Global Biodegradable Packaging Market Outlook, 2028

Packaging is a technology that encloses and protects diverse products for storage, distribution, sale, and use. Increasing demand for nutritious, safe, convenient food, as well as expanding industry and consumer awareness of eco-friendly products, has been driving the worldwide biodegradable packaging market growth in recent years. The ability of materials to degrade and return to nature within a short period of time after disposal is referred to as biodegradability. Starch, polylactic acid (PLA), cellulose, polyhydroxyalkanoates (PHA), and other biodegradable polymers are used in packaging. Bio-based goods are advantageous for greenhouse gas balances due to their use of renewable resources rather than restricted resources and other environmental implications over the duration of their whole life cycles. The use of biodegradable materials is intended to enhance sustainability and reduce environmental damage caused by the disposal of oil-based polymers. With the constant demand for bottled water and non-alcoholic beverages, the market for biodegradable packaging in the beverage industry is expected to grow. Customers' propensity to want high-quality drinking water in particular; their fear of getting illnesses after drinking tainted tap water; and the portability and convenience that bottled water provides are all aspects that contribute to the demand for bottled water. Furthermore, bottled water is preferred in many developed and developing countries, and drinking water instead of soft drinks has recently gained popularity due to its health benefits. According to the International Bottled Water Association (IBWA), after consuming 13.8 Billion gallons of bottled water in 2018, Americans prefer it over other packaged beverages. According to a recent study by The Harris Poll on behalf of the International Bottled Water Association (IBWA), more than 90% of Americans expect to see bottled water wherever other beverages are sold. Various governments and organizations are attempting to eliminate the usage of single-use plastic packaging, creating a positive market climate for biodegradable packaging. In developing nations like India, where packaging waste has become a big concern, local and federal governments have moved to limit the use of single-use plastic. Several businesses have begun to move to environmentally friendly alternatives. In India, for example, a ban on certain single-use plastic items went into force on July 1, 2022. Similarly, in order to combat plastic pollution, the European Union banned single-use plastic plates, straws, cutlery, balloon sticks, cotton buds, and other items in July 2021. Furthermore, the European Union has restricted the use of expanded polystyrene cups, food and beverage containers, and all Oxo-degradable plastic items.

According to the research report, “Global Biodegradable Packaging Market Outlook, 2028” the market is anticipated to cross USD 135 Billion by 2028, increasing from USD 94.16 Billion in 2022. The market is expected to grow with 6.62% CAGR by 2023-28. As plastic packaging is non-biodegradable and takes 500 years to decompose, manufacturers, traders, and consumers have become increasingly worried about environmental problems. People have begun to use biodegradable and recyclable plastic or other materials for packing and labelling, such as papers or cardboard. Biodegradable packaging is made of natural substances such as petroleum and corn-based biodegradable, and these packaging materials are easy to recycle and decompose in the environment. Consumer awareness of the importance of biodegradable packaging in protecting the environment and controlling pollution is a key factor driving the growth of the global biodegradable packaging market. Food and beverage packaging, pharmaceutical packaging, and home care product packaging are all examples of biodegradable packaging. Many major players, including Pepsi and Coca-Cola, use a recyclable PET plastic container that is easily recyclable and 100% compostable. Many other firms, including Real and Tropicana, use biodegradable packaging comprised of paper and plastic composite material. Pharmaceutical businesses are also adopting eco-friendly packaging material to pack various dosages of medicines because it is 100% safe and non-toxic in nature. Rising demand for food and drinks is a major driver of the worldwide biodegradable packaging industry. The widespread usage of starch and PLA as biodegradable packaging materials in the food and beverage and pharmaceutical industries is expected to drive the biodegradable packaging market. This is because starch and PLA polymers have considerable strength, flexibility, and recyclability. The overuse of corrugated and flexible materials for personal/homecare packaging applications is the primary driver of the biodegradable packaging market's growth.

In 2022, Europe has been leading the biodegradable packaging market due to regulatory initiatives, consumer awareness and a strong focus on sustainability.

