The biodegradable packaging market has seen significant growth in recent years owing to the inherent advantages it provides over conventional plastic packaging solutions. Biodegradable packaging materials are manufactured from plants and other organic materials which makes them eco-friendly and sustainable. They can decompose completely and break down into natural elements like carbon dioxide, water, and biomass within a short timeframe. Products in the biodegradable packaging portfolio include bags, pouches, films, and other such materials made from polylactic acid (PLA), starch, cellulose, and other plant-based polymers. These materials offer properties comparable to plastic packaging while ensuring the packaged products decompose harmlessly without polluting the environment after disposal.

The global biodegradable packaging market is estimated to be valued at US$ 37,919.7 Mn in 2024 and is expected to exhibit a CAGR of 20% over the forecast period 2023 to 2030.

Key Takeaways

Key players: Key players operating in the biodegradable packaging 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 is a leading manufacturer of PLA materials for biodegradable packaging solutions. Smurfit Kappa Group provides paper-based packaging products made from sustainable materials.

Growing demand: Strict government regulations regarding single-use plastic waste and bans have fuelled demand for eco-friendly alternatives like biodegradable packaging materials from various end-use industries.

Global expansion: Leading packaging companies are expanding their biodegradable packaging product portfolios and setting up new manufacturing plants globally to tap growing demand in international markets like Europe and Asia Pacific.

Market key trends

Sustainable packaging is a major trend being witnessed in the biodegradable packaging market. Manufacturers are focusing on developing truly sustainable and circular solutions made from renewable resources through innovative technologies. Cellulose fibers, plant-based resins, and bio-inspired materials that can be recycled or composted after use are gaining popularity. This type of sustainable and circular packaging ensures minimal environmental impact.

Porter’s Analysis

Threat of new entrants: High initial investments limit new players to enter the market.

Bargaining power of buyers: Large number of buyers in fragmented market increase their bargaining power.

Bargaining power of suppliers: Supply of raw materials concentrated among few vendors increases their bargaining power.

Threat of new substitutes: Low as biodegradable packaging has limited substitutes.

Competitive rivalry: Intense competition among existing players to gain market share induces price wars.

The geographical region where the biodegradable packaging market in terms of value is concentrated is North America. North America accounts for the largest share in the global biodegradable packaging market in 2023. Strong consumer preference and regulatory support for sustainable packaging in countries like United States and Canada have fostered market growth.

The fastest growing region for the biodegradable packaging market is Asia Pacific. With rapid industrialization and growing focus on waste reduction, the demand for biodegradable packaging is increasing at the fastest pace in developing economies of China and India. Favorable government initiatives and awareness about environmental issues are some key factors driving the market in Asia Pacific region.