SUSTAINABLE PACKAGING MARKET ANALYSIS

Market Size and Trends

Global sustainable packaging market is estimated to be valued at USD 400.34 Bn in 2024 and is expected to reach USD 649.42 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 7.2% from 2024 to 2031.

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The market is witnessing strong growth due to rising environmental concerns among consumers as well as regulatory push for eco-friendly alternatives. With sustainability becoming the top priority, major FMCG as well as e-commerce companies are strategizing to reduce waste and lower carbon footprint through investments in sustainable packaging solutions. The advancements in materials science have enabled development of novel packaging solutions that are recyclable as well as compostable, thus, offering more environment friendly substitutes.

Rising Environmental Concerns

Sustainable packaging has emerged as an important issue globally in the past decade. With increasing environmental degradation and the looming threats of climate change, people around the world are becoming more concerned about the negative impact of plastic and other non-degradable materials that are commonly used in packaging. There is a growing realization that if one does not switch to more eco-friendly alternatives, one may severely damage the planet in irreversible ways. Many national governments and international organizations are highlighting the need to adopt circular economy principles and promote sustainable practices to achieve long term environmental sustainability. Regional bans and regulations on single-use plastics have also raised awareness about sustainable packaging. More companies and brands are facing pressure from environmentally-conscious consumers to reduce waste and use packaging made from recycled or renewable sources. Young consumers, in particular, want to buy from companies that are committed to green values. Various studies have shown that many would be willing to pay slightly higher prices for products in sustainable packaging. Non-governmental organizations are actively campaigning on issues like plastic pollution in oceans. The media also regularly reports on topics such as the alarming increase in plastic waste and its harmful effects. These factors have made sustainability a priority for government policymakers, businesses and individuals.

Market Concentration and Competitive Landscape

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Increasing Policy Support and Regulations is significantly driving the growth of Global Sustainable Packaging Market. Governments across the world are introducing stringent regulations and policies to curb plastic waste generation and promote use of sustainable and eco-friendly packaging options. For instance, European Union passed a directive in 2019 banning select single-use plastic items like straws, cutlery, and plates by 2021. The directive aims to reduce marine plastic litter and move EU countries towards more circular economy. Similarly, governments in many Asian and Latin American countries have either banned or imposed heavy tax on single-use plastic bags and Styrofoam containers.  These increasing regulatory pressures are encouraging packaging manufacturers and brands to shift towards more sustainable packaging materials and solutions. Many major brands and retailers have announced commitments and targets to use recycled content in their packaging or make them reusable/recyclable by certain timelines. For example, major retailers like Walmart, Target, and Aldi have targets that 100% of their private label packaging will be recyclable, reusable or compostable by 2025. Food and beverage giants like PepsiCo, Coca-Cola, and Nestle have also committed to use minimum 25% recycled plastic in their bottles by 2025. According to United Nations Environment Programme (UNEP) report published in 2022, plastic pollution has severe economic impacts with losses estimated at $3-12 billion to marine ecosystems annually. The report also highlighted need for global agreement on fixing plastic pollution.

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Consumers across the world are becoming aware about the pressing need to reduce plastic pollution and move towards sustainable alternatives that minimize environmental footprint. This change in mindset is getting reflected in their purchasing decisions as these seek out brands that use sustainable and recycled materials in their packaging.  Many consumers, especially millennials and generation Z who research products online, check social media platforms of brands to see what initiatives these are undertaking to reduce waste. These look for terms like recycled, reusable, compostable, and biodegradable on the packaging to feel good about their purchase. This conscious consumerism is nudging big corporates to overhaul their packaging strategies and cater to the rising demand for sustainable choices. However, making the switch from conventional plastic and non-recycled materials to more environment-friendly alternatives requires reworking of entire supply chains and production lines. It involves huge capital investments and risks which restrains quick transition for some players. The shift is also constrained by lack of widespread recycling infrastructure and programs especially in developing nations. When consumers are unable to properly dispose off or recycle the sustainable packaging post-use due to insufficient local waste management systems, it discourage them to opt for green options.

 Opportunity: Increased government legislation against single-use plastics

Increased government legislation against single-use plastics will drive packaging innovation. More companies are committing to sustainability goals which will raise demand. Consumers, especially millennials and Gen Z, indicate a strong willingness to pay extra for eco-friendly products.

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In terms of material type, paper segment is estimated to contribute the 35.6% of the market share in 2024, owing to its renewable nature and wide array of uses. Paper is derived from wood or plant fibers, and can be regrown and replenished, making it a sustainable material choice. It also has the advantage of being lightweight yet durable, especially when layered or coated. Paper is highly versatile in the forms it can take such as cardboard, cartons, bags, boxes, and wrappings. It is suitable for most packaging applications across various industries.  Being renewable and biodegradable provides paper an edge over plastic and metal materials. The widest use of paper is in the corrugated packaging segment. It offers strength as well as printability, and is used extensively for transit packaging of goods. Paper also performs well as a wrapping or carrier for food and other consumable products. New innovations are expanding paper's uses further via techniques like wax or plastic coatings that improve its barrier properties. Overall, paper's natural, environment-friendly composition and adaptability make it the top choice in sustainable packaging materials.

