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Transcript created by AI, there may be transcription errors.
Matt Reynolds:
Hi, I’m Matt Reynolds, chief editor of Packaging World, here with my colleague Anne Marie Mohan. She’s the senior editor of the magazine. Welcome to a quick sneak-peek overview of the results of our Packaging World Reader Survey on sustainable packaging trends for 2026. So our editorial staff recently completed the production of Packaging World’s 2026 Annual Outlook report. It’s a broad report that is a second annual of its kind, and it spans the packaging universe. Subjects that we looked into include healthcare packaging, contract packaging, packaging workforce. If I’m forgetting anything, let me know. Anne Marie. Packaging automation, robotics, digital transformation and digitalization and packaging, e-commerce and direct to consumer. And of course, the topic of the day. The reason we are here today, sustainable packaging.
So the full report, all those subjects, all the charts and graphs and everything are available at the shorty link you see on your screen, it’s pwgo.to/9052. Hopefully all the appropriate links to the full report are going to be available on whatever channel through which you’re viewing this video. So it should be on our website, should be on LinkedIn. Just give that link a click and access the full report. But today we wanted to give you a quick taste, kind of a snapshot of the results of one of the really the third-rail topics that we’ve been talking quite a bit about in packaging. And that’s why I’m here with Anne Marie and she was the brains behind our 2026 sustainability survey. So Anne Marie, let’s jump right in. Welcome.
Anne Marie Mohan:
Great, great to be here. Hi, Matt.
Matt Reynolds:
Good. So this year’s survey shows a continued shift towards paper and fiber. We call it paperization, and we saw that in the 2025 report too, but at the same time, there’s a massive increase in rigid plastics, especially in those mono-material formats. So how do you explain this apparent contradiction and what does it reveal about how brands really define sustainable packaging?
Anne Marie Mohan:
Well, Matt, it’s very interesting, when we talk about how brands define sustainability, I would say it’s not so much about how they define sustainability, but more about how their customers and consumers define sustainability. Last year we saw that was a big driver of changes was consumer perception and brand reputation. But this year I talked to David Feber of McKinsey—he’s a senior partner and packaging expert at McKinsey and Company—to kind of understand these results better, including this shift with rigid packaging. And he shared with me that a recent sustainability report that they did showed that consumers really equate recyclability with sustainability. So I would say that is more important today than the material that’s being used initially. About five or six years ago, there was a real consumer backlash against plastic. We saw the turtles with the straw in their noses and consumers were horrified.
And so brands had a knee-jerk reaction where they were trying to eliminate all plastic. And that was, I think, a big driver of paper trying to get rid of plastic altogether. But there are some challenges with paper, that trend is still continuing. But I think there are challenges with barrier. And if you’re using a barrier that is not recyclable, then that doesn’t really solve the problem of recyclability, although it’s not plastic, but it doesn’t satisfy that recyclability requirement. And there are issues with paper packaging going through MRFs. If it’s a tube, a different kind of format, sometimes it doesn’t go through the MRF as would a traditional carton. So they were making that switch. But in the meantime, we found that rigid plastics, especially mono-material, they have excellent performance attributes. They’re plastic. But I think, as I said, recyclability is becoming more of a driver than the material itself.
Rigid packaging offers barrier properties, has excellent shelf life, and it is highly compatible with existing recycling streams. So overall though, you’ll find throughout our conversation today, one of the biggest differences between last year and this year’s report is that EPR regulations are becoming a huge driver of these changes. So recyclability is another aspect of that. Brand owners today are going to have to pay fees based on how recyclable a package is, how much material it uses, and how well it performs in real recovery systems. So over and over we see that it’s a financial decision now, and we see materials like paperboard, corrugated, and mono-material plastics are classified under EPR as lower-fee materials, hence the driver of these materials for packaging for our respondents use of materials.
