Compostable Foodservice Packaging Market Size, Trends [2031]

Report Description

Compostable Foodservice Packaging Market Outlook 2031

The global compostable foodservice packaging market size was USD 18 Billion in 2022 and is likely to reach USD 26.5 Billion by 2031, expanding at a CAGR of 4.4% during 2023–2031. The market growth is attributed to the increasing awareness and concerns about environmental issues.

Rising manufacturers focus on sustainable packaging solutions is anticipated to significantly boost the growth of the compostable foodservice packaging market. Growing concern over the environmental impact of plastic pollution, especially in oceans and waterways boosts the awareness of compostable packaging solutions to mitigate the negative effects of plastic waste on ecosystems.

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Surging demand for ready-to-eat and on-the-go food products is driving the compostable foodservice packaging market growth. Ongoing advancements in material science and packaging technology led to the development of high-performance compostable materials. These materials offer durability and functionality to meet the requirements of foodservice industry.

The market report finds that the COVID-19 pandemic affected the compostable foodservice packaging market. The pandemic caused disruptions in global supply chains, which affected the production and distribution of various products. Lockdowns, restrictions, and closures of restaurants and cafes have led to the decline in the demand for foodservice packaging. During and post-pandemic, changes in consumer behavior led to a surge in food delivery and takeout services. This shift increased the demand for foodservice packaging, including compostable options.

• As per a report published in October 2021, the total or partial closure of food establishments for indoor services helped an increased demand by about 15% for delivery services which contributed to an intensified use of single-use plastics (SUPs).

Impact of Artificial Intelligence (AI) on the Compostable Foodservice Packaging Market

Artificial Intelligence (AI) is expected to boost the revenue of the market players present in the compostable foodservice packaging market. This technology is applied to optimize supply chain processes, which improves efficiency and reduces waste. AI technologies such as sensors and RFID (Radio-Frequency Identification) are integrated into the packaging to provide real-time data on product freshness and quality. This reduces food waste and enhances the overall sustainability of the packaging.

Compostable Foodservice Packaging Market Dynamics

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Major Drivers

Rising demand for sustainable solutions drives the market. Consumers are actively seeking products and services that align with their commitment to a greener planet, due to the increasing number of alarming reports of plastic pollution, deforestation, and climate change. Compostable packaging, characterized by its biodegradable nature and minimal environmental impact, is a sustainable solution for eco-conscious consumers. This encourages manufacturers to develop sustainable packaging solutions.

• In March 2021, Eco-Products revealed that one of its Vanguard clamshells received CMA-W approval from the Compost Manufacturing Alliance (CMA). This became the first molded fiber item without added PFAS to receive CMA approval, further emphasizing its commitment to producing environmentally friendly and compostable packaging solutions.

Existing Restraints

Lack of composting infrastructure hampers the market. Consumers and businesses have limited options for disposing of compostable packaging without adequate composting facilities. These materials end up in regular waste streams in the absence of specialized composting bins or collection systems, leading to landfill disposal or incineration.

Emerging Opportunities

Technological advancements create lucrative opportunities in the market. Advanced technologies such as the Internet of Things (IoT) and blockchain are utilized to optimize the supply chain of compostable packaging materials. This includes tracking the sourcing of raw materials, monitoring the manufacturing process, and ensuring the efficient distribution of products to reduce waste and enhance overall sustainability.

Scope of the Compostable Foodservice Packaging Market Report

The market report includes an assessment of the market trends, segments, and regional markets. Overview and dynamics have also been included in the report.

Market Segment Insights

Packaging Type Segment Analysis

Based on packaging type, the compostable foodservice packaging market is divided into plates & cups, bowl, trays, pouches, cutlery, and clamshell. The plates & cups segment is expected to hold a dominant share of the market during the projection period, due to a shift in consumer preferences.

Plates & cups are essential and frequently used items in the foodservice industry. Consumers are increasingly prioritizing sustainability, which leads to the growing demand for compostable alternatives to traditional disposable plates and cups made from non-biodegradable materials. Additionally, the foodservice industry, including restaurants, cafes, and catering services, is recognizing the importance of adopting sustainable practices. Compostable plates and cups align with these sustainability goals and appeal to environmentally conscious consumers.

The bowl segment is anticipated to expand at a significant pace in the market, as it provides versatility in food services. Bowls are versatile containers that are widely used for serving a variety of dishes, including soups and salads. Their frequent use across different cuisines and meal types makes them a crucial component in the foodservice industry. Growing consumer awareness and demand for sustainable and eco-friendly food packaging options encourage manufacturers to develop recyclable product options.

• In February 2022, Stora Enso collaborated with Picadeli, a key takeaway salad bar company, to launch renewable molded fiber lids. These lids, which are recyclable, biodegradable, and entirely free of plastic, aim to replace single-use plastics in take-away packaging.

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Material Segment Analysis

On the basis of material, the global market is segregated into paper & paperboard, bagasse & seaweed, and plastic. The paper & paperboard segment is projected to expand at a high CAGR during the forecast period, due to the biodegradability & compostability of paper and changing consumer preference for paper-based packaging.

Paper and paperboard are characteristically biodegradable and compostable materials. These materials break down naturally in composting conditions, which makes them an environmentally friendly choice for foodservice packaging. Growing consumer preference for paper-based packaging, due to its perception as a renewable and sustainable resource, encourages manufacturers to develop novel packaging solutions. For instance,

• In April 2022, WestRock Company partnered with Swiss Chalet to introduce recyclable paperboard packaging across restaurant chains in Canada.

End-user Segment Analysis

Based on end-user, the compostable foodservice packaging market is segmented into cafe, restaurants, and delivery services. The delivery services segment is anticipated to register robust growth during the forecast period, due to rising food delivery and takeout services.

The growing popularity of food delivery and takeout services, especially in urban areas, led to an increased demand for packaging solutions that align with sustainability goals. Delivery services often leverage their commitment to sustainability as a key element of their branding and marketing strategies. Using compostable foodservice packaging allows these services to differentiate themselves as environmentally responsible and attract eco-conscious consumers.

The restaurants segment is expected to hold a significant share of the market, owing to increasing consumer demand for sustainable practices. Consumers are increasingly concerned about the environmental impact of their choices, including the packaging used by restaurants. Many consumers actively seek out restaurants that are committed to sustainability. The use of compostable foodservice packaging aligns with this demand.

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Regional Outlook

In terms of region, the global compostable foodservice packaging market is classified as Asia Pacific, North America, Latin America, Europe, and the Middle East & Africa. North America is expected to dominate the market during the projection period, due to growing environmental awareness among individuals and stringent environmental regulations.

North America has been proactive in implementing environmental regulations and standards. Governments at federal, state, and local levels have introduced policies to promote sustainable practices, including the use of compostable packaging. This regulatory environment encourages businesses to adopt eco-friendly solutions. Furthermore, increasing awareness of environmental issues among consumers in North America encourage them to actively seek out products and services aligned with sustainable practices.

• In September 2021, Berry Global announced an expansion of its foodservice manufacturing operations in North America, focusing on providing sustainable foodservice packaging solutions.

The market in Asia Pacific is projected to grow rapidly during the forecast period, owing to rising urbanization and rising innovation in packaging materials. Asia Pacific has a large and rapidly growing population, particularly in urban areas. The increased urbanization led to high demand for convenient and environmentally friendly food packaging options, driving the adoption of compostable foodservice packaging. Furthermore, ongoing innovations in packaging materials and technology in Asia Pacific contribute to the development of high-quality compostable packaging options.

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