Biodegradable Packaging Material Market

Global Biodegradable Packaging Materials Market Outlook

The global biodegradable packaging materials market is estimated at USD 88 Billion in 2022 and is forecast to surpass USD 169 Billion by 2032, growing at a CAGR of 6.8% from 2022 to 2032.

Attributes	Details
Base Year Value (2021A)	USD 84 Billion
Estimated Year Value (2022E)	USD 88 Billion
Projected Year Value (2032F)	USD 169 Billion
Forecast CAGR (2022-2032)	6.8%
North America Market Share in 2021	~25%
Collective Value Share (US, UK, Germany) 2022: Top 3 Countries	~31%
Key Companies Profiled	Amcor plc Smurfit Kappa Sealed Air International Paper Mondi Group PLC WestRock Company Tetra Pak International S.A DS Smith Kruger Inc. Toray Plastics (America), Inc.

The global biodegradable packaging materials market accounts for ~9% of global packaging market in 2022 and is expected to expand due to augmented consumer spending on sustainable biodegradable packaging materials because of enhanced environment-consciousness. The global biodegradable packaging materials market is projected to have an absolute $ opportunity of USD 81 Billion during the assessment period of 2022-2032.

2017-2021 Global Biodegradable packaging materials Market Outlook in Comparison to 2022-2032 Growth Forecast

The market demand for biodegradable packaging materials is witnessing an upsurge by 1.3X and the growth is mainly attributed to factors like the global war against harmful packaging materials made up of plastic and other harmful components and augmented demand for sustainable packaging in multiple industries of food & beverages, pharmaceuticals etc.

Enhanced focus on sustainability, less damaging impact on the environment, augmented consumer awareness coupled with government’s ban on plastic and emphasis on efficient packaging solutions is likely to trigger market growth by 1.7X during the forecast years of 2022-2032.

Biodegradable packaging materials market manufacturers are adopting marketing strategies that deliver a pro-environment message to their customers, which is poised to help them gain a larger market share. For instance, Coca-Cola and PepsiCo in 2021 announced to adopt 100% biodegradable, recyclable and compostable materials in packaging by the end of 2025. Coca-Cola in 2021 launched bottled made up of 100% recycled plastic and even pledged to integrate 50% recycled materials across its worldwide packaging by the end of 2030.

Unilever in 2020, announced to reduce its usage of virgin plastic packaging by more than 100,000 tonnes and augment the use of recycled plastic and go for complete biodegradable packaging materials by 2025.

Fact.MR projects the market to witness exhibiting growth at 6.8% CAGR between 2022 and 2032 in comparison to a CAGR of 3.3% posted between 2017 and 2021.

Consumer Pressure and “Attenborough Effect”

Millennials are becoming increasingly aware of the negative environmental footprints of plastic usage and are thus, leaning towards environmental conscious packaging materials. They value sustainability and are even ready to pay a higher price for it.

Attenborough effect is contributing to market growth. The term is named after David Attenborough, who educates people about plastic usage issues and sustainability. According to Global Web Index, more than 52% of consumers in the U.S and U.K have reduced single-use plastics and 42% considers sustainable packaging while making a purchase, due to the Attenborough effect. All these factors are likely to increase sales of biodegradable packaging materials market by 1.2X.

Investment in Cutting-Edge Manufacturing Technologies

Manufacturers are investing in state-of-the-art technologies to cater to ever increasing demand for affordable and highly-efficient biodegradable packaging materials. In addition to this, next-generation technological solutions are aiding producers to provide industry-specific packaging solutions.

Moreover, the global war against plastic is creating lucrative opportunities for manufacturers to enter the biodegradable packaging materials market and entice customers with their offerings.

Producers are investing in extrusion coating and resin reclamation technology to boost flexibility and speed of manufacturing processes and provide the right packaging solutions, which is likely to contribute to approximately 3/4th of market revenue during the forecast period of 2022-2032.

Stringent Regulations Driving Biodegradable Packaging Material Market

According to World Bank, plastic waste generation is projected to increase by roughly 70% and by 2050, it is likely to reach more than 3.3 billion tonnes.

The perils of plastic waste generation have forced governments and institutes to impose a ban on single-use plastic packaging materials. Several regulations and legislations primarily focused on plastic packaging and single-use plastic have been introduced in over 60 countries, regions and cities. Certification procedures and labelling regulations are in place to control false claims about sustainable packaging.

United States comprises only 4% of the world’s population but produces more than 105 Kg of plastic per person per year. The Break Free from Plastic Pollution Act in the U.S. forces producers to ban single-use plastic products, handle waste, and pause permits of new plastic plants, in addition to other measures, imposed.

The National Action Plan for Sustainable Plastic Management introduced set 3 targets of plastic concern. First, is to recycle 50% of plastics by end of 2025, second, to phase out single-use plastic by 90% by end of 2026 and thirdly, to reduce plastic waste generation by 30% by 2030.

Manufacturers need to comply with stringent government regulations established in regional markets and make a shift towards eco-friendly packaging solutions which is expected to boost the market growth.

