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.
Compostable foodservice packaging refers to packaging materials that are designed to break down into compost when disposed of in a composting facility. These materials are typically made from renewable resources such as plant-based materials, including corn starch, sugarcane, and bamboo. Unlike traditional packaging materials like plastic and Styrofoam, which can take hundreds of years to decompose, compostable foodservice packaging offers a sustainable solution that reduces waste and minimizes environmental impact.
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.
Key Factors Driving Market Growth
The compostable foodservice packaging market is being driven by several key factors that are shaping its growth trajectory. Let’s take a closer look at these factors:
Rising Awareness of Environmental Impact
With growing concerns about plastic pollution and its detrimental effects on the environment, there is a heightened awareness among businesses and consumers about the need for sustainable packaging solutions. Compostable foodservice packaging offers a viable solution, as it significantly reduces the carbon footprint and waste generation associated with traditional plastic packaging.
Government Regulations and Initiatives
Government regulations and initiatives aimed at reducing plastic waste are playing a crucial role in driving the demand for compostable foodservice packaging. Many countries have implemented bans or levies on single-use plastics, creating a favorable regulatory environment for compostable alternatives. These regulations encourage businesses to adopt sustainable practices and stimulate market growth.
Advantages of Compostable Foodservice Packaging
Compostable foodservice packaging offers several advantages over conventional plastic packaging. It is made from renewable resources, such as plant-based materials, which are biodegradable and compostable. This packaging type also boasts excellent performance properties, including heat resistance, grease resistance, and durability. Moreover, it provides a positive brand image for businesses by showcasing their commitment to sustainability.
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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 Faced by the Market
While the compostable foodservice packaging market is experiencing rapid growth, it is not without its challenges. Let’s explore some of the key hurdles that need to be addressed:
Lack of Infrastructure for Composting
One of the significant challenges faced by the compostable foodservice packaging market is the lack of proper infrastructure for composting. Composting facilities are necessary to process compostable materials effectively. Without sufficient infrastructure, compostable packaging may end up in landfills or conventional recycling streams, defeating its purpose.
Cost Considerations for Businesses
The cost of compostable foodservice packaging can be higher compared to conventional plastic alternatives. This cost differential can pose a challenge for businesses, particularly small and medium-sized enterprises. However, as the demand for compostable packaging continues to grow and economies of scale come into play, the prices are expected to become more competitive.
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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