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Sustainable Packaging

Can the long-term benefits of sustainable packaging negate the initial cost of choosing it?

Nearly 43% of brands consider cost as a major barrier in their transition to sustainable packaging. It's reasonable to examine the immediate financial consequences of switching to more sustainable packaging. However, choosing sustainable packaging is not expensive, since its cost is outweighed by long-term gains, including better customer loyalty, adherence to regulation, and reduced waste. Managing the waste can cost a business around 4% to 10% of its annual revenue. Furthermore, people are getting more inclined towards sustainability. In response to the public’s outrage government is proactively implementing laws, hefty fines, and launching acts for the use of non-sustainable materials. All these factors are prompting companies to integrate sustainability into their packaging. Besides this, higher adoption of sustainable packaging will be the ultimate solution for increasing its affordability. As the demand for sustainable packaging increases, manufacturers can achieve economies of scale in production. Larger production volumes will lead to lower per-unit costs, which will reduce the overall cost.

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What is Sustainable Packaging

Sustainable packaging refers to the creation, production, and utilization of packaging materials and solutions that have a low environmental effect over time. It aims to reduce the negative environmental and social effects associated with packaging, including resource depletion, pollution, and waste generation. When comes to opting for sustainable packaging, various factors are taken into consideration, such as material selection, packaging design, social considerations, and others. Sustainable packaging is an inclusive strategy that incorporates cooperation among packaging makers, brand owners, retailers, consumers, and government agencies in order to drive change and promote more ecologically friendly packaging practices.

Sustainability has become a critical factor in brand reputation and consumer loyalty. In the United States, South America, and Europe, around 74% of consumers are willing to pay more for the products that are provided in sustainable packaging, and nearly a quarter agree to pay a 10% or higher price increase. Companies that prioritize sustainability and adopt sustainable packaging strategies, such as flexible packaging are often viewed more favorably by consumers. Brands that align with consumer values and demonstrate a commitment to environmental responsivity are more likely to attract and retain customers. As a result, businesses are incorporating sustainable packaging as part of their corporate social responsibility efforts and marketing strategies. Our analysis shows that over a third of the consumers globally were purchasing products basis on the effects reflected by the environment that they stay in and also on their other social aspects.

The sustainable packaging landscape is been shaped by various factors:

  • Minimalism and Simplicity- There is a growing emphasis on minimalist packaging designs that prioritize simplicity and reduction of materials.
  • Plant-Based and Renewable Plastics- Plant-based plastics, are biodegradable plastics including polylactic acid (PLA), derived from sources like corn start or sugarcane, which are being used as alternatives to conventional petroleum-based plastics.
  • Packing Innovation- Innovative packaging solutions, such as water-soluble films, edible packaging, and nanotechnology-based barrier coatings, are being driven by technological developments.

Top Alternatives for Traditional Packaging

  • Composting Packaging – Compostable packaging is becoming a more popular alternative. It protects food products similarly to traditional packaging, exhibiting the qualities and sturdiness of traditional materials, yet it completely degrades the ground into helpful organic compost.
  • Mushroom Packaging- It is made by mixing all the ground agricultural waste and holding it together with mushroom roots, also known as mycelium. It can be easily made at home, and support small businesses in achieving their sustainable goals.
  • Recycled Paper and Cardboard- One cardboard box decrease oil and carbon dioxide emissions by 60% when compared to alternative materials, notably plastic. Further, cardboard and paper are 100% biodegradable and can be recycled 5 to 7 times.
  • Glass- If done properly, then the glass is a highly recyclable and reusable material commonly used in packaging for beverages, cosmetics, and food products. It is non-reactive and does not leach any harmful chemicals into the ground.
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Some Initiatives that are Boosting the

Adoption of Sustainable Packaging

  • United Nations launch an SDG program in 2015, that encompasses 17 sustainable development goals. Out of which, one aims to fully introduce sustainable packaging by 2030, and also reduce the use of PET material bottles by around 35%.
  • Extended Producer Responsibility (EPR) programs imposed on producers to bear the cost of managing and paying for garbage collection, recycling, and safe disposal. This program promotes companies and brands to create and use more recyclable packaging, and recycled materials, as well as contribute to sustainable waste management systems.
  • Deposit Return Systems (DRS) introduce a way where consumers can get paid for depositing a beverage container that can be recycled. It has been implemented in many countries, including Sweden, Germany, and several parts of the United States.

