The market for environmentally friendly packaging was worth $290.32 billion worldwide in 2021. The world is facing high levels of chronic disease, climate change and high levels of pollution.
The demand for healthy and green products is increasing. The market for green packaging is growing worldwide due to strict regulations on single-use plastics and complete bans in certain countries of plastic packaging.
Global customer preference for environmentally friendly packaging is increasing. So is awareness about the harmful effects of standard packaging on our environment. When companies adopt green packaging practices, they’re growing the confidence of consumers. The fastest growing niches in green packaging are food and beverage, healthcare, and personal care. Two key manufacturers of these products, including Unilever and Procter & Gamble, are in a race to see which company can make a complete shift to sustainable packages.
Recent research showed that recycled content was the most dominant segment in large companies’ packaging. It held 61% of the market share in 2020. This included recycled paper, plastic, and glass. Healthcare will be the most popular market in the next five years. This sector will see continued rapid growth due to the regulations surrounding packaging for medical devices and medications.
Geographic Trends in Green Packaging
There are important geographical trends in green packaging. Europe’s share of the global market for green packaging was 37% in 2020. Analysts believe that strict government regulations regarding packaging materials are responsible for this high market share. The Asia and Pacific Island markets offer the greatest opportunity for sustainable packaging growth, with the largest populations. This market is a major consumer of packaged food products.
Green Packaging by Industry
Food and beverage is the industry that has the highest demand for environmentally friendly packaging. People are increasingly looking for organic fabric, recyclable plastic, paper, and bio-plastic packaging for their food or beverages. These materials have lower environmental impact and are often biodegradable.
Opportunities for Profits
Companies that produce green packaging have small profit margins. Manufacturers that use new plastics are very competitive with recycled plastics. Companies are discouraged to innovate and switch to sustainable and recycled materials when they have low profit margins. For green packaging innovation to continue, a higher profit margin is crucial.
Opportunities for growth
There are many strategies that the biggest players in sustainable manufacturing use to develop their businesses. These strategies include more partnerships and expansion of manufacturing facilities. They also involve participation in regulatory groups. Nestle and Amcor collaborated to create sustainable food packages for Australia, as one example.
Over the next three to five year, manufacturers of green packaging will face many challenges. One is a low awareness of the green packaging benefits. Many markets that are less developed lack awareness of the benefits of green materials. People who live in these areas prefer plastic because it’s familiar, cheap and lasts for a long time.