Compostable Packaging Market Size, Share, Industry, Forecast and outlook (2024-2031)

Compostable Packaging Market is Segmented By Product (Bags, Clamshells, Pouches & Sachets, Cutlery, Trays, Cups, Plates, Films, Lids, Straws, Bowls, Others), By Material (Paper & Paperboard, Bio-Plastic, Others), By Packaging Type (Primary Packaging, Secondary Packaging, Tertiary packaging), By Distribution Channel (Convenience Stores, Specialty Stores, B2B, E-commerce, Supermarkets/Hypermarkets, Departmental Stores, Others), By End-User (Medical, Personal & Home Care, Electrical & Electronics, Food & Beverages, Automotive, Textile Goods, Agriculture, Chemical, Others), By Region (North America, Latin America, Europe, Asia Pacific, Middle East, and Africa) – Share, Size, Outlook, and Opportunity Analysis,  2024-2031

Report Overview

Compostable Packaging Market size is estimated to reach at CAGR of 6.5% during the forecast period 2024-2031

Compostable packaging products are packing products that can disintegrate and biodegrade into natural elements like biomass, carbon dioxide and water, without leaving any toxicity in the soil. Apart from the ability to decompose, biodegradable materials go one step further by supplying nutrients to the environment once they have entirely decomposed. 

Compostable packaging products are generally obtained from renewable sources such as plant products obtained from starch, corn, wood pulp, among others. Numerous advanced pieces of machinery are utilized to manufacture compostable packaging and these products have a widespread application in industries such as food and beverages, packaging, among others. The product line in compostable packaging ranges from bags to straws covering pouches, films, labels and plates. Compostable packaging products are currently identified as one of the newest vogues for a sustainable business. The respective products offer excellent performance as well as help the business eliminate landfill waste.

Compostable Packaging Market Summary

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Compostable Packaging Market Dynamics

Growing environmental awareness across the globe and the requirement of sustainable packaging in the food and beverages market due to the ban of plastic products propels the growth of the global compostable market. Nevertheless, the comparatively higher price of compostable packaging to its plastic counterparts restricts the market growth.

Growing environmental awareness and the need for compostable packaging as an alternative to plastic packaging products in food and beverages industry

Since modernity is witnessing a devastating change in climate and the environment, widespread awareness is being spread on the importance of environmental protection and the ban of plastic products that are harmful to the environment. However, upon the ban of plastic products, the need for alternatives skyrockets, particularly in the food and beverages market, as it's a drastically growing market.

Because of global environmental pollution concerns, numerous governments have already outlawed the use of plastic for packaging. One of the world's largest plastic users, China has announced a massive initiative to minimize single-use plastics across the country. The country already banned the production and use of non-biodegradable bags in its major cities at the end of 2020. The Chinese government also announced that this ban would be further expanded to all its cities and villages. With rising consumer awareness, a huge demand for eco-friendly compostable packaging is rising extensively.

Since compostable packaging products are environmentally friendly and fulfilling to the environment in terms of improving their quality, the adoption of these products as alternatives to plastic packaging is growing extensively. Furthermore, the increasing government initiatives and support schemes also help drive the compostable packaging market and the extensive adoption of these products as alternatives to plastic packaging products.

According to the European Bioplastic Organization, global bioplastic production reached 2.114 million tonnes in 2019 and would further expand to 2.426 million tonnes in 2020 due to rising demand. Due to the restriction on plastics, more demand is generated by foodservice providers such as restaurants, hotels, food stalls and retail food suppliers.

Higher price of compostable packaging in comparison to its plastic alternatives

Since compostable packaging is obtained from biodegradable raw materials and of organic origin, the cost of production and the final product could be enormous compared to plastic products obtained directly by processing crude oil. Further, the amount of raw material required to manufacture these products is comparatively high compared to the typical raw materials utilized to produce plastic packing products.

As a result of the high price range and humongous raw material requirement compared to plastic alternatives, many manufacturers, particularly small-scale manufacturers, find it hard to get involved in compostable films, thereby limiting their production and sales. As a result, the respective factor could be considered a market restraint to the global compostable packaging market.

COVID-19 Impact Analysis

The global compostable packaging industry has seen a minor decline due to the COVID-19 outbreak, which forced the closure of manufacturing plants across the globe and several major end-user industries. The temporary halt in export-import activities across global borders and disruptions experienced in the supply chain of raw materials and final products due to the COVID-19 epidemic further slowed the market. 

