According to a newly-published report by Market Insights, the “green” or sustainable packaging market is currently valued at over $225 billion and is expected to grow at a CAGR of 5.7% over the next five years. That means ~25% of the total global packaging market falls into one of three categories of sustainable packaging: reusable packaging, packaging made from recycled content, and biodegradable packaging.
Consumer demand for sustainable packaging outweighs other pressures
The report found North America to be the largest market for sustainable packaging, noting that “Unlike many regions in the world, where government regulations play a crucial part in the growth of green packaging, high awareness and consumer preferences for eco-friendly solutions are the prime reasons for rapid adoption.” That’s right: North American consumers are driving powerful change by voting with our wallets.
Not surprisingly, consumer demands tend to focus on primary packaging: the boxes, bottles, and pouches we see every day. The impact is tangible to us as we fill up our dumpsters and recycling bins, as packaging makes up 65% of all household trash (Recycling Revolution). Consumers are also willing to put their money where their values are, with 38% of consumers surveyed in The Conference Board© Global Consumer Confidence Survey reporting they would pay more for a more sustainable or sustainably-packaged product (BPA-free, Terracycle certified, compostable, or reusable).
Omnichannel distribution systems are changing in response
As these sources show, consumer awareness of the environmental impact of packaging is driving major changes in the distribution systems of consumer products. As home delivery of everything from food to pharmaceuticals becomes more common, consumers are increasingly aware of the secondary and even tertiary packaging used to deliver these products to their homes and demanding brand owners choose more sustainable solutions.
Initiatives like Loop offer consumers the convenience of home delivery (without a garage filled with empty cardboard boxes) through a familiar solution: reusable packaging. Shoppers order grocery, household, or personal care items from the service, which delivers products to them in reusable containers packed in a reusable tote. When the containers are empty, Loop retrieves, washes, and refills the containers, and no packaging waste has been created. Other companies like LimeLoop and Returnity offer brand owners reusable shipping solutions for clothing and accessories, enabling a waste-free way for their shoppers to order and return products.
Reusable packaging: from the warehouse to your house
Of course, reusable packaging systems are nothing new for these industries. Consumer products companies have used reusable transport packaging in their operations and distribution networks for decades. Today, 35% of all transport packaging globally is reusable, driven mainly by the cost-savings and handling efficiencies offered by reusable transport packaging systems.
Though waste reduction and sustainability have always been a factor for companies switching to reusable transport packaging, what’s new is the consumer’s awareness of these systems, now that they are themselves a part of the cycle. As the Market Insights report rightly suggests, growing demand for reusable consumer packaging will result in greater demand for reusable transport packaging, as the latter becomes more visible to consumers. It will be difficult for consumers to buy into a brand’s sustainable packaging claims when goods are being transported using single-use boxes, crates, and dunnage.
Savvy brand owners, take heed.