Biodegradable Packaging – Insights.
Packaging is a technology that involves enclosing and protecting various types of products for storage, distribution, sale and use. The increasing demand for healthy, safe, convenience food, and growing industry & consumer awareness towards eco-friendly products in the recent past in Asia Pacific, Europe and North America respectively, has been rapidly driving the global biodegradable packaging market. Biodegradable refers to the ability of materials to break down and return to nature within a short time after disposal. The biodegradable polymers used for packaging are starch, polylactic acid (PLA), cellulose, polyhydroxyalkanoates (PHA), and others. The extensive use of starch and PLA as a biodegradable packaging material for food & beverages, and pharmaceuticals end-use industry is projected to boost growth of the biodegradable packaging market during 2017-2025. This is due to the high strength, versatility and recyclability properties of starch and PLA polymers. Furthermore, paper biodegradable packaging comprises mainly Kraft, flexible, corrugated, and box board materials, and is expected to be the fastest growing product type during the forecast period. The excessive use of corrugated, and flexible materials for the personal/homecare packaging applications is the key factor for the growth of biodegradable packaging during the forecast period.
The global biodegradable packaging is segmented into two types of product segment, namely, plastic biodegradable packaging and paper biodegradable packaging. Plastics was the largest product type segment in the global Biodegradable Packaging market in 2016 and is expected to retain its dominance throughout the forecast period. The plastic product segment is further divided into starch, polylactic acid (PLA), polyhydroxyalkanoates (PHA), and others. The starch and PLA are the dominant product type sub-segments, and are highly used in food and beverages end-use industry due to their high biodegradable property, and recyclability nature. The growing demand for packaged food, growing population, and rapidly expanding beverages industry in Europe, North America, and Asia-Pacific are key growth drivers for the global biodegradable packaging market.
The global Biodegradable Packaging market was valued at US$ 3,927.0 million and 969.9 kilo tons in 2016 and is expected to expand at a CAGR of 20.8% in terms of revenue and 22.2% in terms of volume during 2017 – 2025.
Figure 1. Global Biodegradable Packaging Market, By End-Use Industry
Source: Coherent Market Insights Analysis (2017)
Food segment is the largest end-use industry in the biodegradable packaging market
Among end-use industry, food segment is expected to hold dominant position in the global biodegradable packaging market, followed by beverages segment over the forecast period. Moreover, over the following decade, the segment is also expected to witness fastest growth. Rapid increase in non-biodegradable food packaging waste leading to adverse environmental concerns have led to the development of polymers that are made from renewable resources for food packaging. Natural polymers used for the development of biodegradable polymer materials are derived from agricultural products such as starch, proteins, cellulose, and plant oils. Starch and polylactic acid (PLA) are two of the biopolymers that are targeted to be used in the food and beverages end-use industry for packaging material. Biodegradable and sustainable forms of packaging are being introduced by vendors to cater to the rising demand for eco-friendly packaging products. The Coca Cola Company launched its Plant Bottle, which is partially made from bio-based plastics, while Danone is using PLA for its yoghurt cups. Also, UK-based Innovia Films is using wood pulp for the formation of cellulose-based film, which is similar to plastics.
Europe, followed by North America, and Asia-pacific, respectively accounted for major share in the global biodegradable packaging market both in terms of revenue and volume in 2016 and the trend is estimated to remain the same over the forecast period. In 2016, Europe held a market share of 50.0% in terms of value in the global biodegradable packaging market. The large amount of plastic carrier bags are made from naphtha, which is a by-product of oil refining, which in turn is leading to the various environment problems. Owing to this, the government in Europe has imposed strict regulations to use biodegradable packaging materials for the manufacture of plastic and paper bags. This in turn has allowed the retailors of various countries in Europe to charge for a plastic bag, hence led to the decrease on the use of plastic bags from the consumers. Due to this, the manufacturers in Europe has started the huge manufacturing of biodegradable plastic and paper bags. According to EPA, the various initiatives taken by European government on the use of plastic bags are:-
This in turn has is making Europe for the largest market of biodegradable packaging over the following years. Moreover, North America is estimated to be the second largest market for global biodegradable packaging 2016. This is due to the government regulations being imposed on banning plastic bags. Owing to this, the Government of California has passed a bill to ban single use plastic bags from 2016, and over 100 counties or municipalities have plastic bag bans or charges.