Insights, By Process: Recyclability Boosts the Recycled Packaging Process

In terms of process, recycled packaging segment is estimated to contribute the 37.8% of the market share in 2024, due to growing push for circular economy initiatives. Recycled packaging involves using post-consumer or post-industrial scrap materials to manufacture new packaging. This closed loop process provides both economic and ecological benefits. Recycling saves valuable raw material resources from being used to make new packaging from scratch. It takes much less energy to reprocess waste materials than to extract and manufacture virgin fibers, plastics, metals and others. Recycling also reduces industrial pollution as well as greenhouse gas emissions associated with material extraction and transport.  Many governments now mandate minimum recycled content levels in packaging or offer incentives for its use. Brand owners also promote the recyclability of their packages to appeal to environmentally conscious consumers. The availability of infrastructure to collect, sort and reprocess waste packaging back into feedstock has increased drastically. Advanced recycling technologies are making even multi-material flexible pouches and films recyclable now.  With the linear take-make-waste model being replaced worldwide, recycled packaging provides a hands-on way for industries and individuals to participate in the circular flow of resources. It embraces the classic reduce-reuse-recycle mantra and brings packaging production more in line with ecological sustainability principles. This boosts its widespread preference and higher share over other processes.

Insights, By End User Industry: Food and beverage drives recycled packaging adoption

In terms of end user industry, food and beverage segment is estimated to contribute the 37.8% of the market share in 2024 due to specific regulatory requirements and consumer demands in this sector.  Stringent safety and hygiene rules determine how food is packaged. Yet consumers increasingly seek sustainable options and companies face government waste reduction targets. Recycled packaging satisfies both through techniques like sterile processing of waste paper fibers and use of high-quality resins in plastic recycling. Food-grade recycled paper and rigid plastic help replace virgin material’s intensive layers and trays.  Recycled material is also ideal for secondary or tertiary food packaging like shipping boxes and bags. Branded items wish to display green credentials through such outer coverings. Shelf-stable and dry grocery goods suit recycled paperboard cartons and wrappings, while recycled PET and HDPE work for bottles and jugs.  

Regional Insights

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North America has emerged as the largest market for sustainable packaging in the recent years. The region is estimated to account for over 36.7% of the market share in 2024, owing to strong governmental support and presence of key industry players. Countries like the U.S. and Canada have stringent regulations around the use of plastics and promotion of sustainable alternatives. Various federal and state-level initiatives promote the adoption of recyclable and reusable packaging materials. Many consumer brands in North America have also committed to transition to more sustainable packaging formats to meet consumer demand for eco-friendly options.

The Asia Pacific region has shown tremendous growth in the sustainable packaging space and is poised to dominate the future market landscape. Countries like India, China, Indonesia and Vietnam have seen double digit annual growth rates due to rapid industrialization and growing emphasis on environmental protection policies. Strong GDP growth coupled with rising standards of living have propelled the consumption of consumer packaged goods.

Market Report Scope

Key Developments

• On March 26, 2024, 3M launched 3M Padded Automatable Curbside Recyclable (PACR) Mailer Material, a padded, paper-based mailer material that can be recycled curbside.
• In 2023, Electrolux Group launches new, more sustainable packaging
• In 2023, Huhtamaki launches sustainable flexible packaging innovation.
• In 2022, Fameccanica launches new sustainable packaging system Greenpackt

*Definition: Global Sustainable Packaging Market consists of companies that manufacture and distribute packaging products and materials designed to be reusable, recyclable, biodegradable, or otherwise more environmentally friendly than traditional packaging. This includes packaging made from renewable and recycled content, as well as packaging that produces less waste throughout its lifecycle due to factors like reduced material usage, reusable design, recyclability, and compostability.

Market Segmentation

• Material Type Insights (Revenue, USD Bn & KT, 2019 - 2031)
  • Glass
  • Plastic
  • Metal
  • Paper
  • Others
•  Process Insights (Revenue, USD Bn & KT, 2019 - 2031)
  • Reusable Packaging
  • Degradable Packaging
  • Recycled Packaging
• End User Industry Insights (Revenue, USD Bn & KT, 2019 - 2031)
  • Pharmaceutical and Healthcare
  • Cosmetics and Personal Care
  • Food and Beverage
  • Other End user Industries
• Regional Insights (Revenue, USD Bn & KT, 2019 - 2031)
  • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • Spain
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East & Africa
    • GCC Countries
    • Israel
    • Rest of Middle East & Africa
• Key Players Insights
  • Amcor Limited
  • Westrock Company
  • TetraPak International S.A.
  • Sonoco Products Company
  • Smurfit Kappa Group PLC
  • Sealed Air Corporation
  • Mondi PLC
  • Huhtamaki OYJ
  • BASF SE
  • Ardagh Group S.A
  • Ball Corporation
  • Crown Holdings, Inc.
  • DS Smith Plc
  • Genpak LLC
  • International Paper Company
  • Pcakmile
  • Ecoware 
  • Greenhandle Products Private Limited
  • Sustainable Packaging Industries
  • Mpacks