Global eco-friendly food packaging market set for rapid growth as demand for sustainable solutions rises

Demand for biodegradable, recyclable and compostable packaging is surging as food and beverage brands seek sustainable alternatives to single-use plastics.

The global eco-friendly food packaging market is on track for substantial growth over the next decade, fuelled by heightened environmental awareness, regulatory pressure, and consumer demand for sustainable alternatives. According to a new report by Fact.MR, the market is forecast to expand at a compound annual growth rate (CAGR) of 7.2 percent from 2022 to 2032, with its value expected to double from US$190 billion to US$380 billion by the end of the period.

Growing appetite for sustainable food packaging

Sustainable food packaging spans a wide range of materials designed to reduce environmental impact, including biodegradable, compostable, recyclable, and reusable options. These solutions are increasingly being adopted across the restaurant, catering, and food delivery sectors, as businesses strive to balance convenience with eco-conscious practices.

Rising public concern about climate change and plastic pollution continues to shape purchasing habits. Consumers are increasingly choosing products that use packaging made from recycled paper, plant-based plastics, and biodegradable polymers, pushing food and beverage manufacturers to innovate.

Key drivers behind market growth

• Several forces are propelling the expansion of the eco-friendly packaging industry:
• Environmental awareness: Consumers and food brands alike are embracing circular economy principles, driving a shift away from single-use plastics.
• Food delivery boom: The rapid expansion of on-demand and takeaway food services has accelerated the need for packaging that offers both sustainability and performance.
• Government regulations: Global initiatives to ban or reduce plastic waste are compelling businesses to transition to greener alternatives.
• Technological innovation: Developments in biodegradable films, renewable coatings, and smart packaging are enhancing shelf life and food safety while supporting sustainability goals.

Regional insights

The report identifies North America as a leading market, supported by strong environmental policies and consumer spending in the United States. East Asia is poised for significant growth by 2035, with local manufacturing capacity and an expanding foodservice sector driving adoption. Meanwhile, Southeast Asia, Central and South America, and Australia are showing consistent progress as regional companies invest in locally adapted sustainable solutions.

Competitive landscape

The eco-friendly food packaging market is highly competitive, with key players focusing on innovation and strategic partnerships. Leading companies include Amcor plc, Mondi plc, Pactiv Evergreen Inc., Huhtamäki Oyj, Smurfit Kappa Group plc, BASF SE, Berry Global, Crown Holdings, and Tetra Pak, among others.

Manufacturers are investing heavily in biodegradable materials and compostable designs that meet both performance and cost-efficiency needs. Global anti-plastic campaigns are also creating new commercial opportunities for suppliers targeting eco-conscious consumers.

Industry developments

• In 2021, Amcor launched a recyclable chocolate packaging line made from eco-friendly plastics, highlighting the sector’s shift toward sustainable innovation.
• Other packaging leaders are focusing on renewable materials and closed-loop systems, designed to minimise waste and maximise recyclability.

With sustainability now central to brand identity and consumer trust, the eco-friendly food packaging sector offers vast potential for food and beverage manufacturers. Those that successfully combine environmental responsibility with product safety, functionality, and convenience are expected to lead the market in the coming decade.

Insights based on the “Eco-friendly Food Packaging Market” report by Fact.MR.