Major players in the global Biodegradable Packaging market include BASF SE, Smurfit Kappa Group, Mondi Group, Rocktenn, Stora Enso, Clearwater Paper Corporation, Amcor, Novamont S.P.A., Rocktenn, Kruger Inc., Smurfit Kappa Group, Reynolds Group Holding Limited, and International Corp.
As the name suggests, biodegradable packaging involves use of bio-based materials for packaging. These materials are mainly derived from renewable sources and are mostly bio-based polymers that are categorized into three types based on their source and production. The first category of polymers are directly extracted from biomass such as starch and cellulose. The second category comprises polymers that are produced by classical chemical synthesis using renewable bio-based monomers such as polylactic acid (PLA) and other polyesters. The third category comprises polymers that are produced by microorganisms and genetically modified bacteria such as polyhydroxyalkanoates (PHA), bacterial cellulose and others. Biodegradable packaging plays a vital role in the packaging industry due to its ever increasing consumer awareness and importance of using eco-friendly products. Also, biodegradable packaging degrades easily and quickly and also does not require the help of an external catalyst for degradation. Starch and polylactic acid (PLA) are the most widely used biodegradable plastic materials for packaging in various end-use industry. Food and beverages end-use industry is the largest consumer of these materials and the trend is expected to largely remain the same through 2025.
There are lot of environmental problems on the use of conventional packaging materials. The use of conventional packaging materials contributes towards global warming, air pollution, water pollution, and are also responsible for various health issues when used for food and beverage packaging. Owing to this, the regions such as North America, Europe are banning the use of conventional plastics for their use in food, beverages, and medical packaging. There are lot of government regulations being legislated in the various countries of Europe to ban use of conventional plastic materials. Moreover, in India, the state government of Delhi is increasingly pushing for a complete ban on the production and use of non-biodegradable plastic bags nationwide.
According to the stats provided by Coherent Market Insights, in 2016, the food end-use industry segment was the largest segment in global biodegradable packaging market, followed by beverages end-use industry in 2016 and the trend is expected to continue in the following years. Starch and polylactic acid (PLA) are the major biodegradable product types used in the food packaging. The rapid increase in non-biodegradable food packaging waste has caused adverse environmental concerns. This has led to the development of polymers made from renewable resources for food packaging. The key manufacturers are now introducing biodegradable and sustainable forms of packaging to cater to the growing demand for eco-friendly packaging products. The Coca Cola Company launched its Plant Bottle, which is partially made from bio-based plastics, while Danone is using PLA for its yoghurt cups.
Europe dominated the global biodegradable packaging market in 2016 and the trend is expected to remain the same during 2017-2025. This is due to the various factors such as increasing environmental awareness among consumers, strict implementation of environment friendly laws and growing R&D activities in developing bioplastics by key manufactures. The European Union has passed a strict resolution to reduce overall consumption of thin plastic bags in the region by around 80% by 2019, which in turn is expected to create major growth opportunities for biodegradable plastics & paper manufacturers over the following years. However, the reduction in the usage of conventional plastic bags is expected to directly boost the consumption of biodegradable plastic bags in malls, retail outlets and loose packaging applications. North America is the second-most dominant region in the global biodegradable packaging market and the market in the region is expected to experience a CAGR of 23.0% in terms of volume, during the forecast period. The increased cost-competitiveness of biodegradable polymers, growing support from authorities for addressing solid waste disposal needs, and increasing public awareness on the environmental issues related to conventional packaging waste are the major factors for making North America as the second largest region in the global biodegradable packaging market.
This report segments the global biodegradable packaging market on the basis of product types and application. On the basis of product types, the market is segmented as plastic (starch, cellulose, polyhydroxyalkanoates (PHA), polylactic acid (PLA), and others) and paper (Kraft, flexible, corrugated, and box board). On the basis of end-use industry, the global biodegradable packaging market is segmented into food, beverages, pharmaceutical, personal/homecare, and others. Moreover, plastic packaging is the largest product segment, accounting for over 75.0% share of the global biodegradable packaging market in 2016, while, paper packaging is projected to be the fastest growing product segment and expected to grow at a CAGR of 23.0% in terms of volume during the forecasted period.
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“*” marked represents similar segmentation in other categories in the respective section.
Note- We will profile top 10 companies’ profiles. Also, we will provide the exhaustive list of domestic players for every region.
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