Green Solutions for Foodservice: Exploring the Compostable Foodservice Packaging Market To Reinforce US$ 29.3 billion by 2033

Discover the potential of the Compostable Foodservice Packaging Market and its impact on the food industry. Learn about the latest trends, benefits, and challenges surrounding compostable packaging solutions. Dive into this comprehensive article to understand the growing demand for sustainable alternatives and the future of environmentally friendly foodservice packaging.

According to Future Market Insight, the global market for compostable foodservice packaging is forecast to reach US$ 18.9 billion in 2023 and accelerate at a moderate CAGR of 4.5% during the assessment period (2023 to 2033). Overall compostable foodservice packaging sales are predicted to total a valuation of US$ 29.3 billion by 2033.

Rising demand for eco-friendly and sustainable packaging solutions across diverse end-use industries to reduce environmental pollution levels is a key factor driving the global compostable foodservice packaging market forward.

Similarly, rising awareness levels, the growing need for achieving the sustainability goal among the brands, and the implementation of stringent government regulations on the usage of single-use plastic products are expected to push the demand for compostable food service packaging.

The Compostable Foodservice Packaging Market encompasses a wide range of eco-friendly packaging solutions specifically designed for the foodservice industry. These packaging materials are derived from renewable resources such as plant-based fibers, paper, and bioplastics, making them compostable under proper conditions. The market has witnessed significant growth in recent years due to increasing awareness about environmental issues and the need for sustainable alternatives.

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The Market Key Players Are:

  • Huhtamaki Oyj
  • Stora Enso Oyj
  • Georgia-Pacific LLC
  • WestRock Company
  • Mondi Group
  • Berry Global Group
  • Smurfit Kappa Group plc
  • Pactiv LLC
  • Genpak, LLC
  • Karat Packaging Inc.
  • Clearwater Paper Corporation
  • others

With plastics becoming one of the biggest challenges in the world right now, brands prolifically using such materials will need to act quickly to find reliable alternatives. Technological innovations are being made to reduce the price of compostable foodservice packaging, and FMI’s study assesses that the global efforts to become a more sustainable society will be instrumental in creating new growth opportunities for the market vendors.

Growing Demand for Sustainable Packaging Solutions

The Compostable Foodservice Packaging Market has experienced a surge in demand driven by various factors.

  1. Environmental Concerns: With growing awareness about the detrimental impact of traditional packaging on the environment, businesses and consumers are seeking more sustainable alternatives. Compostable foodservice packaging offers a solution that reduces plastic waste and lowers carbon emissions.
  2. Regulatory Support: Governments across the globe are implementing stringent regulations and policies to curb single-use plastic and promote compostable packaging. This has created a favorable environment for the growth of the Compostable Foodservice Packaging Market.
  3. Consumer Preference: Today’s consumers are increasingly conscious of the ecological footprint of their choices. They actively choose restaurants and food establishments that adopt sustainable practices, including compostable foodservice packaging.

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Key Takeaways from Compostable Foodservice Packaging Market

  • By material type, paper & paperboard segment is expected to expand at 5.5% CAGR during the forecast period.
  • The molded fiber sub-segment of paper & paperboard category is projected to register a CAGR of 6.9% between 2023 to 2033 due to its 100% biodegradable and compostable feature.
  • Based on product type, cups and trays segments collectively are estimated to account for around 48% of the market value share by the end of 2033.
  • By end use, delivery catering segment is anticipated to expand at 1.6 times the current market value during the forecast period.
  • Western Europe holds a significant portion of the global compostable foodservice packaging industry owing to the presence of strict recycling laws.
  • The USA compostable foodservice packaging market is forecast to create a growth opportunity of US$ 582.7 million during the assessment period.
  • Demand for compostable foodservice packaging across Germany is poised to increase at 3.1% CAGR throughout the forecast period.

 “A gradual shift from plastic foodservice packaging to greener material-based paper foodservice packaging has been witnessed in the past year. Biodegradable materials such as wood, corn starch, etc. offer sustainability added with proper packaging. Therefore, they have become ideal for making foodservice packaging,” says an FMI analyst.

