October 2024
The global compostable packaging labels market size is booming, poised for a revenue surge into the hundreds of millions from 2023 to 2034, driving a revolution in sustainable transportation.
The demand for compostable packaging labels is rising with the growing need for clear labelling. Key players operating in the market are using various strategies, such as acquisitions, partnerships, and mergers, to develop advanced technology for manufacturing compostable packaging labels, which is expected to drive the global compostable packaging labels market during the forecast period.
The compostable packaging labels basically explain the concept of biodegradable packaging. Compostable packaging labels are markings or certifications that designate a product or its packaging, which is manufactured from materials that can break down into non-toxic components naturally in a composting environment. These types of labels ensure that the materials utilized for manufacturing compostable packaging will decompose within a specific timeframe and contribute to nutrient-rich compost rather than continuing as waste in landfills. The labeling often adheres to specific standards set by organizations that assess the compostability of materials.
The material used for manufacturing compostable packaging labels is usually made from renewable resources like plant-based polymers, paper, polylactic acid, and other biodegradable materials. These materials require specific criteria to be certified as compostable. Different regional organizations have their own certification standards that exist globally to certify compostable materials, such as EN 13432 (Europe), ASTM D6400 (USA), and ISO 17088. The compostable packaging labels reduce landfill waste, educate consumers about eco-friendly choices, and regulate CO2 emissions. The global packaging industry size is estimated to grow from USD 1.20 trillion in 2022 to reach an estimated USD 1.58 trillion by 2032, growing at a 3.16% CAGR between 2023 and 2032.
The rise of e-commerce has led to increased packaging waste, prompting companies to seek sustainable packaging solutions to align with consumer values. As more brands focus on developing sustainable packaging, competition drives innovation and further adoption of compostable materials.
Due to social media and digital marketing, various brands have emerged on online platforms. The emergence of different brands on e-commerce platforms has raised the demand for sustainable packaging. E-commerce platforms promote recycling and composting initiatives, supporting customers in disposing of packaging responsibly and expanding the market for compostable packaging labels.
According to the data published by the eCommerce Association of India (ECAI), a non-profit association, it is estimated that there will be 915.1 million online shoppers in China in 2024, while 270.11 million online buyers in the U.S. By 2024, there will be 2.71 billion internet shoppers globally, meaning that 33% of people shop online, a 2.7% increase from the previous year. By 2025, there will be 2.77 billion online shoppers, reflecting the growth in e-commerce brought about by the ease and expanding use of the internet.
Compostable packaging labels are used in various sectors, including retail, food service, and personal care & cosmetics, due to their versatility and rising acceptance across industries. Big industries are forming partnership agreements with sustainable packaging suppliers and organizations to innovate and promote compostable options, enhancing market reach. Brands are prioritizing transparency in their supply chains and sustainability practices, with compostable packaging being highlighted in marketing to communicate environmental commitment. Increasing adoption of inorganic strategies like partnership and collaboration by the market players to develop compostable packaging labels is estimated to create lucrative opportunities in the market.
According to a news release, kiwifruit marketer Zespri and fruit labeling technology company Sinclair have introduced a novel biodegradable fruit label called MATH'S ARM, which represents a breakthrough in produce packaging and A5 BRAND environmental commitment.
According to the release, the Sinclair-T55 fruit sticker is safely compostable, dissolving and biodegrading entirely without leaving any hazardous residues in the environment, as demonstrated by the home composting certification from ABA and Din Certco and the home and industrial finished products certification from TÜV Austria.
Key players operating in the market face several challenges in passing regulatory norms. The compostable packaging label undergoes various challenging steps to get approval from regulatory bodies. Inconsistent regulations and guidelines regarding compostable materials across different regions have created uncertainty for compostable label producers. The presence of well-established traditional packaging options can make it difficult for compostable alternatives to gain market share.
Europe dominated the global compostable packaging labels market in 2023. This is mainly due to the stringent environmental regulations. Moreover, several initiatives, such as the European Union's Circular Economy Action Plan, which promotes sustainable packaging solutions, contribute to regional market growth.
The 2030 and 2040 minimum recycled content requirements for plastic packaging will remain in place under the interim agreement; however, biodegradable plastic packaging and packaging with less than 5% plastic by weight will not be subject to these goals.
Member states shall make sure that at least 90% of single-use plastic bottles and metal beverage containers are collected separately each year by 2029. In order to meet this goal, these formats must have deposit return systems (DRS) in place.
Asia Pacific is anticipated to grow at the fastest rate in the compostable packaging labels market during the forecast period. Increased investment by the key players operating in the Asia Pacific region to research and develop biodegradable materials fosters innovation and availability of compostable packaging solutions. Many regional companies are adopting sustainability goals, driving the shift toward compostable materials. The key players operating in the Asia Pacific region are focusing on innovating and developing compostable packaging labels, which is estimated to drive the growth of the compostable packaging labels market in the region.
The rectangular labels segment is expected to grow at significant rate in the compostable packaging labels market in 2023. The rectangular shape of the label easily fits any shape container and offers more space for product information as well as space for writing brand details. Rectangular labels can easily fit on various packaging shapes, making them suitable for a wide range of products. Rectangular labels can enhance brand visibility, as their shape allows for eye-catching designs that attract consumer attention.
The PLA segment is expected to expand at the fastest rate in the market during the forecast period. The PLA (polylactic acid) is obtained from the natural source like sugarcane and cornstarch. The labels manufactured using PLA can be printed with various inks and technologies, allowing for high-quality graphics and text in lower cost. These factors make it widely used material for manufacturing compostable packaging labels.
The food and beverages segment dominated the compostable packaging labels market in 2023. This is due to the high usage of compostable labels in the industry. Advances in compostable materials and printing technologies make it easier for the food and beverage industry to implement these labels effectively.
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October 2024
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Asmita Singh is a distinguished author and consultant in the packaging industry, recognized for her unwavering passion for knowledge discovery and her commitment to providing actionable insights. She holds an MBA from the University of Mumbai and a degree in Packaging Engineering from the Indian Institute of Packaging (IIP), equipping her with a solid foundation in both business and technical aspects of packaging. With extensive experience in packaging consulting, Asmita has successfully implemented advanced research methodologies across various packaging categories, including flexible packaging, rigid packaging, sustainable packaging, and smart packaging. She generates high-quality data and delivers meaningful results that drive innovation and efficiency. Her expertise spans the globe, offering valuable consulting services to businesses seeking to enhance their packaging strategies. Asmitas work is characterized by a dedication to excellence and a keen understanding of the latest trends and technologies shaping the future of packaging.