Research Nester Market Analysis on

Sustainable Packaging

The report from Research Nester indicated that the global sustainable packaging market is expected to be valued at around USD 412 Billion by the end of 2027 by expanding at a CAGR of 6.23% between 2020 and 2027. The market is strengthened by major players that are contributing to sustainable packaging. Sappi Limited, BASF SE, International Paper Company, Amcor Limited, DS Smith, Tetra Pak International S.A., Transcontinental Inc., Mondi PLC, Bemis Company, and Smurfit Kappa Group Plc, and some key players in the market.


Corporate Social Responsibility Taken up by

Big Brands for Implementing Sustainability

  • The Coca-Cola Company launched World Without Waste program in 2018. The main goals of this program were to develop 100% recyclable packaging by 2023 and use no less than 50% of recycled material in their packaging.
  • Amazon.com, Inc. has introduced Frustration-Free Packaging (FFP) programs, in which around 2 million products were packaged in sustainable material in 2021. Moreover, in the United States, flexible plastic packaging was boosted.
  • Astellas Pharma, Eisai, Daiichi Sankyo, and Takeda announced an agreement to promote the use of environmentally conscious pharmaceutical packaging and minimize the environmental burden in the pharmaceutical packaging industry.

Countries’ Outlook on the Packaging

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    NORTH AMERICA

  • The United States Environmental Protection Agency (EPA) launched a Draft National Strategy to reduce plastic pollution, this draft is built upon the National Recycling Strategy. It aims at finding new and innovative ways to reduce, replace and recover the use of plastic in packaging. The EPA outlined the approach of circular economy, and improve the capacity of the United States to reuse and refill the products.
  • In the 16 states of the United States, the regulation associated with packaging waste has been enacted, which aims at preventing the use of single-use plastics, and shopping bags, while boosting the goals for recycling. This enactment is to be followed by several other bills in the next 3 years.
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    ASIA PACIFIC

  • National and state-level government has banned the use of single-use plastic items from 1st July 2022. The control room is to be set up for identifying any illegal import, manufacture, stocking, and sale of such items.
  • In Japan, the DIC Corporation has added new initiatives to 3r of circular economy to bring the perspective of 5R. The powerful 5R stands for reuse, reduce, recycle, redesign, and reduce CO2
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    EUROPE

  • As of January 2023, the number of UK customers demanding environmentally friendly packaging had climbed to 81%.
  • The European Union (EU) implemented a charge on non-recycled plastic packaging trash produced by each EU member state (Member State) on January 1, 2021. The tax is set to go into effect on January 1, 2024. Costing USD 0.49 plastic costs per kilogram.
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    LATIN AMERICA

  • In Latin America and the Caribbean Sea, 27 out of 33 countries have implemented national or local legislation to reduce, restrict, or eliminate single-use plastics.

In Conclusion

There is a panic all over the world caused by climate change and ozone layer depletion, sustainability has increased steadily. The use of sustainable materials has become popular in recent years and there are still many unexplored opportunities in the field. The consumer is making more conscious choices while buying a product. Also, economic development sustainable packaging has begun to gain prominence in places such as China and India, and it is already popular in industrialized countries. Sustainable packaging has become the new USP for businesses, which has increased the adoption of environmentally friendly packaging. It will also contribute to the mass production of sustainable materials which will further reduce the cost of items. Sustainability has always been labeled as a luxury but in the foreseeable time, mass production will help in achieving affordability.

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swara-keni
Swara Keni

Head- Global Business Development

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