainability by leveraging the increasing availability of reusable choices. The demand for eco-friendly packaging is increasing among consumers and manufacturers. Food industry companies already offer edible wrappers or individually wrapped foods from natural sources.

The Buying Green survey noted an increase in willingness to pay more for sustainable packaging in both the United States and South America. However, consumer preference slightly decreased in the overall amount they are willing to pay compared to 2020. For example, in South America, the willingness to pay is the highest globally, with about 84% of consumers willing to pay a premium for eco-friendly packaging. This is likely to augment market growth.

Online food ordering services

In recent years, the food industry has undergone a significant revolution. Food can now be easily ordered online and delivered to customers' homes. Online restaurant delivery and food ordering have increased by more than 20% over the past few years. The sustainable food service packaging market is expanding as online food delivery systems are becoming more widely used.

Convenience is becoming increasingly essential to customers, especially Millennials, who comprise a larger consumer population. This demographic desires to consume their favorite foods whenever and wherever they choose and order and pay for them with a single click. Due to a lack of time, consumers seek out convenience foods. In the food and beverage industry, the expectations of food quality, hygiene, and rising health consciousness drive the sustainable plastic packaging market.

Market restraint

High cost associated with sustainable foodservice packaging

Sustainable food service packaging is significantly more expensive than conventional packaging, which inhibits market expansion. The high price is due to the involved materials, their sourcing, and the market's less-established supply chains. In addition, the lower economies of scale and low manufacturing processes hinder the market's growth for sustainable food packaging for food service. The expense of switching from conventional to eco-friendly packaging can be prohibitive for many small businesses, thereby impeding the expansion of sustainable food service packaging.

Market opportunities

Increasing product launches

The key participants in the market are consistently engaged in product launches and innovations to strengthen their market position. For instance, in April 2022, Mondi launched two sustainable packaging solutions for the food industry. The two sustainable packaging solutions, PerFORMing Monoloop and Mono Formable PP, are said to provide fresh food manufacturers with recyclable alternatives to help reduce food waste. PerFORMing Monoloop is designed for sliced food such as cheese or meat. Combining a paper tray with a barrier layer and a plastic top web solution minimizes plastic consumption.

Additionally, in April 2022, Westfalia's fruit business in France introduced a new range of environmentally and consumer-friendly packaging for avocados, drastically reducing and replacing the utilization of plastic and eliminating the use of black plastic, which is tough to recycle while maintaining fruit quality. These plastic-free or significantly reduced plastic packaging alternatives reflect Westfalia's industry leadership in environmental sustainability, including waste and carbon emission reductions. Such innovations are expected to create opportunities for market growth.

Regional Analysis

Based on region, the global sustainable foodservice packaging market is bifurcated into north america, europe, asia-pacific, latin america, and the middle east and africa.

Asia-Pacific market for sustainable foodservice packaging is anticipated to exhibit a CAGR of 6.42% during the forecast period. The Asia-Pacific region consists of densely populated nations and emerging economies, including China and India. The demand for food services is expanding rapidly, and the adoption of sustainable packaging is getting traction and is anticipated to peak during the forecast period. China has one of Asia's fastest-growing food service markets. The per capita income is approximately CNY 12,000 and is increasing annually, so eating out is becoming more prevalent. As a result of rapid economic growth and rising income levels, the catering food service industry has developed rapidly to meet the fluctuating demands of the market. For instance, Yum China launched a series of plastic reduction and sustainable packaging initiatives for its brands following the country's most recent regulations.

Furthermore, there has been increasing research and development in the region to develop new products, boosting market growth. For instance, in December 2021, Researchers from Singapore and the US developed a biodegradable packaging material that can kill microbes harmful to humans.

Europe is estimated to exhibit a CAGR of 6.17% over the forecast period. Surging investments in the food service sector, specifically toward cloud kitchens and food delivery, have immensely driven Europe's market. Food delivery is an increasingly invaluable trend observed in the food industry. As WFH is the new normal for many office workers, there has been an increase in online food ordering in the region. According to Eurostat, the percentage of people working from home in Europe increased to 12.3% in 2020 compared to 5.4% in 2019. The surge was due to the social distancing norms implemented by European governments in response to the Coronavirus pandemic. However, even after this, the trend of WFH is expected to continue is expected to continue in the region, pushing the demand for food delivery even further.

Additionally, surging urbanization, changing eating habits, and a lack of leisure hours coupled with the growing disposable income of people living in the regions are some of the factors driving the growth of the food service industry and thus propelling the demand for sustainable packaging solutions for the market.

In North America, the flourishing awareness among consumers and favorable regulations from the government is anticipated to expedite the demand for sustainable packaging in the region during the forecast period. The players in the market are investing in their expansion in the North American region to increase their market share. For instance, in September 2021, Berry Global Group Inc. announced to expand its food service packaging manufacturing operations in North America as a part of long-term strategic growth commitments. The company invested over USD 110 million to expand its proprietary and industry-leading polypropylene thermoforming capabilities to manufacture clear drink cups and lids for quick-service restaurants, convenience stores, coffee shops, and other foodservice markets.

