The anticipated value of the global compostable plastic packaging material market in 2023 is estimated to be US$ 1.89 billion. Enhanced composting infrastructure contributes significantly to expanding the potential of this market, with a projected compound annual growth rate (CAGR) of 5.2% from 2023 to 2033. By 2033, it is expected to reach approximately US$ 3.1 billion, reflecting a substantial evolution in sustainable packaging solutions. This growth trajectory underscores the increasing emphasis on eco-friendly alternatives and the role of compostable plastics in mitigating environmental concerns associated with traditional packaging materials.
Compostable plastic packaging materials stand out as a greener alternative to traditional plastics due to their capacity to decompose into natural components during composting processes. These materials are commonly sourced from renewable materials like corn starch, sugarcane, or cellulose, contributing to a decrease in dependence on fossil fuels and non-renewable resources.
It is a known fact that plastic is the packaging materials’ foundation. However, as synthetic polymers are not capable of decomposing on natural count, they have been deteriorating the environment since the last few years. As such, compostable plastic packaging material is looked upon as a good alternative to plastic. The properties are analogous to conventional plastic – like shelf stability, durability, barrier properties, and likewise.
The United States is emerging as a promising market for compostable packaging material due to the increasing demand for sustainable solutions. Recent analysis by FMI projects that the U.S. will account for approximately 86% of total sales in North America until 2033. This growth is largely attributed to the escalating awareness of sustainability, which is gaining momentum among both consumers and businesses. The country is expected to maintain a robust compound annual growth rate (CAGR) of 5.1% over the analysis period.
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With growing awareness regarding environmental hazards related to plastics, the consumers are preferring eco-friendly packaging solutions. This is one of the major factors accelerating the compostable plastic packaging material market and the scenario is expected to remain the same even in the forecast period.
Cafeterias preferring to go green are into adoption of bio-based plastic. The catering services, quick service restaurants are increasingly adopting compostable plastic packaging material. This is actually response to the alarming figures released by the UN; i.e. by the year 2040, plastic would add 23-37 Million metric tons of waste into ocean every single year if left unchecked.
Future Market Insights has entailed these facts with insights in its latest market study entitled ‘Compostable Plastic Packaging Material market’. It has its team of analysts and consultants doing the rounds through macros and micros.
“With food chains witnessing an exorbitant rise in home deliveries, the global compostable plastic packaging material market is bound to grow on a good note in the forecast period”, says an analyst from Future Market Insights.
Business Growth Drivers:
- Environmental Concerns: Increasing awareness about the harmful effects of traditional plastic packaging on the environment has led to a surge in demand for compostable alternatives. Consumers and businesses are actively seeking eco-friendly packaging solutions to reduce their carbon footprint.
- Regulatory Support: Governments worldwide are implementing stringent regulations to curb plastic pollution and promote sustainable packaging practices. Supportive policies, such as bans on single-use plastics and incentives for compostable packaging, are driving market growth.
- Consumer Preferences: With growing eco-consciousness, consumers are actively choosing products packaged in compostable materials over conventional plastic packaging. This shift in consumer preferences is propelling the demand for compostable plastic packaging materials.
- Corporate Sustainability Initiatives: Many companies are adopting sustainability goals and integrating environmentally friendly practices into their operations. Switching to compostable packaging materials aligns with these initiatives, driving market growth through increased corporate adoption.
- Technological Advancements: Ongoing research and development efforts are enhancing the functionality and cost-effectiveness of compostable plastic packaging materials. Innovations in material science and manufacturing processes are expanding the market’s product offerings and improving performance.
- Market Expansion Opportunities: As the awareness of compostable packaging grows, new market segments and geographical regions are opening up for manufacturers and suppliers. This expansion provides ample opportunities for market players to diversify their offerings and capture additional market share.
Industry Restraints:
- Cost Concerns: Compostable plastic packaging materials are often more expensive to produce than conventional plastics, primarily due to higher material costs and manufacturing complexities. This cost barrier can limit widespread adoption, especially among price-sensitive industries and consumers.
- Limited Infrastructure: The availability of composting infrastructure varies significantly across regions. Inadequate facilities for composting can hinder the proper disposal and composting of packaging materials, reducing their effectiveness and limiting market growth.
- Performance Challenges: Some compostable materials may not offer the same level of durability, barrier properties, or shelf life as traditional plastics. Meeting performance requirements while maintaining compostability poses a challenge for manufacturers, particularly in applications requiring high functionality.
- Supply Chain Complexity: The sourcing and supply chain logistics for compostable materials can be more complex than those for traditional plastics. Issues such as material availability, consistency, and scalability may arise, impacting the reliability and cost-effectiveness of supply chains.
- Consumer Education: Despite increasing awareness, many consumers still lack a clear understanding of compostable packaging materials’ benefits and proper disposal methods. Education efforts are necessary to overcome misconceptions and promote widespread acceptance and adoption of compostable packaging.
- Competitive Landscape: The compostable packaging market is becoming increasingly competitive, with numerous players entering the fray. Intense competition can lead to pricing pressures and commoditization, challenging the profitability of market participants.
Key Takeaways from Compostable Plastic Packaging Material Market
- North America holds the largest market share with the US being subject to rising awareness regarding sustainability.
- The Asia-Pacific is expected to grow at the fastest rate in the compostable plastic packaging material market. This could be attributed to countries like India ruling the roost. Expansion of FMCG sector coupled with consumers shifting toward e-Commerce is expected to keep the cash registers ringing in the forecast period.
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Competitive Material
- Cardia Bioplastics, in September 2019, did launch a certified home compostable biopolymer resin.
- Danimer Scientific LLC, in August 2021, completed acquisition of Novomer, Inc. (a developer of conversion technology). It makes provision for low net carbon inputs into manufacturing PHA-based resins.
- BASF SE, in September 2021, entered into collaboration with WPO Polymers for distributing biopolymer ecovio for the certified compostable bags.
- The year 2021 saw Amcor Ltd. announcing that its team had gone ahead with creating sustainable packaging solutions for margarine and butter comprising paper. This paper wrapper comes across as being 38% lighter as compared to paper and aluminum packaging and does lessen carbon footprint by ~80%.
- Smurfit Kappa, in the year 2021, did come up with eBottle packaging solutions to expand beverages market online. The range is found to be all the more sustainable. It constitutes recyclable raw material and could be customized as per bottle sizes and shapes.
The Key Players Are:
- BASF SE
- Kaneka Corporation
- FKuR Kunststoff GmbH
- Cardia Bioplastics
- Novamont S.p.A.
- Danimer Scientific LLC
- Grabio Greentech Corporation
- Northern Technologies International Corporation
- NatureWorks LLC
- S.K. Chemicals Co., Ltd.
- Minima Technology Co. Ltd.
- Biotec Pvt. Ltd.,
- Green Dot Holdings LLC
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Key Segmentations-
By Material:
- PBAT
- PBS
- PLA
- PHA
- Starch Blends
- Others
By Application:
- Bags
- Pouches
- Boxes
- Bottles
- Cups
- Trays
- Plates & Bowls
- Others
By End User Industry:
- Food Service
- Food & Beverage
- Cosmetics & Personal Care
- Homecare
- Healthcare
- Others
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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