The European Union has implemented strict regulations and policies aimed at reducing plastic waste and promoting sustainable practices. Measures such as the Single-Use Plastics Directive and the Circular Economy Action Plan set targets for reducing plastic waste and encouraging the use of environmentally friendly packaging materials, including biodegradable options. European consumers have shown a growing awareness and concern for environmental issues, including plastic pollution and its impact on ecosystems. This awareness has driven demand for eco-friendly packaging options, prompting businesses to invest in biodegradable solutions to meet consumer expectations. Europe has a strong tradition of innovation and research in the field of sustainable packaging materials. Many European companies and research institutions are actively working on developing advanced biodegradable materials that can replace traditional plastics without compromising product quality or safety. Many European companies have incorporated sustainability into their corporate strategies, committing to reducing their environmental footprint. This includes using biodegradable packaging as part of their sustainability efforts. Several European brands and retailers have adopted biodegradable packaging solutions for their products. This serves as a powerful marketing tool to attract environmentally conscious consumers. Europe has well-established eco-labelling and certification schemes that help consumers identify and trust products with environmentally friendly packaging. These schemes can boost the adoption of biodegradable packaging materials. European countries and organizations often collaborate on sustainability initiatives, creating a supportive ecosystem for the biodegradable packaging industry. This collaborative approach can accelerate the development and adoption of such packaging solutions.

Based on the types, paper segment is leading the market as it is inherently biodegradable, made from natural fibres such as wood pulp. When discarded, it can break down in the environment relatively quickly, especially when compared to plastics or other non-biodegradable materials.

Paper is sourced from trees, which are a renewable resource. Responsible forestry practices can ensure a sustainable supply of wood for paper production, making it an environmentally friendly option. Consumers are generally more familiar and comfortable with paper-based packaging, as it has been in use for centuries. This familiarity and trust make it a popular choice for both businesses and consumers. Paper can be used for a wide range of packaging applications, from corrugated cardboard boxes to paper bags, cartons, and wraps. Its versatility makes it suitable for various products and industries. Paper packaging can be easily customized with printing, branding, and various finishing options. This makes it an attractive choice for businesses looking to create visually appealing and branded packaging. While not all paper products are biodegradable, many are recyclable. Paper can be recycled into new paper products, reducing the environmental impact even further. Many businesses are aligning their operations with sustainability goals. Using paper-based packaging can be seen as a part of these initiatives, as it's considered more eco-friendly than plastic alternatives. The production of paper, especially when sourced sustainably, typically has a lower environmental impact compared to the production of plastics. This includes factors like energy consumption and greenhouse gas emissions. Given the growing concern over plastic waste and its environmental impact, businesses and consumers are increasingly seeking alternatives. Paper serves as a practical and readily available substitute for many plastic packaging applications. Paper packaging often has a natural and appealing appearance, which can enhance the presentation of a product. This aesthetic quality is a significant factor in its adoption.

Based on the paper types, corrugated fiberboard is known for its strength and durability, making it an excellent choice for protecting products during shipping and handling. This material can withstand stacking, crushing, and other forms of mechanical stress. Corrugated fiberboard is known for its strength and durability, making it an excellent choice for protecting products during shipping and handling. This material can withstand stacking, crushing, and other forms of mechanical stress. Unlike plastic-based packaging materials, corrugated fiberboard is biodegradable. When it is discarded, it can break down naturally in the environment, reducing the long-term environmental impact. Despite its strength, corrugated fiberboard is relatively lightweight, which can help reduce transportation costs and associated emissions. This weight advantage is particularly important for e-commerce and shipping applications. On the other hand, Cellulose-based plastics, also known as cellulose acetate or cellulose nitrate, have gained prominence in the biodegradable packaging market. Cellulose is a naturally occurring biopolymer derived from plant sources, and cellulose-based plastics are designed to be biodegradable. When disposed of properly, they break down more readily in the environment compared to traditional plastics, reducing the long-term environmental impact. Cellulose is sourced from renewable plant materials, such as wood, cotton, and other cellulose-rich plants. This makes cellulose-based plastics more sustainable and less reliant on fossil fuels, a significant advantage in the context of environmental sustainability. The production of cellulose-based plastics generally generates fewer greenhouse gas emissions and pollutants compared to conventional plastics. This aligns with environmental goals to reduce pollution and combat climate change.

