Global compostable packaging overview and trends

Global compostable packaging overview and trends

The Pulp and Paper Times

Compostable products are materials that can biodegrade and disintegrate into natural elements in a composting environment, leaving no harmful residues. To qualify as compostable, packaging materials and products must break down completely and convert into natural elements within a short period following disposal. 

North America is the leading market player in the global compostable packaging sector (by revenues and market share) while Asia Pacific is the largest (by volume), a trend that is likely to be sustained. The global compostable packaging market was USD 46.36 billion in 2021 and is estimated to grow to USD 75 billion by 2029, a CAGR of 6.20%. With government policies directed at sustainable packaging, a rapid growth in the global compostable packaging market is forecast. The rise of e-commerce and online food orders, the compostable packaging market is expected to expand 1.5x during the projected period.

Compostable packaging drivers 
Online retail: Online shopping has expanded in China, India, Brazil, ASEAN and others due to the widening use of smartphones leading to online shopping translating into enhanced use of corrugated boxes and paper bags.

Literacy: India’s literacy rate is 77 percent. The government has allocated INR 1,12,899 crores to education in the Union Budget 2023. This quantum is expected to widen the market for eco-friendly packaging awareness. 

E-commerce: The Indian e-commerce market is expected to grow from USD 74.8 billion in 2022 to USD 350 billion by 2030, influencing the use of sustainable packaging.

Rising population: India’s population has surpassed China and is estimated at 1.41 billion, catalyzing the Indian packaging sector.

Demographic dividend: The Indian population’s median age is now at 28.4 years in 2022 as against 30 years of global average, strengthening the offtake of green packaging products

Restaurant takeaway: The Indian food and beverage packaging market stood at USD 31.75 billion in 2022. Between 2023 to 2029, Indian food and beverage packaging market size is expected to grow at a CAGR of 14.8 percent growing to USD 85.9 billion by 2029. Higher standard of living and fast paced urban life are the factors which are contributing to the growth of online food delivery paired with packaged food.

Organized retail: By 2032, the retail industry is expected to be worth a staggering USD 2 trillion. The percentage of contemporary retail (including e-commerce) is predicted to rise to 35 percent, while traditional retail is anticipated to decline to 65 percent, despite the fact that the industry is mostly unorganized. India’s per capita net national income is estimated to be INR 172,000 yearly for FY 2022- 23, recording a growth of 14.4 percent over the previous year.

Indian packaging industry overview

The growth in the Indian packaging industry has been catalyzed by a surge in e-commerce, food processing, pharmaceuticals, FMCG, manufacturing and health care sectors. The Indian government’s ‘Make in India’ initiative has catalyzed the packaging industry and the country’s paper and packaging industry is the fifth largest sector in the economy. 

India is a major exporter of flattened cans, printed sheets, components, crown cork, lug caps, plastic film laminates, craft paper, paperboard and packaging machinery. The laminates and flexible packaging segment, particularly PET and woven sacks are growing fastest. Packaging-grade paper accounts for 55 percent of the main types of paper produced domestically in the paper and paperboard industry. India is a significant player in the global packaging materials market, catalyzing exports. 

India’s export of packaging materials grew at a CAGR of 9.9 percent to USD 1,119 million in 2021-22 up from USD 844 million in 2018-19. United States was the leading export destination for the Indian packaging industry, followed by United Kingdom, United Arab Emirates, Netherlands and Germany.

The Indian paper and paperboard market is also predicted to expand at 6-7% annually. Source: ibef.org, niir.org) India’s paper and packaging industry is expected to grow to a value of $204.81 billion by 2025, with a CAGR of 26.7% from 2020 to 2025.

The above report has been extracted from the Pakka Limited’s Annual report for FY 22-23
 

Web Title: Global compostable packaging overview and trends