Factors Hindering Market Growth

No doubt, the ban on plastics has inclined consumers towards the adoption of biodegradable packaging alternatives but high recycling and manufacturing costs of biodegradable packaging materials are poised to hinder the market growth. Market players in end-use industries are facing huge challenges due to the unavailability of cost-effective biodegradable packaging materials.

Region-wise Insights

Which is the dominant region for the Biodegradable Packaging Materials market?

North America biodegradable packaging materials market is dominant in overall sales of the product. It contributes more than 24.9% to the overall market share and is poised to grow at the same pace. Manufacturing companies in North America are commercializing the production of biodegradable packaging wherein, production units have been shifted to Asian countries because of low operating costs. Additionally, this region has recognized biodegradable standards in place like the American Society for Testing and Materials (ATM) standards in the US etc., supporting biodegradable packaging materials market growth.

In North America, the United States is the dominant country contributing approximately 18.9% to the overall market. U.S. Food Packaging Regulations laid down by the U.S. Food and Drug Administration (FDA), regulating materials like plastics, papers etc. to ensure they are safer to use along with rising consumer consciousness towards eco-friendly packaging is anticipated to drive the biodegradable packaging materials market.

Favorable regulations from the government along with rising consumer consciousness towards eco-friendly packaging is anticipated to drive the biodegradable packaging materials market.

What is the market scenario in the Asia-Pacific?

East Asia and South Asia biodegradable packaging materials markets are contributing nearly 19.3% and 17.2% to the overall market share, respectively and are likely to witness an upper single-digit growth rate during the assessment period of 2022-2032.

The emergence of new companies in the Asian countries of Thailand and China is leading to the creation of a production hub in the region. Additionally, several e-commerce giants in online goods and food delivery are showing interest to switch to biodegradable packaging materials. In China alone, if online food delivery and online sectors switch to biodegradables, it is bound to place additional demand of 700,000 tonnes of biodegradable packaging materials.

Global mismanaged plastic waste is dominated by East Asia and the Pacific region, accounting for more than 3/5th of the world mismanaged plastic waste. This is poised to place 1.9x demand on table from Asia-Pacific biodegradable packaging materials market solutions.

Category-wise Insights

Which material type of Biodegradable Packaging Materials is projected to show maximum growth?

Biodegradable packaging materials are available in several material types such as paper and paperboards, plastic, jute, and wood under which paper and paperboards biodegradable packaging materials is likely to retain the dominant position in the global market. It accounts for nearly 62.3% of the global market share and is likely to contribute to ~85% of total market revenue during assessment years.

Which end-use industry is driving demand for the Biodegradable Packaging Materials Market?

Sales of biodegradable packaging materials are likely to be driven by the food and beverage industry amongst all other end-use industries. The food & Beverage industry accounts for more than 34% of the overall market share. Numerous factors such as enhanced demand for ready-to-eat meals, convenience food, packaged food products are expected to boost market demand by 1.3x.

Competitive Landscape: Top Companies of Biodegradable Packaging Materials Market

The global biodegradable packaging materials market is highly fragmented and competitive owing to the existence of many domestic and regional players. Various marketing strategies are adopted by key players such as mergers and acquisitions, expansions, collaborations and partnerships.

Also, new product development as a strategic approach is adopted by the leading companies to upscale their market presence among consumers. These strategies have resulted in the incorporation of eye-catching biodegradable packaging materials comprising of better functionalities and variants.

Fact.MR has provided detailed information about price points of top manufacturers of biodegradable packaging materials positioned across regions, sales growth, production capacity, and speculative technological expansion in the recently published report.

For instance:

• Smurfit Kappa in 2021 launched a new range of eBottle packaging solutions for the growing online beverage market. This range is more sustainable made from recyclable raw material and is customizable according to bottle shapes and sizes. The company also offers a range of automated solutions that helps in the optimization of packaging processes.
• Amcor Limited in 2021, announced that its team has created more sustainable packaging solutions for butter and margarine, which is made entirely from paper. The paper wrapper is 38% lighter than aluminium and paper packaging and reduces carbon footprint by 81%, thus, helping consumers meet sustainability goals.

Global Biodegradable packaging materials Market by Category

• By Material Type :

  • Paper and Paperboards Biodegradable Packaging Materials
    • Coated Unbleached Kraft Paperboard
    • Bleached Paperboard
    • Molded Fiber Pulp Paperboard
    • Recycled Paper Paperboard
  • Plastic Biodegradable Packaging Materials
    • Poly Lactic Acid (PLA)
    • Polyhydroxybutyrate (PHB)
    • Starch Based Plastic
    • Fossil Based Polymer (PCL, PBAT, PBS etc.)
    • Polyhydroxyalkanoates (PHA)
  • Jute Biodegradable Packaging Materials
  • Wood Biodegradable Packaging Materials

• By Application :

  • Trays
  • Bags
  • Boxes
  • Clamshells
  • Films
  • Pouches

• By End-Use Industries :

  • Food & Beverage Industry
  • Cosmetics and Personal Care Products Industry
  • Pharmaceuticals Industry
  • Consumer Goods Industry

• By Region :

  • North America
  • Latin America
  • Europe
  • East Asia
  • South Asia
  • Oceania
  • MEA