Based on the application, the market for green packaging worldwide is dominated by the food and beverage industry due to its mobility, extended shelf life, and simple manufacture, convenience food.

In the food packaging sector, safety concerns regarding food contamination from non-biodegradable materials have led to a rise in demand for biodegradable packaging. Moreover, consumer preference for natural and organic products extends to packaging, adding momentum to the segment. Enhanced preservation technologies have made it possible to maintain food quality for longer periods, increasing the acceptability of biodegradable food packaging. The growth of the organic food market also necessitates eco-friendly packaging solutions. Finally, stringent food safety regulations in various countries are compelling manufacturers to adopt biodegradable packaging. Due to high strength, adaptability, and recyclability, biodegradable polymers, such as starch-based plastic, polyhydroxy butyrate, and poly-lactic acid, are used for food packaging. Additionally, recycled packaging materials like polycaprolactone, which have excellent biodegradability, biocompatibility, and bioresorbable, are used in food packaging. However, bottled water and non-alcoholic beverages, the market for biodegradable packaging in the beverage industry is expected to grow. The demand for bottled water is attributed to three factors: customers' predisposition to specifically demand high-quality drinking water; the fear of diseases brought on by drinking tainted tap water; and the portability and convenience offered by bottled water. For beverage packaging, sustainability initiatives by major beverage companies are driving the shift to biodegradable options. Consumer pressure and community awareness regarding plastic waste in oceans and landfills are also significant factors. In pharmaceuticals, the drive toward biodegradable packaging is motivated by the need for safer, non-toxic materials. Government regulations often require eco-friendly alternatives for medical packaging. For personal and homecare products, consumer preference for eco-friendly and non-toxic packaging options is a strong driver. Brands are increasingly adopting sustainable practices to meet consumer demands and to align with their corporate social responsibility objectives.

Wholesalers and distributors occupy a central position in the supply chain, connecting manufacturers and suppliers with retailers and end consumers. This positioning allows them to influence the adoption of biodegradable packaging materials and offer these materials to a wide range of customers.

Wholesalers and distributors typically offer a diverse range of products, including biodegradable packaging options. They can provide a one-stop shop for retailers and businesses seeking various packaging solutions, making it convenient for customers to access these eco-friendly alternatives. Wholesalers and distributors often have a deep understanding of market trends and consumer preferences. They can use this knowledge to source and promote biodegradable packaging materials that align with the growing demand for sustainable and eco-friendly products. These businesses often have established relationships with both suppliers and customers. They can leverage their networks to encourage the adoption of biodegradable packaging materials and promote these options to retailers and businesses. Wholesalers and distributors can achieve economies of scale by purchasing and distributing biodegradable packaging materials in larger quantities. This can lead to cost savings that can be passed on to customers, making eco-friendly packaging more cost-competitive. Wholesalers and distributors have well-developed logistics and distribution systems. They can efficiently deliver biodegradable packaging materials to retailers and businesses, ensuring that these materials are readily available to meet customer demand. They often provide education and support to their customers, helping them understand the benefits and proper use of biodegradable packaging materials. This educational role is crucial in raising awareness and driving adoption. Many wholesalers and distributors work closely with their customers to provide customized packaging solutions. They can tailor biodegradable packaging to meet the specific needs of different industries and businesses. In regions where regulations mandate the use of biodegradable or environmentally friendly packaging, wholesalers and distributors are well-positioned to provide compliant options to businesses. Wholesalers and distributors are responsive to changes in consumer demand. As consumers increasingly prefer products with eco-friendly packaging, these businesses are motivated to stock and promote biodegradable materials to meet this demand.

