The rapidly growing trend for sustainable packaging is the major factor augmenting the sales of biodegradable packaging | Future Market Insights Inc.
According to the FMI analysis, the biodegradable packaging market reached over US$ 440 Bn in 2021. The global biodegradable packaging market is anticipated to register a CAGR of 6.1% during 2022-2032. The demand for the biodegradable paper packaging segment by the material is estimated to boost with the top 5 key players holding 20-25% of the global biodegradable packaging market by the end of 2022.
The biodegradable packaging market is projected to bolster with the increasing demand for sustainable and eco-friendly packaging in various end use industries. A new forecast by FMI analysis estimates that biodegradable packaging sales will augment during 2022-2032 and is anticipated to create a growth opportunity of US$ 1.8 Bn.
The government and non-government initiative towards sustainable packaging in North America and Europe is projected to create a growth opportunity for the biodegradable packaging market during the forecast period.
Fast-Moving Consumer Goods (FMCG) Producers And Retailers are rapidly expanding beyond conventional light weighting efforts.
Historically, FMCG companies and retailers have prioritised immediate gains, such as reducing weight and materials utilisation, to cut their packaging costs. As a result of these shifts, flexible packaging and pouches have largely replaced more rigid packaging designs.
However, in recent years, producers and sellers of packaged goods have pledged to reduce packaging waste. Almost all the top 100 fast-moving consumer goods businesses have made public pledges to increase their sustainability efforts in the future years.
Concurrently, significant industry trends influencing the packaging solution sector, such as cost pressures, e-commerce and digitalization, and altering consumer tastes, are combining with sustainability-focused programmes centred on innovation and the need for change in the use of packaging.
FMCG producers and sellers are dabbling with radical new approaches to packaging solution and distribution. They are trying out several returnable methods that use metal and glass to reduce plastic waste. Major brands are, in effect, beginning to self-regulate.
FMCG firms and retailers are venturing into the new ground as they face the new difficulties in waste management and recyclables. Organizations like these have traditionally prioritised a narrow package sustainability agenda, with a heavy emphasis on “light weighting”. Now, fast-moving consumer goods (FMCG) manufacturers and retailers are working to meet these new difficulties through tighter cooperation with upstream stakeholders, bio packaging companies, and recyclers.
As fast-moving consumer goods (FMCG) companies and retailers realise the need to shift from an arm’s length relationship with suppliers to more of a partnership and collaborative approach, new opportunities are expected to emerge for bio packaging manufacturers, especially for agile converters that can quickly expand their innovation capabilities.
Legislation and current trends have accelerated the transition away from plastic packaging solution for perishable goods. Customers are more likely to purchase goods that are packaged with sustainable, 100% recyclable materials like paper, starch, and glue.
Some of the measures key players are focusing on to ensure ethical production and internal operations are as follows:
- Using wind power in production.
- Making smart decisions about shipping packaging solution to reduce carbon footprints.
- Finding methods to cut back on or do away with material consumption.
- Consolidating goods into fewer trips helps us save money and reduce emissions.
- Conserving resources and boost productivity in the workplace.
- Using previously used packaging materials for outgoing shipments if they are still in acceptable condition.
- Historic Market Outlook for Biodegradable Packaging
The global biodegradable packaging market witnessed a CAGR of 5.3% during the historic period with a market value of US$ 448.2 Bn in 2021.
The rapidly growing trend for sustainable packaging is the major factor augmenting the sales of biodegradable packaging. Biodegradable packaging offers various packaging solutions made from paper & paper board, bio-plastic, and bagasse which do not harm the environment or surroundings when disposed of. The government regulation over the usage of single-use plastic products creates a growth opportunity for the biodegradable packaging market. Slowly, consumers are getting conscious of the increasing packaging waste in landfill which is creating demand for biodegradable packaging.
Also, the brand owners have shifted their preference towards eco-friendly packaging to meet the consumer demand and to attain sustainability goals which drive the demand for biodegradable packaging. Overall, the future outlook for the biodegradable packaging market is projected to rise at a faster pace during the forecast period.
Bagasse Packaging Creating a Growth Opportunity for the Biodegradable Packaging Market
Bagasse is a dry, pulpy, fibrous remnant of crushed sugar-cane or sorghum. It is commonly used in the manufacturing of food packaging and serving elements. Bagasse is 100% biodegradable and has no negative effects on the environment. Uncoated bagasse can easily be composted at home, and it degrades within sixty days. Ongoing research on bagasse concludes that the material can withstand hot and cold food, and can also be microwaved and frozen. Government regulations for single-use plastics could greatly fuel the bagasse packaging trend which directly impacts the market growth of biodegradable packaging.
The growing demand for sustainable and disposable packaging after the arrival of the pandemic is expected to improve the market revenue for the biodegradable packaging market. The carbon footprint of bagasse packaging is also much less than plastic packaging. Recyclable, lightweight, and eco-friendly features are responsible for boosting bagasse in the biodegradable packaging market. Hence, bagasse is expected to act as a revolutionary element in the biodegradable packaging market.
Why is the U.S. projected to Augment the Sales of Biodegradable Packaging?
In the U.S., the rising awareness among consumers and favourable regulations from the government is anticipated to drive the demand for biodegradable packaging during the forecast period. The U.S. is projected to hold around 80% of the North American biodegradable packaging market by the end of 2032.
According to the United States Environmental Protection Agency (EPA), the United States generates almost 80 million metric tons of packaging waste each year. Recognizing this issue and under pressure from consumers, several of the companies pledged to reduce the environmental impact of their packaging. Thus, the above-mentioned factors are projected to augment the sales of biodegradable packaging in the U.S.
Germany anticipated to Drive the Demand for Biodegradable Packaging
The German biodegradable packaging market is projected to register a CAGR of 4.3% during the forecast period due to the ban on single-use plastic products. The ban on single-use plastic products in Germany lead the end use industries towards the sustainable and eco-friendly packaging solution which drives the demand for biodegradable packaging. Various governments across European countries such as Spain, Germany, the U.K., and others in July 2021 came up with legislation regarding the ban of single-use plastic products to reduce excessive use of plastic products, this creates a growth opportunity for biodegradable packaging.
The key players operating in the biodegradable packaging market are focusing on expanding their capacities and resources to meet the growing demand for sustainable packaging including biodegradable packaging by establishing the new plant. Also, the key players are adopting collaboration & joint venture strategies to increase their presence and resources. Some of the key developments are as follows:
In April 2022, Karat Packaging Inc. announced a joint venture agreement with Happiness Moon, Co. Ltd. (Happiness Moon) to build a new factory in Taiwan for manufacturing compostable food service products from bagasse.
In March 2022, Mondi made an investment of US$ 285 Million in corrugated packaging to accelerate the sustainable growth plans of the company.
In January 2022, Smurfit Kappa announced the investment of USD 33 Million in its Fortaleza plant, Brazil, to expand its capacity to meet the growing demand for innovative and sustainable packaging.
These insights are based on a report on biodegradable packaging market by Future Market Insights**