Around the world, the environmentally friendly packaging market had a value of $290.32 billion in 2021. The world is in the midst of climate change, high pollution and an increasing level of chronic diseases.
The demand for green and healthy products is growing. Strict regulations on single-use plastic and complete bans of plastic packaging in some countries are two forces that are driving the worldwide growth of the market for green packaging.
The global shift in customer preferences for an environmentally friendly package is on the rise, as is awareness of the negative effects of standard packaging on the environment. When companies adopt green packaging practices, they’re growing the confidence of consumers. Food and beverage, healthcare and personal care are the niches that will grow the fastest when it comes to implementing green packaging. 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.
In a recent report of large companies and their packaging types, the recycled content segment was dominant. It accounted for a 61% market share in 2020. This segment included recycled paper, plastic and glass. Healthcare is the most favored market for the upcoming five years. In particular, the regulations around packaging for medications and medical devices will promote ongoing fast growth in this sector.
Geographic Trends in Green Packaging
There are important geographic trends in green packaging. Europe’s share of the global market for green packaging was 37% in 2020. Analysts state that this high market share is due to strict government regulations on packaging materials. The best opportunity for growth in sustainable packaging is in the Asia and Pacific Island market, which also has the largest population. This market has a huge demand for packaged food products.
Green Packaging By Industry
The industry with the highest demand for green packaging is the food and beverage industry. People increasingly want organic fabric, recyclable plastic and paper, bio-plastic or refurbished materials as the packaging for their food and beverages. All of these materials have lower environmental impacts, and many of them are biodegradable.
Opportunities for Profits
Companies that manufacture green packaging operate at small profit margins. Recycled plastics have a lot of competition from manufacturers that use new plastics. When there are low profit margins, companies are discouraged from innovating and switching over to recycled and sustainable materials. A higher profit margin is key to continued innovation for green packaging.
Opportunities for Growth
The biggest players in sustainable manufacturing engage in a variety of developmental strategies. These strategies include more partnerships, expansion of manufacturing facilities and involvement in regulatory groups. In one example, Nestle and Amcor partnered to create sustainable food packages in Australia.
Challenges for the Future
Manufacturers of green packaging will face a variety of challenges over the next three to five years. One is low awareness of the benefits of green packaging. Some underdeveloped markets lack knowledge of the benefits of using green materials. People who live in these areas prefer plastic because it’s familiar, cheap and lasts for a long time.