Market Drivers

• Environmental Concerns: One of the primary drivers for the global biodegradable packaging market is the growing concern for environmental sustainability. As the detrimental impacts of plastic pollution on ecosystems and the planet become more evident, consumers, businesses, and governments are increasingly focused on reducing their environmental footprint. Biodegradable packaging offers a sustainable alternative to traditional plastics, as it breaks down naturally and reduces the burden of non-biodegradable waste in landfills and oceans. This heightened awareness of environmental issues is encouraging a shift towards eco-friendly packaging solutions and driving demand for biodegradable options.
• Regulatory Support: Government regulations and policies are playing a crucial role in propelling the biodegradable packaging market forward. Many countries and regions are implementing bans or restrictions on single-use plastics, while also encouraging the use of sustainable packaging materials through incentives and regulations. These measures create a conducive environment for businesses to invest in biodegradable packaging technologies and develop innovative solutions. Regulatory support not only stimulates the demand for biodegradable packaging but also fosters innovation in this sector as companies seek to meet the evolving compliance requirements.

Market Challenges

• Cost and Production Challenges: While the demand for biodegradable packaging is rising, one of the persistent challenges lies in the cost of production. Biodegradable materials are often more expensive to manufacture than conventional plastics. Businesses need to strike a balance between producing cost-effective biodegradable packaging and ensuring that it meets market demand and consumer expectations. Some consumers may be hesitant to pay a premium for eco-friendly packaging, making it essential for companies to optimize production processes and reduce costs without compromising sustainability.
• Performance and Shelf Life: Another challenge in the biodegradable packaging market is related to the performance and shelf life of these materials. Biodegradable packaging may not always offer the same level of durability, barrier properties, and longevity as traditional plastics. This can be a particular concern in industries where product preservation and safety are paramount, such as the food and pharmaceutical sectors. Overcoming these challenges requires ongoing research and development to enhance the functional properties of biodegradable materials while maintaining their biodegradability.

Market Trends

• Innovative Materials: A prominent trend in the biodegradable packaging market is the development of innovative materials. This includes the creation of bioplastics derived from renewable resources like corn, sugarcane, or algae. These materials offer improved performance characteristics, such as better strength, flexibility, and barrier properties, addressing some of the performance challenges associated with biodegradable packaging. Additionally, advanced compostable materials are emerging, providing alternatives that can naturally break down without leaving harmful residues in the environment.
• Circular Economy Initiatives: The concept of a circular economy, which emphasizes minimizing waste and maximizing resource utilization, is gaining traction in the biodegradable packaging sector. Companies are increasingly designing packaging with circularity in mind, ensuring that it can be easily recycled, composted, or otherwise repurposed at the end of its life cycle. This trend aligns with the broader goals of sustainability and waste reduction, as it aims to create a closed-loop system that reduces the environmental impact of packaging materials. Circular economy initiatives are shaping the future of biodegradable packaging, making it an integral part of sustainable product design and waste management strategies.

Covid-19 Impacts

COVID-19 disrupted global supply chains, leading to challenges in the production and distribution of biodegradable packaging materials. Delays in the supply of raw materials and disruptions in manufacturing facilities affected the availability of these products. Some consumers and businesses may have been hesitant to invest in higher-cost biodegradable packaging options due to financial uncertainties and the perceived premium associated with eco-friendly materials. While some regions continued to prioritize sustainability and implemented regulations to reduce single-use plastics, in others, the focus shifted towards addressing immediate health concerns. This divergence in priorities affected the speed of regulatory changes and the extent to which biodegradable packaging was promoted or mandated. The closure of restaurants and reduced foodservice operations led to a decline in the demand for foodservice packaging, which often includes biodegradable options. This affected the segment of the biodegradable packaging market catering to the food and beverage industry. The pandemic has heightened awareness of health and hygiene, leading to a surge in demand for single-use, disposable items, including biodegradable packaging. Consumers became more conscious of the materials used in packaging and their impact on health and the environment, leading to a preference for eco-friendly options. With lockdowns and restrictions in place, e-commerce and online shopping experienced significant growth during the pandemic. This shift in consumer behaviour increased the demand for packaging materials, including biodegradable packaging, as companies sought sustainable alternatives for shipping and delivery to reduce their carbon footprint.

