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.

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.