February 23, 2024

The Increasing Consumer Awareness Towards Sustainable Packaging Solutions Is Anticipated To Open Up New Avenue For Biodegradable Packaging Market

Biodegradable packaging includes packaging materials that can be decomposed by microorganisms such as bacteria, fungi, and algae. These materials include paper, paperboard, and bio-plastics such as polylactic acid (PLA), starch blends, cellulose, and wood pulp among others. Biodegradable plastics can replace conventional plastics in applications including shopping bags, food packaging films, and coffee capsules. Some key applications of biodegradable packaging include food packaging, beverage packaging, pharmaceutical packaging, and personal care/homecare packaging.

The Biodegradable Packaging Market is estimated to be valued at US$ 37,919.7 Mn or 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:
The increasing demand for sustainable packaging from regulatory bodies and consumers is a major driver for the biodegradable packaging market growth. Major retailers and brands are committed to shift towards eco-friendly packaging in response to increasing plastic waste. For instance, several supermarkets in Europe and North America have imposed plastic bag bans or taxes. Additionally, the rising concerns over greenhouse gas emissions from non-biodegradable plastics and their accumulation in landfills and oceans is fueling the replacement of conventional plastics with biodegradable materials. However, high costs of biodegradable materials compared to petroleum-based plastics and lack of infrastructure for industrial composting are some challenges restraining the market growth.

Segment Analysis
The biodegradable packaging market is segmented into plastic, paper, and others. Among these, the plastic segment accounts for the largest share in the market. This is attributed to its high compatibility with filling and sealing equipment’s. Plastics are further segmented into polylactic acid (PLA), polybutylene succinate (PBS), polyhydroxyalkanoates (PHA), and others. The PLA sub-segment dominates the plastic segment owing to its excellent material properties like strength, printability, and processability.

PEST Analysis

  • Political: Stringent regulations regarding the usage of conventional plastics are being implemented globally to curb pollution. This is boosting the demand for biodegradable packaging.
  • Economic: The rising disposable incomes are resulting in increased consumption of packaged food and beverages, driving market growth. However, high costs of biodegradable plastics hamper market penetration.
  • Social: Rising awareness about environmental protection and sustainability is compelling brands and consumers to shift toward eco-friendly products.
  • Technological: Advanced technologies are helping manufacturers produce biodegradable packaging materials using agricultural waste, reduce costs, and improve material properties.

Key Takeaways

The global biodegradable packaging market is expected to witness high growth, exhibiting CAGR of 20% over the forecast period, due to increasing environmental concerns regarding plastic waste and stringent regulations.

The Asia Pacific region dominates the market and is expected to grow at the fastest rate during the forecast period. This is attributed to the growing food and beverages industry and rapid industrialization in countries such as China and India.

Key players operating in the biodegradable packaging market are BASF SE, Smurfit Kappa Group, Mondi Group, Rocktenn, Stora Enso, Clearwater Paper Corporation, Amcor, Novamont S.P.A., Kruger Inc., Reynolds Group Holding Limited, and International Corp. These players are focusing on new product launches, capacity expansions and mergers & acquisitions to increase their market share.