Sustainability in the packaging industry
Sustainability is one of the biggest challenges and one of the biggest opportunities for the packaging industry. Packaging has become an important commodity as all industries actively work to reduce their environmental impact. Driven also by consumer demand, sustainability in the packaging industry means using fewer raw materials, resulting in less waste, and encouraging full recycling. Higher energy costs and raw material prices are impacting the current sustainability target projections of key market players in these industries.
Key issues for the packaging industry
Recyclability of materials
- The biggest problem with packaging is that it turns into waste once the consumer stops using a product. With a constant focus on the circular economy and in order to combat rising raw material prices, especially for aluminium, companies are interested in using packaging materials that can be easily recycled.
- One of the market leaders, Henkel, aims to have 100 percent of its packaging destined for recycling or reuse. The company is also aiming for 100 percent of the paper and cardboard used for packaging to be made from recycled material or, where virgin fibre is required, to source virgin fibre from sustainable forestry by 2025.
- More than 80 percent of marine litter is made up of plastics. With the aim of reducing the use of single-use plastics in the packaging industry, governments are banning them. In EU member states, for example, the use of single-use plastics has been banned since July 2021.
Innovation potential within the packaging industry
Minimalism in packaging
- In 2022, market leaders are turning away from using excessive materials for their packaging and focus on only using materials that serve a specific purpose.
- Recycling closes the loop for a circular economy, but the more complicated the design of the packaging, the less chance it has of being recycled. With mixed material layers used in packaging, recycling becomes an important issue.
- The increasing focus on researching and developing much more efficient, protective, and functional mono-material alternatives in packaging is driving change in the industry and helping companies achieve their sustainability goals.
- With the goal of reducing virgin plastic in packaging, refillable, reusable formats have emerged as an important alternative to current packaging formats.
- The four main subtypes are refill at home, return from home, refill on the go, and return on the go.
Compostable or biodegradable packaging
- Driven mainly by consumer demand, this type of packaging offers ultimate environmental benefits, but currently faces affordability and cost parity issues with other packaging materials.
Future trends for the packaging industry
- Consumers are willing to pay more for sustainable packaging.
- Governments are enforcing strict regulations to reduce the carbon footprint of the packaging industry, focusing in particular on reducing single-use plastics.
- Innovation in new materials is being driven by manufacturers who want to differentiate themselves from the competition, improve their return on investment and meet consumer demands.
Manasi Ghayal, Market Intelligence Junior Expert