Matt Reynolds:
So a lot of different variables at play. It’s kind of hard to name a single driver when there’s so many pressures on the industry in various different directions. But interesting to hear about recycling and recyclability actually being favorable for the amount of material, especially rigid plastic. So maybe some wind in the sails of plastic that wasn’t there not too long ago. Also, in the 2025 survey, roughly half, actually a little more than half the companies surveyed said they had no plans to change materials. In the 2026 version that we’re publishing, now that number dropped to just 20%. So really what that means is 80%, the lion’s share, have some plan to think about changing materials. So what’s driving this acceleration towards thinking about different materials and why is it happening now?
Anne Marie Mohan:
Yes, that was a very interesting finding, and I think there are two forces at work here. And again, EPR programs, labeling laws, tightening of environmental claims. It’s not just a nice to have anymore. It’s really something that brand owners have to consider in order to reduce costs. They can no longer afford to delay getting their data in. For EPR, we have seven states now that have active EPR laws. Oregon’s EPR regulations are now in effect. And there are many other states that have introduced or are considering EPR legislation. So it is real. Now. The second thing, and David Feber shared with this, shared this with me, excuse me, he talked about the fact that a lot of packaging projects were kind of put on the back burner during the pandemic due to supply chain chaos and resin uncertainty. And now the conditions have stabilized a bit. Brands are finally executing plans that they already had on the roadmap, but were unable to move forward with because of some of those pandemic-related issues.
Matt Reynolds:
So some pent-up innovation that was kind of stymied for a brief time with supply chain disruption, but now it’s back on track, so to speak, when we talk about packaging materials that CPGs currently use and what they plan to use in the coming year. So kind of two different, what they’re currently using versus what they plan to use. Bio-based and compostable packaging essentially fell to zero in the data. That’s pretty striking given how popular these materials were. Last year in 2025, about 10% of respondents said they were using bio-based or compostable packaging, and 21% say they expected to use it in the coming year. So what changed?
Anne Marie Mohan:
It’s interesting, we saw the same dramatic shift with the result of our parent company’s report. They did a Compass report on material usage that looked five to 10 years out. When they originally did the study in 2023, the big news was that 49% of respondents said they were extremely likely or somewhat likely to increase their use of compostable packaging over the next five years. That was the big news. It was very surprising, and it was publicized all over that we’re moving to compostables. But their most recent report in 2025 showed that that number had dropped by 8%. Olga Kachook, who I also spoke with to analyze some of these results, she’s the director of the Sustainable Packaging Coalition. She also referred back to EPR. She said that compostable packaging is not being given strong incentives in the EPR structures. And in some cases, companies are penalized for the use of compostable packaging.
But there are other factors as well. I think the use of compostable packaging is much more complex than brand owners originally believed. And I think the thought is you use it, you can throw it on the ground, it disappears. That’s not the case. You can replace it one-to-one with existing plastics, but that’s not the case either. But there are so many different types of bioplastics that can be used with so many different applications, just like regular polyolefins and PET. So if you want to multilayer structure, sure, these materials behave differently than fossil based plastics, so it’s not an easy switch. In fact, PepsiCo, I visited their Plano facility a couple of years ago, and they’re trying to move to a compostable snack bag that is home compostable, and they’ve done some pilots, but we’re talking about three to five layers, and it’s not an easy switch.
In fact, they have a whole greenhouse learning lab to make this commercially viable at scale. Another issue, composters don’t always want compostable packaging. I mean, we’re in the packaging fields, we always think about, oh, compostable packaging, throw it in the compost bin. But composters want organic materials. They want nitrogen-rich organic materials. They’re selling that product. So a lot of times compostable packaging isn’t acceptable with these companies, and it doesn’t end up where it’s supposed to. And then at the end of the day, there’s all also a higher cost associated with compostable plastics. So there are a lot of different factors that I think led to this drop in potential usage of the material.
