Market Dynamics
Global sustainable packaging market drivers
Governmental programs for eco-friendly packaging
Plastic has been one of the most pressing issues among the numerous packaging materials for most nations. Over 8.3 billion tonnes of plastic have been created since the early 1950s, according to a report released by the UN environment agency. A landfill or the natural environment is where about 60% of the plastic ends. Additionally, almost 8 million tonnes of plastic make their way into the oceans yearly. Governmental agencies are enforcing prohibitions and putting recycling innovations into practice in industrialized cities like New York and developing countries like India.
Customers make wiser purchasing decisions to ensure environmental protection, and businesses are improving construction methods. A recent analysis titled Sustainability and Changing Consumer Behavior, published by Capgemini, showed that 79% of customers alter their purchasing habits in response to social responsibility, inclusivity, or environmental impact.
Global sustainable packaging market restraint
Manufacturing plant capacity constraint
There is a global shortage of production capacity among businesses due to the demand for more sustainable alternatives to conventional plastic disposables. In the UK, around 50% of all packaging needs to be easily recyclable. Brands and manufacturers would boost their usage of recycled materials due to the UK's blocked proposal to tax virgin plastic material. Brands must take the initiative to develop recycling infrastructure and technology for collection and recovery that can close the loop. Therefore, businesses must work with a logistics firm to collect and deliver garbage, construct and upgrade infrastructure for recovery and recycling, enhance the quality of recycled materials, and incorporate waste into new goods.
Global sustainable packaging market opportunities
Packaging reduction
Instead of raising prices due to rising raw material costs, businesses are shrinking the packaging for commonplace items like breakfast cereals, crackers, and soft beverages. Consumers may need to be made aware that they are getting fewer products for their money. Many everyday items have had their container size reduced recently, from cereal maker General Mills to the retail brands of Costco and Walmart, with inflation expected to reach its highest level of 5.4% in 2021. With the number of the population living in cities growing and consumers' awareness of prices rising, most of them prefer using tiny packaging that is portable and cost-effective. This eliminates the worry about the things they use having a shelf life and makes them convenient to carry around.
Regional Analysis
The global sustainable packaging market is divided into four regions: North America, Europe, Asia-Pacific, and LAMEA.
Asia-pacific dominates the global market
Asia-Pacific is the most significant revenue contributor and is expected to grow at a CAGR of 8.30% during the forecast period. The largest Chinese e-commerce sites and rapid delivery providers have been actively reducing the use of packaging materials. For instance, SF Express was using recyclable cartons for packaging that could be recycled ten or so times on average. In first-tier and several second-tier domestic cities, the corporation has adopted more than 100,000 such boxes, mainly to replace paper boxes and plastic bags and cut down on the use of foam blocks and tape. The business added that its initiatives are in response to the nation's need for sustainable growth in the logistics sector.
North America is expected to grow at a CAGR of 6.95% during the forecast period. During the projection period, it is predicted that increasing consumer awareness and supportive government laws would increase demand for sustainable, biodegradable packaging in the United States. According to the Environmental Protection Agency, the United States produces up to 80 million metric tonnes of packaging waste annually. The United States food and beverage industry accounts for around half of all packaging trash. The organization stated that food companies like Nestle and Unilever produce the majority of plastic garbage. Numerous of these businesses have recently promised to lessen the environmental impact of their packaging in response to public pressure and recognition of this problem.
Sustainable packaging may complicate waste streams in the UK's current trash infrastructure. Still, the government has recommended that beginning in 2023, all local councils in England should provide weekly separate food waste collections for households. Over 600 brands use the UK-wide On-Pack Recycling Label (OPRL) program for recycling. The UK government encourages its widespread adoption. Companies like Scotland-based CuanTec create cutting-edge sustainable packaging options that lessen the country's dependency on plastic. However, the ideas would lengthen the shelf life of produce, particularly seafood, by using compostable materials. As a result, it decreases food waste, which the United States now produces at a rate of around two million metric tonnes yearly.
Latin America is quickly moving toward being an area free of all single-use plastics as various countries have implemented legislation to limit or outright prohibit single-use plastics. For instance, Chile was the first nation to outlaw plastic bags, while Costa Rica aims to join the ranks of the major nations that outlawed single-use plastics entirely by 2021. Countries like the United Arab Emirates, South Africa, and Saudi Arabia help the Middle East and African market for sustainable packaging solutions grow favorably. Strict laws against single-use plastics and consumer awareness of sustainable development in these nations have fueled the market's expansion.
Segmental Analysis
The global sustainable packaging industry is segmented by process, material type, and end-user industry.
Based on process, the global sustainable packaging market is bifurcated into reusable packaging, degradable packaging, and recycled packaging.
The recycled packaging segment is the highest contributor to the market and is estimated to boost at a CAGR of 6.95% during the forecast period. The most popular sustainable packaging strategies businesses use are reducing the size or weight of packaging and utilizing more recycled and renewable materials. As a result, more paper and cardboard are being used throughout the company. Additionally, it guarantees that the packaging is recyclable and eco-friendly for future use. Packaging is a crucial tool for businesses in the food, beverage, and consumer packaged products sectors. Depending on the region, either society or the government is driving a global movement toward sustainable packaging.
