Expected to reach a valuation of US$ 18.9 billion in 2023, the global compostable foodservice packaging market is poised for substantial growth, with total sales projected to experience a robust Compound Annual Growth Rate (CAGR) of 4.5% from 2023 to 2033. This trajectory is anticipated to culminate in an impressive valuation of US$ 29.3 billion by the end of 2033.
A product labeled as “compostable” signifies its ability to break down into carbon dioxide, water, inorganic compounds, and biomass at a pace comparable to paper, undergoing a disintegration of at least 90% of its original mass within 180 days, and leaving behind no harmful residues. Typically, these products receive certification from reputable third-party systems, such as the Biodegradable Products Institute (BPI).
Within the realm of compostable foodservice packaging, various solutions encompass single-use plates, trays, cups, bowls, bags, wraps, cutlery, and more. These items are designed to be composted and are widely utilized by restaurants and other establishments providing prepared foods and beverages, contributing to sustainable and eco-friendly practices in the food industry.
The surging adoption of compostable foodservice packaging in Germany is fueled by a confluence of factors. A growing demand for environmentally friendly and sustainable packaging solutions, both from businesses and consumers, is steering the momentum toward compostable options. Furthermore, Germany, mirroring several European nations, has enforced stringent regulations to curb plastic usage. The European government’s ban on single-use plastic products in 2021 has been a significant catalyst, propelling substantial growth in the compostable foodservice packaging industry within Germany. Consequently, businesses such as restaurants and cafes are swiftly embracing compostable packaging to align with government mandates and cater to environmentally conscious consumers, ensuring sustained expansion in this market throughout the next decade.
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In the United States, compostable foodservice packaging has found a dominant market. Consumer preference for sustainable packaging is a significant driver, and the country’s expanding foodservice sector, which supplied food worth US$ 2.12 trillion in 2021, plays a pivotal role. This rapid growth in the food and foodservice industry provides ample opportunities for compostable foodservice packaging sales. Moreover, strict regulations aimed at reducing plastic usage in the USA further contribute to the promising prospects for compostable foodservice packaging manufacturers in the coming years. As a result, the USA is expected to account for around 20.2% of the global compostable foodservice packaging industry by 2033.
Similarly, rising awareness levels, growing need for achieving the sustainability goal among the brands, and implementation of stringent government regulations on the usage of single-use plastic products are expected to push the demand for compostable foodservice packaging.
Rising industry standards and the introduction of technology solutions into the paper market are creating future growth prospects for the compostable foodservice packaging market.
Initially, waste was generated by paper producers due to a lack of adequate paper making machinery. Owing to technological advancements, waste created may now be repurposed as a raw material for creating paper or other products, which was previously not feasible due to a lack of required technologies.
Wastage during the papermaking process has been cut in half as a result of the development of cutting-edge paper production technology, and paper producers’ efficiency has grown. In addition, technologically improved papermaking equipment give paper manufacturers increased production capacities.
Bagasse is expected to act as a revolutionary element in the compostable packaging market due to its strong, lightweight, affordable, and eco-friendly features. Bagasse is a dry, pulpy, fibrous by-product of crushed sugarcane. It is extensively utilized in the production of food packaging and service elements. It is completely biodegradable and has no harmful effects on the environment.
Bagasse packaging solutions can handle both hot and cold foods. Government restrictions on single-use plastics could make way for eco-friendly packaging solutions such as bagasse tableware. This in turn will boost the global compostable foodservice packaging industry.
Key Takeaways from Compostable Foodservice Packaging Market
- By material type, paper & paperboard segment is expected to expand at 5.5% CAGR during the forecast period.
- The molded fiber sub-segment of paper & paperboard category is projected to register a CAGR of 6.9% between 2023 to 2033 due to its 100% biodegradable and compostable feature.
- Based on product type, cups and trays segments collectively are estimated to account for around 48% of the market value share by the end of 2033.