Matt Reynolds:
Yeah, that seems to be a recurring theme. There’s not just one singular driver, it’s just kind of a tapestry of different incentives. Speaking of incentives, you mentioned EPR. That kind of weighs into every decision on ways that it didn’t, and you mentioned the incentive structure, what we would call eco-modulation seems to be not in favor in a lot of these eco-modulation schemes that we see in favor of composting as opposed to recycling where that is the carrot versus the stick. So with recyclability being still the top driver, both amongst the consumers and apparently recyclability being a top driver amongst these EPR schemes, but your report shows big jumps in material reduction and recycled content. So how are brands’ priorities evolving beyond simply it’s recyclable versus all of those other ways of thinking about circularity?
Anne Marie Mohan:
So it’s interesting. Last year when we conducted this study and material reduction was not a huge factor, Olga Kachook had said to me that that really should be the focus, because as we think about the FDA’s waste hierarchy, it’s reduce, reuse, recycle. So companies really need to look at reducing the material in the first place. So I would’ve thought that that was the low-hanging fruit that companies had already reduced as much as they could. However, David Feber said to me that lightweighting will never stop because there are constantly new technologies continuing to emerge that reduce the material and while at the same time retaining the strength of the materials. So that’s not something that’s going to stop.
As for recycled content, we also know that some EPR regulations, I can think of California in particular, they regulate how much recycled content needs to be used in packaging. And there’s kind of a growth as the years go by and the amount that should be used. And then Compass, the PMMI report, also talks about PCR integration being able to reduce both environmental impact and EPR costs. And then interestingly enough, I just saw the other day, the SPC put out a study that showed that the number-one purchase intent driver for consumers catching up to recyclability is recycled content, when they understand what it means. They often equate it with recyclability. But once they understand this is material that’s being reused, they’re very supportive of it. And the sweet spot SPC found is between 25 and 75% recycled content. Our study showed that the highest percentage now of PCR usage is in the one to 25% range at 54%, followed by 26 to 50% PCR usage at 26%, and 51 to 75% at 17% PCR. So brand owners have a ways to go, but that is a way that they can address consumer desire for more sustainable packaging.
Matt Reynolds:
And there’s just so much material that is available. The material has to become available. It has to be recycled in the first place for it to be PCR post-consumer at least recycled material. And I find it interesting that material reduction remains a major driver according to David Feber because it seems like that would’ve been the lowest-hanging fruit years and years ago to remove as much material as possible. But I guess with advancements in material technology, who knows how far we can go to reduce the amount of material, while maintaining stability and barrier and all of the things that are required to transport a package to your doorstep or to retail shelf. So interesting stuff.
One of the biggest conclusions of the sustainability report is that regulatory pressure is now more of a driver for sustainable packaging than consumer demand. Those three little letters, EPR, how does the rise of EPR and labeling rules and truth in labeling and so on, how does that change the way companies approach their packaging strategies?
Anne Marie Mohan:
Well, as you can see, it’s been a huge driver in almost every category we’ve talked about and every issue or that we discussed in the report. And I think for years, companies looked at sustainability as a nice to have, there were financial benefits when you think about investors and stakeholders. There was also the brand reputation. And a lot of companies jumped on the Ellen MacArthur Foundation’s Global Commitment bandwagon to really document their changes. Although the changes have been very slow. But now with EPR, it’s really a non-negotiable. They have to design their packaging to avoid fees and reduce liability and withstand regulatory audits. So it’s very different than just trying to meet consumer desires or brand reputation. It’s something they have to do. Materials that before had ambiguous claims like compostable or eco-friendly are being replaced by materials that can be clearly documented as recyclable with real recovery rates.
Matt Reynolds:
Okay. Now, believe it or not, that everything that we just discussed is only a sliver of our Annual Outlook Report and really is only a sliver of a sliver of the sustainability chapter of the Packaging World 2026 Annual Outlook Report. So be sure to be on the lookout for that. There should be links available for you to download the entire report and look at all of the charts and graphs and so on in detail. So Anne Marie, that’s all the time we have today. Thanks for joining me, and we’ll be looking out for the next annual outlook report before too long. 2027 is somehow right around the corner. So thanks everybody.
Anne Marie Mohan:
Thank you.