However, the global compostable packaging market is expected to experience a hike in demand and sales in the post-second wave scenario. The food and beverages industry, the highest end-user of compostable packaging, is experiencing massive growth. Further, the anti-plastic movement that gained extra strength in the post-pandemic period also is boosting the demand and sales of the global compostable packaging market. As a result, the key players in compostable packaging market are indulging in extensive investments and product launches, particularly for packaging in the food and beverages market and medical and healthcare industries. For instance, on November 22 2019, SupplyCompass developed a corn-based sustainable, compostable packaging biopolymer for fashion brands. 

Furthermore, during the COVID-19 pandemic, numerous significant manufacturers also developed novel sustainable packaging methods for the pharmaceutical sector, such as when Rejuvenated, a UK based supplement company, debuted its first line of compostable packaging for its Collagen Shots product on February 5 2020. The compostable pouches are made of a three-layer laminate with a natural adhesive similar to that of plastic. The respective market is further expected to grow extensively once the pandemic subsides.

Compostable Packaging Market Segmentation Analysis

The global Compostable Packaging is segmented based on product, material, packaging type, distribution channel, end-user and region.

Based on product, the global compostable packaging market is segmented into bags, clamshells, pouches & sachets, cutlery, trays, cups, plates, films, lids, straws, bowls and others. Due to increased demand from top food chain restaurants, food and beverage production industries, pouches and sachets could be considered the dominating segment and have the biggest market share. Further, pouches and sachets also find application in the packaging of certain pharmaceutical and medical products. 

Compostable Packaging Market Geographical Shares

Asia-Pacific holds the largest market share global Compostable Packaging Market

The Asia-Pacific dominates the global compostable packaging market in terms of market sales due to various growing industrialization, manufacturing businesses and rising investment by the major players. Furthermore, the growth of compostable packaging in terms of sales, demand and market share in the Asia-Pacific area is fueled by increased government and private sector investment and adequate government initiatives and programs to support the market growth. China is the dominant market player in the Asia-Pacific due to numerous key manufacturers, cheap labor and growing demand for sustainable packaging in the country's extensively growing food and beverages industry. 

The growth experienced by North America is almost as sweet as Asia-pacific, owing to the presence of market players with advanced, patented technology and materials utilized in the production of compostable packaging solutions. Moreover, the stringent environmental laws and large-scale adoption of compostable packaging in industries such as food and beverages, automotive, electrical & electronics industries, among others located in North America, particularly in U.S. and Canada, also supplement the growth of compostable packaging market. 

Compostable Packaging Market Companies and Competitive Landscape

The compostable packaging market is moderately competitive with the presence of local as well as global companies. Key players contributing to the market's growth include BASF SE, Smurfit Kappa, Mondi, Futamura Group, WestRock Company, Biopak, Amcor plc TIPA Compostable Packaging, Ultra Green Sustainable Packaging, Wuxi Topteam Co.Ltd, among others. 

The major players are adopting several growth strategies such as product launches, acquisitions and collaborations, contributing to the growth of the compostable packaging market. Patronage, for instance, launched a unique recyclable and biodegradable, compostable plastic packaging solution for the pharmaceutical packaging sector on January 21, 2020.

BASF SE: 

Overview:

BASF SE is based in Ludwigshafen, Germany and was founded in 1865. The corporation employs over 117,000 people and serves customers from practically every industry. The company has six key production sites with 390 smaller production sites in over 80 countries. The company operates in every country globally. Chemicals, materials, industrial solutions, surface technologies, nutrition & care and agricultural solutions make up the company's product line. 

Product Portfolio: The company’s product portfolio of compostable packaging includes: 

• Biopolymer Ecovio: The product is compostable and partially biodegradable. Organic waste bags and shopping bags made of ecovio majorly find two applications, first for shopping and then for disposing of organic garbage. The polymer employed for its construction is both biobased and biodegradable.

Key Development: 

• BASF and BillerudKorsnäs developed a novel home-compostable paper laminate for flexible packaging on December 3, 2020, a multi-layered film composed of BillerudKorsnäs ConFlex Silk paper. The company created a home-compostable solution that expands flexible packaging applications' end-of-life alternatives.
• Additionally, BASF and Fabbri Group released a compostable cling film for food packaging on February 5, 2020. The new product is breathable, mechanically effective and aesthetically pleasing certified compostable packaging.