The sustainable packaging market is projected to grow at a CAGR of 5.03% to reach US$348.919 billion by 2026, from US$247.435 billion in 2019.
Sustainable packaging is defined as an approach towards packaging that is sourced, developed, and used in a way that minimizes the environmental impact.
Green marketing is something only forward-looking businesses emphasized several years ago when it was unusual for businesses to take environmentally friendly initiatives. The current trend toward pursuing sustainable practices is not merely nice, it is becoming the new norm. Private and public organizations working together to speed up the environmental change, in keeping with market expectations, open up vast opportunities.
Food & beverage products are increasingly being packaged with sustainable materials, resulting in further growth for the market. A major catalyst in this process is the emergence of sustainable packaging materials that reduce the impact on the environment.
Even the cosmetics packaging industry is working towards creating more environmentally friendly packaging options that can take the cosmetics market to a whole new level. The market growth is also driven by initiatives to decrease the use of non-degradable packaging materials, the growth of sustainable packaging lines, and green packaging strategies.
After the COVID-19 outbreak became a pandemic, unfortunately, the focus began shifting away from sustainability to the virus and its impact. Additionally, the pandemic has caused a rise in plastic waste. It has been reported that a great deal of personal protective equipment (PPE) is being discarded carelessly Despite efforts to ban single-use plastics, the demand for bottled water, plastic bags, disposable wipes, and sanitizers is increasing.
Environmental concerns have led to a greater interest in sustainable packaging and processing operations due to consumer awareness. As part of sustainability initiatives, manufacturers have reduced the source material by downgrading, creating thinner and lighter packaging, and reducing waste. Modern consumers increasingly consider eco-friendliness, ethics, quality, safety, and product costs when selecting products. Legislative packaging regulations also enforce a number of these issues, which will benefit the global green packaging market.
As the packaging materials can be recycled, renewed, and reused, eco-friendly biodegradable wrapping materials like paper and paper boards contribute to maintaining the sustainability of the environment. Also, there is low awareness of the importance of sustainable packaging among consumers in developing countries.
High recycling rates and set up costs have, in turn, prevented many manufacturers from implementing sustainable packaging solutions. The World Bank estimates that global solid waste generation will reach 4.7 billion tons by 2050. The solid waste generated in the coming years will be so large that recycling capacity cannot keep up with the output. A more environmentally friendly packaging solution is needed to reduce the huge amount of solid waste generated each year.
The rise of 'zero waste' shops and the sharp increase in the use of refillable water bottles are just a few examples of how consumers are contributing to the reduction of waste. A majority of the individuals believe it's time to move away from single-use packaging in favor of packaging made from recycled materials.
Increasing business responsiveness to consumers:
A change in consumer attitude toward plastic packaging and waste is starting to affect businesses, and they are making changes as a result. Sustainable practices are now a priority for businesses since they realize that losing paying customers will cost them if it is not implemented correctly.
The consumer pressure to be more environmentally responsible has resulted in businesses adopting voluntary targets and initiatives that go beyond the regulatory requirements. Many global brands, including Unilever, Nestle, and IKEA, have announced their commitment to eliminate single-use plastic waste within the next 10 years.
Corporate Social Responsibility:
Focus on corporate social responsibility means a business is committed to enhancing the environment and society, not contributing to its destruction. Walmart, one of the largest retailers in the world recognizes its influence and has taken steps towards a leadership role in sustainable packaging. It aims to have 100% recyclable, reusable and compostable packaging. When retailers like Walmart make a statement like this, other business giants take it seriously.
Lower carbon footprint, lower shipping cost:
Many brands are concerned about their carbon footprint, as this contributes to climate change and natural disasters. HP is one such brand. Since most of its products are sold in the USA and Europe, HP wanted to devise a sustainable packaging solution.
Environmental friendly packaging with a minimal impact on the environment, while also providing protection for the products during long travels from the factory to the customer. HP began using virgin fiber produced from responsibly managed forests for its fluting and liner. The fiber is extremely strong and was able to reduce packaging materials by 29%, thereby saving materials and maintaining protection. Additionally, HP benefits from the reduced box weight, which reduces shipping costs and transportation emissions.
Overcapacity could be a major hindrance for this industry. Non-biodegradable plastic bags remain the most preferred packaging material in the world due to their lower cost. Because of this, packaging companies are unable to match their production capacity with their sales volume. It is costly to use raw materials such as biobased monomers, liquid biofuels, cellulosic fibers, and biopolymers. As a result, the cost is passed on to consumers.
Impact of Covid-19 on the Sustainable Packaging Market
Increasingly, end-user industries like personal care, food & beverage, and pharmaceuticals have seen drastic revenue losses since COVID-19 became effective.
Furthermore, the lockdown triggered by Coronavirus led to a halt to the purchase of several important raw materials on the global market, which unfortunately led to problems in obtaining raw materials, attracting workers, and delivering products. With the steady increase in demand, however, the sustainable packaging market is quickly returning to normal.
A robust market is further estimated to be available due to increased production activities and demand for storage & distribution applications.