The sustainable packaging market is projected to grow at a CAGR of 5.03% to reach US$348.919 billion by 2026, from US$247.435 billion in 2019.
Sustainable packaging is defined as an approach towards packaging that is sourced, developed, and used in a way that minimizes the environmental impact.
Green marketing is something only forward-looking businesses emphasized several years ago when it was unusual for businesses to take environmentally friendly initiatives. The current trend toward pursuing sustainable practices is not merely nice, it is becoming the new norm. Private and public organizations working together to speed up the environmental change, in keeping with market expectations, open up vast opportunities.
Food & beverage products are increasingly being packaged with sustainable materials, resulting in further growth for the market. A major catalyst in this process is the emergence of sustainable packaging materials that reduce the impact on the environment.
Even the cosmetics packaging industry is working towards creating more environmentally friendly packaging options that can take the cosmetics market to a whole new level. The market growth is also driven by initiatives to decrease the use of non-degradable packaging materials, the growth of sustainable packaging lines, and green packaging strategies.
After the COVID-19 outbreak became a pandemic, unfortunately, the focus began shifting away from sustainability to the virus and its impact. Additionally, the pandemic has caused a rise in plastic waste. It has been reported that a great deal of personal protective equipment (PPE) is being discarded carelessly Despite efforts to ban single-use plastics, the demand for bottled water, plastic bags, disposable wipes, and sanitizers is increasing.
Environmental concerns have led to a greater interest in sustainable packaging and processing operations due to consumer awareness. As part of sustainability initiatives, manufacturers have reduced the source material by downgrading, creating thinner and lighter packaging, and reducing waste. Modern consumers increasingly consider eco-friendliness, ethics, quality, safety, and product costs when selecting products. Legislative packaging regulations also enforce a number of these issues, which will benefit the global green packaging market.
As the packaging materials can be recycled, renewed, and reused, eco-friendly biodegradable wrapping materials like paper and paper boards contribute to maintaining the sustainability of the environment. Also, there is low awareness of the importance of sustainable packaging among consumers in developing countries. High recycling rates and set up costs have, in turn, prevented many manufacturers from implementing sustainable packaging solutions. The World Bank estimates that global solid waste generation will reach 4.7 billion tons by 2050. The solid waste generated in the coming years will be so large that recycling capacity cannot keep up with the output. A more environmentally friendly packaging solution is needed to reduce the huge amount of solid waste generated each year.
The rise of 'zero waste' shops and the sharp increase in the use of refillable water bottles are just a few examples of how consumers are contributing to the reduction of waste. A majority of the individuals believe it's time to move away from single-use packaging in favor of packaging made from recycled materials. Millennials are willing to pay an extra 10% to 25% for sustainable products and services, according to the World Economic Forum. More and more, consumers expect - and choose - healthier, greener, and more sustainable options. In a developing market where social-economic inequality is extreme, environmental threats are growing, and opportunities to earn decent wages are few, the percentage of people willing to pay more is lower.
Increasing business responsiveness to consumers:
A change in consumer attitude toward plastic packaging and waste is starting to affect businesses, and they are making changes as a result. Sustainable practices are now a priority for businesses since they realize that losing paying customers will cost them if it is not implemented correctly. The consumer pressure to be more environmentally responsible has resulted in businesses adopting voluntary targets and initiatives that go beyond the regulatory requirements. Many global brands, including Unilever, Nestlé, and IKEA, have announced their commitment to eliminate single-use plastic waste within the next 10 years.
Corporate Social Responsibility:
Focus on corporate social responsibility means a business is committed to enhancing the environment and society, not contributing to its destruction. Walmart, one of the largest retailers in the world recognizes its influence and has taken steps towards a leadership role in sustainable packaging. It aims to have 100% recyclable, reusable and compostable packaging. When retailers like Walmart make a statement like this, other business giants take it seriously.
Lower carbon footprint, lower shipping cost:
Many brands are concerned about their carbon footprint, as this contributes to climate change and natural disasters. HP is one such brand. Since most of its products are sold in the USA and Europe, HP wanted to devise a sustainable packaging solution. Environmental friendly packaging with a minimal impact on the environment, while also providing protection for the products during long travels from the factory to the customer. HP began using virgin fiber produced from responsibly managed forests for its fluting and liner. The fiber is extremely strong and was able to reduce packaging materials by 29%, thereby saving materials and maintaining protection. Additionally, HP benefits from the reduced box weight, which reduces shipping costs and transportation emissions.