Moreover, with an increasing number of food chains, such as McDonald's, planning to use 100% sustainable packaging by 2025, manufacturers are choosing to use this opportunity to build consumer trust by proactively addressing the environment. It also creates an immense opportunity for sustainable packaging manufacturers to penetrate and garner a higher market share.

In Latin America, the region's ban on single-use plastic materials drives the sustainable foodservice packaging market. Chile became the first country in Latin America to approve the nationwide ban on single-use plastic bags. Such restrictions are expected to boost the demand for other food packaging materials, such as aluminum, paper, glass, etc. Mexico and Argentina have enforced a ban on plastic bags. Moreover, fast urbanization, sedentary lifestyles, and the rising on-the-go food culture are some other factors that positively impact market growth.

Segmental Analysis

The global sustainable foodservice packaging market is segmented by product type and end-user.

Based on product type, the global sustainable foodservice packaging market is divided into corrugated boxes and cartons, trays, plates, food containers, bowls, clamshells, and other product types. 

The corrugated boxes and cartons segment dominates the global market and is predicted to exhibit a CAGR of 6.33% throughout the forecast period. Cardboard is one of the most common forms of packaging, particularly for the food and beverage sector. Corrugated cartons are formed of a few layers of material instead of just single sheet-like cardboard. The three layers of corrugated comprise an inside liner, an outside liner, and a medium that goes between the two fluted. In addition, corrugated is a resilient, lightweight material, which is a significant consideration for shipping many packages. Corrugated boxes possess favorable attributes for the packing, transportation, and long-term storage of food due to their non-reactive nature.

Additionally, packaging for processed foods must be safe and suitable for the buyer and confirm product safety. As a result, processed food is packaged in corrugated boxes. Similarly, many companies are developing innovative packaging solutions to promote sustainable packaging. For instance, in June 2022, Hazel Technologies Inc. announced a partnership with H.R. Spinner Corporation. Spinner's portfolio provides the company with corrugated cartons and box machines combined with other integral packaging like pulp trays, poly bags, and fruit wrap for the food service packaging industry.

Clamshells are utilized in the food industry to safeguard food from air pollutants, keeping it fresh. Clamshell boxes are compatible with various products and can be customized to enhance the brand's appeal. Many innovations are taking place in the packaging market to meet the surging demand for sustainable food packaging. For instance, in August 2021, Greenyard USA announced the innovation of a sustainable substitute to replace plastic clamshell packaging for grapes, called the EcoBox. The EcoBox is a moisture-resistant, sturdy box made with clay-coated recyclable paperboard, decreasing the use of plastic by 100%. Similarly, in April 2022, Burger King UK began testing a fresh range of reusable and returnable packaging for its burgers and sides. In conjunction with the global reuse platform Loop, the fast-food chain tested the very first reusable burger clamshells during the pilot launch. Such occurrences drive the demand for sustainable foodservice packaging methods.

Based on the end-user, the global sustainable foodservice packaging market is segmented into QSR, full-service restaurants, institutional, hospitality, and other end-users. 

The QSR segment owns the highest market share and is estimated to exhibit a CAGR of 6.56% during the forecast period. Quick-service restaurants (QSRs) provide affordable food options with an emphasis on speedy service. This group differs from traditional restaurants because it emphasizes self-service and limited table service. Most menu items at quick-service restaurants are consumed directly from containers or packages. In addition, consumers choose fast food because it is convenient, quickly prepared, has excellent value, and is inexpensive. Therefore, packaging is an essential component of the food product, and it must be consistent with the consumer's motivations and expectations for consuming fast food.

Many beverage and food producers are exploring opportunities in environmentally friendly foodservice packaging to meet rising consumer demand. Similar trends were witnessed in the hospitality industry, including Dine-ins, Coffee shops, Snack Stores, etc. The growing demand for snack outlets has also led to increased consumption of cold beverages. In May 2022, Coca-Cola Europacific Partners (CCEP) announced that, in France, its Fuze Tea, Tropico, Sprite, Fanta, and Minute Maid brands would be available in universal 250ml bottles that can be returned, cleaned, and refilled for reuse in hotels, restaurants, and cafes. The Coca-Cola Company pledged to make at least 25% of its beverage packaging returnable, refillable, and sustainable by 2030.

Moreover, the demand for sustainable foodservice packaging was also witnessed concerning catering services. In February 2022, Celebration Packaging launched its new Naturals Kraft Plates: disposable, strong paper plates, and sturdy. They are perfect for use when catering for events or use at buffets. Such developments are expected to expedite market expansion.

Recent Developments

• September 2023- SkipTheDishes, Canada's only homegrown food delivery network, announced the launch of a reusable packaging pilot program in Calgary to provide residents with environmentally preferable alternatives to single-use plastic waste.
• April 2023- Seal Packaging launched Infinity TopSeal™, a revolutionary and sustainable packaging solution for food delivery companies and food service caterers, including restaurants, taverns, garden centers, and healthcare facilities.