On a global scale, the packaging industry is an enormous economic generator. The global packaging market, valued at $589.9 billion in 2015, will be worth $770.5 billion by 2020. Smithers statistics indicate that demand for the world packaging industry will reach $1.05 trillion by 2024.
Environmental impact is becoming increasingly important for consumers, and packaging companies are responding to the trend and acting accordingly. The traditional criteria of price, quality, hygiene, convenience and brand are still very important, but sustainability is the new watchword, and has become one of the highest consumer priorities when choosing a packaging model.
Consumer trends, habits and attitudes have changed, and their preferences and packaging demands have changed accordingly. Concern about single-use packaging and a strong preference for recyclable materials are developments that are here to stay. Consumers prefer fully recyclable plastic films and containers, more paper and board-based packaging, and films that are compostable.
In 2020, e-commerce has continued to grow. Packaging has become one of the highest priorities for e-commerce providers, and must satisfy high consumer expectations. The increasing focus on sustainability means that companies must adopt strategies to reduce the plastic waste that they generate. Every company that deals with packaged goods should consider joining the green wave; it’s all about responsibility through sustainable goods and environmentally-friendly products.
Consumer Goods and Retail Trends
A growing number of companies are moving to e-commerce, and a lot of organisations are looking to transition online. E-commerce is one of the driving forces in sustainable packaging, and many companies have announced their sustainability strategies, which include a target of using 100% reusable, recyclable, and compostable packaging.
Consumer Goods and Retail companies are making a great effort to push sustainability by revising their packaging portfolio, reducing the use of plastics and betting on the innovation of new and more recyclable materials in order to minimise waste. These companies are rethinking and redesigning their packaging portfolio, replacing plastic materials with fibre-based packaging and bio-derived products, and constantly looking for more eco-friendly forms of packaging.
Indeed, sustainability can be a competitive advantage, as consumers become increasingly aware of the importance of preserving the environment. Packaging is a tool that has often been used by marketers to make products stand out and appeal to both local and international customers. A corporate branding strategy that focuses on the sustainability of their product’s packaging is a marketing tool to show the company’s commitment to the environment.
However, sustainable packaging requires a high level of commitment. Companies are replacing non-recyclable multi-material flexible packaging with mono-material (polyethylene) packaging solutions; they are using low-emission technologies in their plants; they are replacing plastics with biodegradable polymers; they are using paper board which is specifically designed to be recycled in regular waste processing plants. That said, the sector needs more advanced recycling technologies in order to effectively manage packaging waste.
The packaging sector is a leader in the usage of bioplastics, and this is increasing due to growing environmental concerns across the world. The development of the plastic recycling business environment is having a deep impact upon the incentives and urgent demand for the development of biopolymer solutions. Many consumer goods, pharmaceuticals and beverage manufacturers are using bioplastics in their packaging, and are gradually incorporating the use of recycled plastics.
The challenge for this industry is to introduce compostable, recyclable, and fibre-based packaging at competitive prices, but the truth is that people are willing to pay a little bit more for products if the packaging used is recyclable.
The challenge of sustainability creates a new model of partnership and a much closer collaboration between all the parties involved, to pursue the objective of sustainability: packaging converters, consumer goods companies, retailers, recyclers, packaging machinery and automation solutions, companies innovating advanced recycling technologies, and additive business companies that promote biopolymers, presenting their environmental benefits and low carbon footprint alternatives to fossil-based plastics.
There are two main drivers of packaging sustainability: consumer awareness and government regulatory requirements. Governments and consumers are increasingly concerned about the environmental impact of plastic waste, and there is a great commitment to solving this problem.
Many countries have begun to take the concept of sustainability very seriously, promoting recycling standards and limiting or prohibiting the use of plastics to reduce environmental impact. Nevertheless, there are questions ahead regarding sustainability regulations: how can governments balance incentives and regulatory actions? Finding the right mix between subsidies and tax relief for companies that initiate sustainable practices with the harsher action of fines is a tricky balance for governments to accomplish.
In the G20 virtual summit, President Xi restated China’s pledge to achieve carbon neutrality by 2060. As consumption rises in China, there is a pressure to reduce the environmental impact of packaging, and China plays a critical role in reducing carbon emissions.
It is important to consider where companies are positioned in the push for sustainability regulation, as many corporations commit to adopt the UN’s Sustainable Development Goals and sign the Paris Agreement. The concept of sustainability is no longer seen as a bonus, but as integral to business operations.
One final question remains: how will regulation affect companies on their path to sustainable growth? It will certainly impact companies’ long-term growth and ROI, particularly environmental regulation. However, if governments implement tax incentives for sustainability, these regulations could be seen as an opportunity rather than a financial or administrative burden.