- By end use, delivery catering segment is anticipated to expand at 1.6 times the current market value during the forecast period.
- Western Europe holds a significant portion of the global compostable foodservice packaging industry owing to the presence of strict recycling laws.
- The USA compostable foodservice packaging market is forecast to create a growth opportunity of US$ 582.7 million during the assessment period.
- Demand for compostable foodservice packaging across Germany is poised to increase at 3.1% CAGR throughout the forecast period.
“A gradual shift from plastic foodservice packaging to greener material-based paper foodservice packaging has been witnessed in the past year. Biodegradable materials such as wood, corn starch, etc. offer sustainability added with proper packaging. Therefore, they have become ideal for making foodservice packaging,” says an FMI analyst.
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Penetration of Online Food Delivery Platforms Facilitating Compostable Foodservice Packaging Sales
The foodservice industry is experiencing robust growth, coupled with the increasing prevalence of e-commerce, leading to a shift in distribution channels toward online food ordering and delivery. This trend caters to a broader customer base by providing the convenience of home delivery, eliminating customer effort. Simultaneously, the rise of food delivery companies has expanded beyond meals to include rapid delivery of groceries and stationery, meeting diverse consumer needs within minutes. This evolution reflects a dynamic landscape where technological advancements and changing consumer preferences are reshaping the way goods, including food and essential items, reach consumers efficiently.
Rapid Expansion of Foodservice Industry to Boosting Compostable Foodservice Packaging Market
One of the most thriving and dynamic industries in the world is the foodservice industry. The sector has already unmatched growth, and it continues to generate revenue and create potential jobs. The development of the food production sector and the popularity of portable meals has improved the foodservice packaging sector.
The market for foodservice packaging is being further stimulated by the changing demographics and the increased internet usage among Generation Z. As more young people consume healthy, high-quality food that is packaged in hygienic ways, adoption of packaging solutions such as compostable cups, bowls, trays, etc. is increasing rapidly across foodservice industry.
Who is Winning?
Key players operating in the compostable foodservice packaging market include
- Huhtamaki Oyj,
- Stora Enso Oyj,
- Georgia-Pacific LLC,
- WestRock Company,
- Mondi Group,
- Berry Global Group,
- Smurfit Kappa Group plc,
- Pactiv LLC,
- Genpak, LLC.
Also, the other noticeable players in the market include
- SEOIL Corporation,
- Karat Packaging Inc.,
- Kruger Inc.,
- Vegware Ltd.,
- Biopac (U.K.) Ltd. (Duni),
- Ultra Green Packaging Inc.,
- Eco-Products, Inc.,
- Sabert Corporation,
- Fabri Kal
- others.
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Compostable Foodservice Packaging Industry by Category
By Packaging Type:
- Plates
- Trays
- Bowls
- Cups
- Clamshell
- Cutlery
- Pouches & Sachets
- Others (Wraps, Straws, Cup Carriers, etc.)
By Material Type:
- Plastic
- PLA
- PHA
- PBS
- PBAT
- Starch Blends
- Other Plastics
- Paper & Paperboard
- Coated Unbleached
- Molded Fiber
- Other Grades
- Bagasse & Seaweed
By End Use:
- Chain Restaurants
- Non-Chain Restaurants
- Chain Café
- Non-Chain Café
- Delivery Catering
- Independent Sellers/ Kiosks
- Others (FMCG, Hotels, Retailers)
About Future Market Insights (FMI)
Future Market Insights, Inc. (ESOMAR certified, recipient of the Stevie Award, and a member of the Greater New York Chamber of Commerce) offers profound insights into the driving factors that are boosting demand in the market. FMI stands as the leading global provider of market intelligence, advisory services, consulting, and events for the Packaging, Food and Beverage, Consumer, Technology, Healthcare, Industrial, and Chemicals markets. With a vast team of over 5000 analysts worldwide, FMI provides global, regional, and local expertise on diverse domains and industry trends across more than 110 countries.
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