June 16, 2024

Biodegradable Packaging Market is Projected to Propelled by increasing environmental concerns

Biodegradable packaging includes materials that decompose and break down into carbon dioxide, water, and biomass when exposed to oxygen and microorganisms naturally over time under anaerobic conditions. It is majorly used for packaging food and beverages to develop eco-friendly packaging solutions. Biodegradable packaging products include pouches & bags, boxes, containers, wrappers, and bottle & jars. They are derived from renewable plant sources like corn starch, leaves, and wood. Biodegradable packaging reduces plastic waste and provides protection and shelf-life extension for products.

The global biodegradable packaging market is estimated to be valued at US$ 23.8 billion in 2023 and is expected to exhibit a CAGR of 20% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.

Market Dynamics:

Increasing concern for plastic waste management: As highlighted in the heading, the increasing amount of non-biodegradable plastic waste has become a major environmental concern globally. Biodegradable packaging decomposes and prevents plastic from accumulating in landfills or oceans. This is expected to drive the demand for biodegradable packaging solutions during the forecast period.

Government support for sustainable packaging: Many governments worldwide have introduced regulations to minimize the use of single-use plastics and promote biodegradable and compostable alternatives. For instance, the European Union has banned certain single-use plastic products from July 2021. This supportive regulatory environment is fueling the growth of the biodegradable packaging industry.

Segment Analysis

The biodegradable packaging market is dominated by flexible packaging sub segment. Flexible packaging accounts for over 45% of the market share as they are lightweight and require less material to package products. Their ability to conform to product size and shape allows maximum utilization of space during transportation and storage. Hence, they are highly preferred by food and beverage manufacturers.

PEST Analysis

  • Political: Governments across the world are promoting use of biodegradable and eco-friendly materials for packaging to reduce plastic waste. Strict regulations on use of conventional plastics are driving adoption of biodegradable packaging.
  • Economic: Lower prices of biodegradable materials compared to petroleum-based plastics along with growing disposable incomes are fueling market growth. However, high initial investment for packaging machinery is a challenge.
  • Social: Rising awareness about environmental protection and disadvantages of plastic waste is compelling leading brands to use sustainable alternatives. Customers are willing to pay more for green packaged products.
  • Technological: Advances in material sciences are facilitating development of novel biodegradable polymers with properties matching conventional plastics. Automation is optimizing production process.

Key Takeaways

The global biodegradable packaging market is expected to witness high growth. The global biodegradable packaging market is estimated to be valued at US$ 23.8 billion in 2023 and is expected to exhibit a CAGR of 20% over the forecast period 2023 to 2030.

Regional analysis comprises- Asia Pacific dominates the market currently due to rapid industrialization and growing food processing industry in countries like India and China. The APAC biodegradable packaging market is projected to rise at over 22% through 2030.

Key players operating in the biodegradable packaging market are Amcor, DS Smith, International Paper, Mondi, Tetra Pak. These players are focusing on new product launches, expansion into emerging markets and partnerships with end-use industries to strengthen their market presence.