Challenges in the Compostable Foodservice Packaging Market

While compostable foodservice packaging holds immense potential, it also faces certain challenges that need to be addressed.

  • Limited Industrial Composting Infrastructure- One of the primary challenges is the limited availability of industrial composting infrastructure. Compostable packaging requires specialized composting facilities for proper decomposition. Inadequate infrastructure hampers the efficient disposal and processing of compostable packaging, limiting its widespread adoption.
  • Cost Considerations- Compostable foodservice packaging often carries a higher price tag compared to conventional options. The cost of production, sourcing sustainable materials, and complying with regulations contribute to the higher prices. However, as the market matures and demand increases, economies of scale and technological advancements are expected to drive down costs.
  • Consumer Education and Awareness- Despite growing awareness, many consumers are still unfamiliar with compostable packaging and its proper disposal. Educating consumers about the benefits and correct usage of compostable foodservice packaging is essential for its success. Clear labeling and educational campaigns can help bridge this knowledge gap.

Rapid Expansion of Foodservice Industry to Boosting Compostable Foodservice Packaging Market

One of the most thriving and dynamic industries in the world is the foodservice industry. The sector has already unmatched growth, and it continues to generate revenue and create potential jobs. The development of the food production sector and the popularity of portable meals has improved the foodservice packaging sector.

The market for foodservice packaging is being further stimulated by the changing demographics and the increased internet usage among Generation Z. As more young people consume healthy, high-quality food that is packaged in hygienic ways, adoption of packaging solutions such as compostable cups, bowls, trays, etc. is increasing rapidly across foodservice industry.

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Compostable Foodservice Packaging Industry by Category

By Packaging Type:

  • Plates
  • Trays
  • Bowls
  • Cups
  • Clamshell
  • Cutlery
  • Pouches & Sachets
  • Others (Wraps, Straws, Cup Carriers, etc.)

By Material Type:

  • Plastic
    • PLA
    • PHA
    • PBS
    • PBAT
    • Starch Blends
    • Other Plastics
  • Paper & Paperboard
    • Coated Unbleached
    • Molded Fiber
    • Other Grades
  • Bagasse & Seaweed

By End Use:

  • Chain Restaurants
  • Non-Chain Restaurants
  • Chain Café
  • Non-Chain Café
  • Delivery Catering
  • Independent Sellers/ Kiosks
  • Others (FMCG, Hotels, Retailers)

The bottom-up and top-down approaches have been used to estimate the Compostable Foodservice Packaging market by type, end-use industry and region. The research methodology is used to calculate the market size includes the following steps:

The size of the Compostable Foodservice Packaging market has been derived from the aggregation of the market shares of the leading players for each product, and the forecast is based on the analysis of market trends, such as pricing and consumption of Compostable Foodservice Packaging in various end-use industries.
The key players in the Compostable Foodservice Packaging market have been identified through secondary research, and their revenues have been determined through primary and secondary research.
The size of the Compostable Foodservice Packaging market, by region, has been calculated by using the market sizes of each product in each end-use industry.
The size of the Compostable Foodservice Packaging market for each end-use industry, in terms of value, has been calculated by multiplying the market shares by the global value.

About Future Market Insights, Inc.

Future Market Insights, Inc. is an ESOMAR-certified business consulting & market research firm, a member of the Greater New York Chamber of Commerce and is headquartered in Delaware, USA. A recipient of Clutch Leaders Award 2022 on account of high client score (4.9/5), we have been collaborating with global enterprises in their business transformation journey and helping them deliver on their business ambitions. 80% of the largest Forbes 1000 enterprises are our clients. We serve global clients across all leading & niche market segments across all major industries.

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About the Author

Ronak Shah

Associate Vice President at Future Market Insights is deeply committed to uncovering actionable insights for consumer and food and beverage players. She brings a unique blend of analysis, industry trends, and consumer behavior to put data into perspective.

What she makes out of data becomes a delight to read. She has authored many opinions, including for publications like Process Industry Informer and Spinal Surgery News, as she understands the market pulse and consumers' shifting preferences.

She likes to bring experts to a roundtable to weigh the impact of a trend on an industry. Catch up with her discussion on the impact of AI in packaging.

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