Biodegradable Packaging Market Trends, Statistics, Growth, and Forecasts

Market Overview

The increase in the use of biodegradable packaging solutions in packaging needs is driven by the continuously increasing demand for sustainable products by consumers and brands alike. This is due to a growing awareness of the impact on the environment and the need to reduce the dependency on fossil resources as well as the continuous advancements and innovations of the bioplastics industry in new materials with improved properties and new functionalities

Single-use Plastics Directive and the publication of the new EU Commission's European Green Deal have led to a strong dynamic, which will even intensify in 2020. As a result, the main aspects of the European legal framework for plastics are currently under revision. This provides new opportunities for biodegradable packaging that can play an essential role in achieving a resource-efficient, low-carbon circular economy pursued by the European Union

In the United States, state-wide bans against plastic bags are being put into place. Eight states have passed legislation banning single-use plastic bags, with three California, Hawaii, and Oregon in effect as of February 2020. The countries in the Asia-Pacific regions have also cracked down against single-use plastics. For instance, China unveiled a significant plan to reduce single-use plastics across the country to ban non-degradable bags in major cities by the end of 2020 and in all cities and towns by 2022

Increasing demand for sustainable alternatives for regular plastic disposables, there is a worldwide shortage of PLA (resin). Companies, such as biofutura, which supply biobased products are facing stock problems worldwide; only a few factories produce the raw material for PLA products. The natural calamity, such as floods, tornados, and earthquakes, also affects the supply of raw material of bioplastic and biodegradable packaging solutions as mostly these raw materials are based out of fruits, vegetables, and agricultural products. Raw materials for bioplastics may come from crop biomass that can face competitive pressures from agricultural and biofuels interests. In addition, the use of genetically modified bacteria and plants in the production of crops for bioplastics is controversial, as some believe they may lead to systematic degradation of biodiversity in ecosystems in the future.

Bioplastic market is a very small and niche market with a global production of 2.11 million metric ton in 2019, a fraction of the more than 359 million metric ton of plastic produced annually. Bioplastic packaging only constituted 0.02% of all patent output. Factors, such as bioplastics, lack mechanical strength compared to its petrochemical-based counterpart, and the economics of production are holding back its growth and development.

Segmentation by Product

According to the UN Environment, the world currently produces about 300 million metric ton of plastic waste every year. The increase in R&D activities that target enhanced material capabilities is expected to provide a strong impetus for market growth. According to a research study (March 2020) published by the American Journal of Nano Research and Applications highlighted the manufacturing of biodegradable plastic packaging film from the starch of roots and tubers, such as potatoes, sweet potatoes, ensete, cassava, taro, and yam starch.

The increasing adoption of sustainable packaging with eco-friendly and biodegradable materials, coupled with the exceptional demand from medical-grade kraft paper at the pandemic, has augmented a considerable demand for kraft paper packaging. The growing awareness among environmentalists and governments about the hazards of using plastic is forcing them to focus on greener alternatives, favoring the adoption of kraft paper. Furthermore, the extensive ban on plastic materials in developed countries, such as the United States as well as the European countries, coupled with technological innovations, is also aiding the adoption.

Flexible paper packaging is primarily driven by significant use in the food and beverage, industrial goods, and personal care industries. In a meaningful context where the preservation of the environment is at the heart of customer's concerns, waste management and the usage of eco-friendly packaging have become a mandatory part for all food and beverage distribution networks.

The e-commerce industry has emerged as a significant sector in recent years. Prominent e-commerce companies, such as Flipkart and Amazon, have been using corrugated fiberboard for the principal packaging and rely on plastic packaging for individual items.

Segmentation by Geography

In the United States, the rising awareness among consumers and favorable regulations from the government are expected to drive the demand for biodegradable packaging over the forecast period. According to the United States Environmental Protection Agency, the United States generates almost 80 million metric ton of packaging waste each year. About half of the packaging waste in the country comes from food and beverage products. The agency mentioned that large food corporations, like Nestle and Unilever, generate majority of the plastic waste.

Recognizing this issue, and under pressure from consumers, several of these corporations have recently pledged to reduce the environmental impact of their packaging. Many smaller companies in the food and beverage industry are doing the same, and some of them have been at the forefront of packaging innovations for years. Food Tank highlights 16 food and beverage companies to exhibit the industry's various approaches to sustainable packaging.

The quickly evolving biodegradable packaging industry and awareness in consumers in Canada prompted bio-degradable products to undergo a paradigm shift in the past few years. The industry in the region has kept itself armed with technological innovations to provide sustainable and affordable packaging solutions.

Canada is facing a growing plastic waste challenge, and it is calling for action on plastic waste reduction. It has gained traction over the past years. Moreover, according to the International Institute for Sustainable Development, Canada's current plastic waste management system proves to be a lost economic opportunity, representing a loss of nearly CAD 8 billion, which is expected to increase to over CAD 11 billion by 2030, thus acting as a daunting economic and environmental threat.

According to Oceana Inc., in Canada, the volume of plastic waste is expected to increase four times by 2050. However, about 86% of Canada's plastic waste ends up in landfills, while a meagre 9% is recycled. The rest is burned to create energy, which causes emission problems, or the plastic enters the environment as litter. Consequently, switching to biodegradable packaging is a sustainable alternative to boosting the growth of the market.