Competitive Landscape

Leaders in the global biodegradable packaging market are working on developing new materials that break down naturally without causing environmental harm. These companies are collaborating with scientists and researchers to explore innovative bio-based materials. Additionally, they are making strategic investments in manufacturing processes that can scale up the production of eco-friendly packaging solutions. Regulatory compliance is a significant focus, where they are working to meet the strict standards set for biodegradable materials. Furthermore, they are conducting life-cycle assessments to ensure that their products are genuinely sustainable from production to disposal. To expand their geographical reach, they are entering into collaborations with local distributors in emerging markets. They are also engaging with customers to understand their needs and fine-tuning their products accordingly. The market studied comprises WestRock Company, The Smurfit Kappa Group Plc, BASF SE, The International Paper Company, Amcor Plc, DS Smith plc, Mondi Group, Tetra Laval Group, Elevate Packaging, Kruger Inc., Ranpak Holding Corporation, Sealed Air Corporation, DuPont, Clearwater Paper Corporation, Oji Holdings Corporation, Stora Enso Oyj, Genpak, LLC, Novamont S.p.A, Kaneka Corporation and Huhtamaki Group.

Key Developments

• In August 2023, Amcor PLC announced the North American launch of curbside-recyclable AmFiber Performance Paper packaging, part of the company’s AmFiber portfolio. Prequalified by How2Recycle, performance paper meets the repulpability standards for curbside recycling, allowing brands to provide consumers with more sustainable end-of-life outcomes for packaging.
• In May 2022, Amcor Rigid Packaging (ARP) announced the creation and launch of PowerPostTM. PowerPost technology produces nearly one-third lighter bottles with 30% less energy and 30% less carbon than most 20 oz. bottles by actively dislodging the vacuum in the container after filling.
• In January 2022, Amcor PLC launched AmFiberTM, a new platform for paper-based packaging products. AmFiber's innovations aim to redefine the functionality of traditional paper packaging, offering a wider range of functional benefits to meet the changing needs of consumers. AmFiber's product is an innovative solution tailored to provide snacks and confectionery products to European customers with recyclable packaging that provides a high barrier to oxygen and moisture.
• In January 2022, TIPA Corp., an Israeli-based company, nabbed a USD 70 million investment for developing compostable packaging solutions. According to the company, its eco-friendly films and laminates mimic the properties and functions of traditional plastic materials, including durability, barrier properties, and shelf stability.

Considered in this report:

• Geography: Global
• Historic year: 2017
• Base year: 2022
• Estimated year: 2023
• Forecast year: 2028

Aspects covered in this report:

• Global Biodegradable Packaging market Outlook with its value and forecast along with its segments
• Region & Country-wise Biodegradable Packaging market analysis
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendation

Regions & Countries covered in the report

• North America (United States, Canada, Mexico)
• Europe (Germany, United Kingdom, France, Spain, Italy, Russia)
• Asia-Pacific (China, Japan, India, Australia, South Korea)
• South America (Brazil, Argentina, Colombia)
• Middle-East & Africa (UAE, Saudi Arabia, South Africa)

By Material Type:

• Paper
• Plastic
• Bagasse

By Paper:

• Corrugated Fiberboard
• Kraft Paper
• Paperboard
• Flexible Paper
• Boxboard
• Others (Greaseproof paper, Corrugated BubbleWrap)

By Plastic:

• Cellulose-based plastics
• Polylactic acid (PLA)
• Starch Based
• Poly-3-Hydroxybutyrate (PHB)
• Polyhydroxyalkanoates (PHA)
• Others (protein-based bio-plastics, genetically modified bio-plastics)

By Application:

• Food Packaging
• Beverage Packaging
• Personal/Homecare Packaging
• Healthcare/Pharmaceutical
• Logistic
• Others (Agriculture)

By Distribution Channel:

• Wholesalers
• Retailers
• Others

Intended audience:

This report can be useful to industry consultants, manufacturers, suppliers, associations, and organisations related to the Biodegradable Packaging industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing and presentations, it will also increase competitive knowledge about the industry.