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Sustainable packaging 'immune' to economic downturn, report says

A new report shows there was “impressive” growth in sustainable packaging in 2008/2009 and predicts the market will reach $142.42 billion by 2015.
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FILED IN:  Sustainability  > Strategy
     

The global market for sustainable packaging is forecast to reach $142.42 billion by 2015, relates a new report, “Sustainable (Green) Packaging: A Global Strategic Business Report,” from Global Industry Analysts, Inc. Increased awareness of environmental hazards related to disposal and recycling of packaging wastes, government initiatives to minimize greenhouse gas emissions, and stringent regulations are driving the growth of sustainable packaging.

With environmental concerns gaining precedence the world over, there exists an increased demand for recyclable and safe packaging. Environmental issues such as global warming, a dearth of natural resources, and high energy consumption are driving the need for sustainability in packaging. Sustainability has become a key trend for packaging companies all over the world.

According to GIA, sustainable packaging involves the use of sustainable raw materials such as recycled materials and renewable resources. Companies are offering novel packaging designs, with improvements in several key performance areas, such as environmental friendliness, simplicity, material saving, and cost reduction without compromising on ease of use and convenience. Unlike other segments of the packaging industry, the report notes that sustainable packaging registered impressive growth during the period 2008-2009, and has been immune to the economic downturn. Sustainability helped companies as a medium to cut costs and reduce packaging waste using recycled and reusable materials.

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The report indicates that Europe and the U.S. represent the largest regions for sustainable packaging, together accounting for more than 70% of the global market. With sustainable packaging progressively becoming a mainstream global trend, several companies are adopting green packaging as a marketing tool. In addition, manufacturers are presently under pressure to use environmentally friendly materials and adopt methods that require low energy consumption and reduce the adverse environmental impact of packaging.

Rising environmental issues are also compelling legislative bodies in several countries to improve and implement laws and regulations for minimizing the adverse environmental impact of the packaging industry. Asia-Pacific is poised to witness the fastest growth in terms of use of green packaging, increasing at a CAGR of more than 10% during 2007 through 2015. Factors driving market growth include increased awareness about environmental concerns, government initiatives, growing economies, and a huge population.

In terms of market segmentation, recycled material constitutes the largest packaging category, contributing close to 90% of the total demand in the U.S. However, biodegradable materials are witnessing growing demand from the packaging industry, and represent the fastest growing segment. Biodegradable materials are easily decomposed by microorganisms and reduce packaging waste. In addition, the materials preserve food products and sustain freshness. Among biodegradables, bioplastics are registering increased demand in the green packaging market.

Key markets using sustainable packaging, according to the report, include cosmetics and personal care, food and beverage, foodservice, shipping, healthcare, and other markets. The increased demand for sustainable packaging in these end-use sectors is evident by the recent product launches with sustainability features.

Sustainable packaging is witnessing increased demand from cosmetic and personal care industries, mainly due to growing consumer preference for eco-friendly plastic packaging materials. More than 600 new beauty products with green labels were introduced in Europe alone during the past two years. Several food companies are announcing plans to switch to compostable biopolymer packaging.

Meanwhile unlike the food, beverage, and cosmetic industries, the medical sector lags behind in its use of sustainable packaging materials. Cost and regulatory concerns, a poor recycling infrastructure, and limited consumer demand are few factors responsible for preventing the medical device and pharmaceutical industries from switching to sustainable packaging.

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