Some of the products that fall under the category of reusable packaging are drums, plastic containers, IBCs, wooden pallets, metal cages, and stillages. Drums are the most flexible and modular sustainable packaging options, enabling large-scale end-user sectors like construction, food and beverage, and chemicals to carry out daily operations with little waste production or carbon footprint. The need for steel drums is also expanding due to rising activity in the chemical industry, particularly for lubricants, which were recently impacted by production cuts in Russia and OPEC. Additionally, a gradually improving scenario for oil and solvent exports among Asian-Pacific nations encourages the expansion of steel drums in the area.
Degradable packaging is being used increasingly in various industries because of its low environmental impact and high demand. More products are becoming available to end customers thanks to industry advancements like active and intelligent packaging solutions. Typically, biodegradable products are created from raw elements that are renewable, such as cellulose and starch. Degradable plastic can also break down by the enzymatic action of microbes into inorganic molecules like CO2, methane, and water. The market's growth is anticipated to be boosted during the forecast period by the participants' quick advances.
The global sustainable packaging market is bifurcated based on material type into glass, plastic, metal, and paper.
The paper segment owns the highest market and is estimated to grow at a CAGR of 7.25% during the forecast period. The fastest-growing sustainable packaging materials are those made of paper, like paper bags, pouches, and cartons. The rising trend of online retail and environmental limitations on non-biodegradable and non-recyclable packaging options gradually generates significant demand for eco-friendly paper packaging solutions. Coca-Cola conducted its first test run on paper bottles made from an extra-tough paper shell with a thin plastic liner in February 2021. To determine how well they hold up, the first test will involve 2,000 bottles. To prohibit carbonated beverages from releasing gas, the company hopes to create a bottle made entirely of materials that can be recycled.
Due to their capacity to retain chemical inertness, sterility, and non-permeability, glass bottles and containers are widely employed in the alcoholic and non-alcoholic beverage industries. Beer and other alcoholic beverages make up a sizable market segment because glass does not react with the chemicals in drinks. It is a good choice for packaging because it maintains these beverages' scent, strength, and flavor. It is packaged in dark-colored glass bottles to preserve the contents, which are vulnerable to spoiling when exposed to UV radiation. Consumers primarily acknowledge the sustainability advantages of glass packaging.
Metal packaging is employed more frequently across a wide range of end-user sectors thanks to its eco-friendly attributes. Concerned European organizations, such as Metal Packaging Europe, are making various investments and partnerships in this field. For instance, in March 2021, Metal Packaging Europe and European Aluminum unveiled a Roadmap to 100% recycling of beverage cans made of aluminum by 2030. Aluminum is becoming increasingly popular among food and beverage firms due to its capacity to keep products fresh and lightweight. The popularity of aluminum cans has increased significantly due to brands in emerging countries realizing the metal's highly appealing sustainability factor.
Based on the end-user industry, the global sustainable packaging market is bifurcated into pharmaceutical and healthcare, cosmetics and personal care, food and beverage, and other end-user industries.
The food and beverage segment is the highest contributor to the market and is estimated to boost at a CAGR of 7.05% during the forecast period. Over the past twenty years, plastic has become one of the most popular materials in the food sector. Companies use recycled plastics because they can produce packages at a low cost and adhere to sustainability standards due to the low cost of plastics manufacturing. Stokes Sauces announced the introduction of squeeze bottles manufactured only from recycled plastic in May 2020. Additionally, the bottle is entirely recyclable. It will be utilized for all five of the company's products, including the Original Barbecue, Brown Sauce, Real Mayonnaise, Tomato Ketchup, and Reduced Sugar Tomato Ketchup. It is projected that biodegradable packaging would benefit from the expanding rules on sustainable packaging.
Bioplastics are one of the leading sustainable packaging solutions in the pharmaceutical industry. Polyhydroxyalkanoate (PHA) and polylactic acid (PLA) are the two primary categories of bioplastics. The former is made with sugars derived from sugarcane, corn starch, cassava, and other sources as necessary. The final products imitate more conventional plastics like polyethylene, polypropylene, and polystyrene. The packaging of orthopedic devices, medical implants, and drug delivery systems is one of the critical uses of PLA. Additionally, the PLA material was used as a 3D printable polymer during the COVID-19 pandemic to create ventilator components and filaments for PPE (personal protective equipment).
The need for sustainable packaging solutions is rising in the personal care and cosmetics sector as governments and consumers work to switch to environmentally friendly packaging. The industry experienced an infusion of alternatives in 2020 to boost the business. Colgate released its recyclable tube; Cosmogen, a manufacturer of cosmetic applicators, introduced the idea of glue-free makeup brushes; and Quadpack was getting ready to launch its Nordic Collection jars, which use materials made of compostable wood and biopolymers. By 2025, Unilever promises that all its plastic packaging will be completely reusable, recyclable, or compostable. Consumer interest in cosmetic products is rising due to different advertising tactics.