Overcapacity could be a major hindrance for this industry. Non-biodegradable plastic bags remain the most preferred packaging material in the world due to their lower cost. Because of this, packaging companies are unable to match their production capacity with their sales volume. It is costly to use raw materials such as biobased monomers, liquid biofuels, cellulosic fibers, and biopolymers. As a result, the cost is passed on to consumers.
Impact of Covid-19 on the Sustainable Packaging Market
Increasingly, end-user industries like personal care, food & beverage, and pharmaceuticals have seen drastic revenue losses since COVID-19 became effective. Furthermore, the lockdown triggered by Coronavirus led to a halt to the purchase of several important raw materials on the global market, which unfortunately led to problems in obtaining raw materials, attracting workers, and delivering products. With the steady increase in demand, however, the sustainable packaging market is quickly returning to normal. A robust market is further estimated to be available due to increased production activities and demand for storage & distribution applications.
The sustainable packaging market is experiencing intense competition due to opportunities that benefit existing players and enable new entry into the market. The entry barriers to new players are relatively low, and packaging companies are recording a significant uptick in sales, thereby intensifying the market's competitive rivalry.
- The development of innovative sustainable packaging products is crucial for the growth of this market as well. A good example is Ecovative Design. It uses the root structure of mushrooms to make packaging. The design has been adopted by companies such as Dell and Ikea as of 2019.
- Likewise, The Guardian, became UK’s first newspaper to switch to biodegradable packaging in 2019 by stopping using plastic packaging. In response to readers' feedback, the newspaper decided to change its packaging and no more rely on plastic, hence, increasing its production cost.
- Tetra Pak, a multinational packaging company for food, has been researching environmentally friendly packaging solutions as well as ways to reduce costs for manufacturers. The company launched its Tetra Classic Aseptic 65 ml Cube packaging solution for dairy, juice, and liquid food. With this innovative design, every six triangle packaging product can be formed into a cube. With this design innovation, less space is taken up, storage and distribution are optimized, and fewer secondary packaging materials are required.
- Hindustan Unilever Limited (HUL) has aimed to make 100% recyclable packaging by 2025. HUL reduced 1,700 tonnes of polymer waste in 2017 by switching from commodity polymers to performance-based polymers. As a result of its redesigned packaging, the company saved 1300 tonnes of paper and 95 tonnes of glass. Globally, the company has been able to save one-third of its plastic packaging since 2010.
- Hansen & Mauritz AB, also known as H&M, is a multinational clothing retailer from Sweden. By 2020, the brand planned to switch to 100% sustainable cotton. During the past years, the company's manufacturing, supply chain, and packaging operations have reduced emissions by 35%. Over 64% of stores have a recycling system for store waste. The garment collecting initiative of H&M in 2017 collected more than 17K tons of textiles and beauty containers for reuse and recycling.
By Packaging Material
- Primary Packaging
- Secondary Packaging
- Tertiary Packaging
By End-User Industry
- Food and Beverage
- Personal Care
- North America
- South America
- Middle East and Africa
- Saudi Arabia
- Asia Pacific
What is the estimated value of the Sustainable Packaging Market?
What is the growth rate of the Sustainable Packaging Market?
What is the forecasted size of the Sustainable Packaging Market?
Who are the key companies in the Sustainable Packaging Market?
1.2. Market Segmentation
4.2. Market Restraints
4.3. Porter's Five Forces Analysis
4.3.1. Bargaining Power of Suppliers
4.3.2. Bargaining Power of Buyers
4.3.3. The threat of New Entrants
4.3.4. Threat of Substitutes
4.3.5. Competitive Rivalry in the Industry
4.4. Industry Value Chain Analysis
6.2. Secondary Packaging
6.3. Tertiary Packaging
7.2. Food and Beverage
7.3. Personal Care
8.2. South America
8.4. Middle East and Africa
8.4.1. Saudi Arabia
8.5. 7.6. Asia Pacific
9.2. Recent Investment and Deals
9.3. Strategies of Key Players
10.2. Mondi PLC
10.3. Smurfit Kappa Group
10.4. Sonoco Products
10.5. WestRock Company
10.6. BASF SE
10.7. Tetra Laval International SA
10.8. Ball Corporation
10.9. Sealed Air Corporation
- Amcor Limited
- Mondi PLC
- Smurfit Kappa Group
- Sonoco Products
- WestRock Company
- BASF SE
- Tetra Laval International SA
- Ball Corporation
- Sealed Air Corporation