Charting the Future: Biodegradable Packaging Market Growth and Opportunities

Charting the Future: Biodegradable Packaging Market Growth and Opportunities

The Biodegradable Packaging Market is estimated to be valued at US$ 37,919.7 Mn in 2023 and is expected to exhibit a CAGR of 20.0% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.

Market Overview:
Biodegradable packaging refers to packaging materials that can be decomposed by microorganisms such as bacteria and fungi into water, carbon dioxide, and natural organic matter. It includes products made from paper, paperboard, molded fiber, plastics derived from renewable resources such as starch and cellulose among others. Advantages of biodegradable packaging includes low toxicity, environmental friendly and reduced carbon footprint. Need for eco-friendly solutions for packaging is driving demand for biodegradable packaging across food and beverage, pharmaceutical and personal care industries.

Market key trends:
One of the key trends spurring growth of biodegradable packaging market includes increasing environmental concerns amongst consumers and regulations on use of conventional plastics. Traditional plastics are not biodegradable and causes pollution on disposal. Stringent regulations on use of plastics by governments across the globe is encouraging adoption of sustainable biodegradable alternatives. For instance, European Union has enforced ban on certain single use plastics items from July 2021. Also, changing consumer preferences towards eco-friendly products is positively impacting the biodegradable packaging market growth. Manufacturers are increasingly focusing on developing innovative and sustainable packaging solutions made from green materials to tap demand from environment conscious consumers and meet regulatory standards.

Porter’s Analysis

• Threat of new entrants: The threat of new entrants is moderate due to high capital requirement, research and development cost for new technologies and brand loyalty of existing players.
• Bargaining power of buyers: The bargaining power of buyers is moderate as buyers demand higher quality yet competitive pricing and have options to switch to substitutes.
• Bargaining power of suppliers: The bargaining power of suppliers is high as raw materials like corn starch, PBAT, PBS, PLA etc. used for manufacturing biodegradable packaging have few alternatives and suppliers hold pricing power.
• Threat of new substitutes: The threat of new substitutes is high with continuous innovation in packaging materials and growing environmental awareness among consumers.
• Competitive rivalry: intense due to presence of global players.

SWOT Analysis

• Strength: Biodegradable packaging being environment friendly helps companies comply with regulations and attract environment conscious consumers. It also provides marketing opportunities to promote brands as sustainable.
• Weakness: High production cost of biodegradable packaging compared to conventional plastics hampers widespread adoption. Performance compatibility issues with some packaged products is also a concern.
• Opportunity: Stringent regulations on single use plastics and bans provides huge market opportunities. Growing e-commerce sector also boosts demand for sustainable packaging.
• Threats: Uncertain regulatory framework across regions poses challenges. Economic slowdowns impact packaging industry growth.

Key Takeaways

The global Biodegradable Packaging market is expected to witness high growth, exhibiting CAGR of 20% over the forecast period, due to increasing environmental regulations on single use plastics.

Regional analysis: North America dominates the biodegradable packaging market currently owing to stringent regulations and high consumer awareness. Asia Pacific is expected to grow at fastest pace due to large population, growing e-commerce sector and rising environmental concerns.

Key players operating in the Biodegradable Packaging market are BASF SE, Smurfit Kappa Group, Mondi Group, Rocktenn, Stora Enso, Clearwater Paper Corporation, Amcor, Novamont S.P.A., Kruger Inc., Reynolds Group Holding Limited, and International Corp. BASF SE, Amcor and Smurfit Kappa Group hold major market share.