Compostable Packaging Labels Market Size to Boost in Coming Years

Compostable Packaging Labels Market Size and Global Growth Insights

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.

Major Key Insights of the Market

• Europe dominated the Compostable Packaging Labels Market in 2023.
• Asia Pacific is expected to grow at a significant rate in the market during the forecast period.
• By type, rectangular labels segment is expected to grow at significant rate during the forecast period.
• By material, the PLA segment is expected to grow at the fastest rate in the market during the forecast period 2024 to 2034.
• By application, the food and beverage segment dominated the compostable packaging labels market in 2023.

Compostable Packaging Labels Market: Biodegradable Labels

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.

7 Key Factors Driving the Compostable Packaging Labels Market Growth

• Key players operating in the market are focusing on geographic expansion and launching their own brand in other countries, which is expected to drive the growth of the compostable packaging labels market in the near future.
• Increasing focus on cost reduction and production efficiency can drive the market growth further.
• Emerging markets and trends for compostable packaging labels is expected to drive the growth of the global compostable packaging labels market over the forecast period.
• Increasing regulatory support is estimated to drive the growth of the market over the forecast period.
• Increasing adoption of advanced technologies for producing compostable packaging labels is expected to drive the growth of the global compostable packaging labels market in the coming years.
• Government bodies are implementing stricter regulations on single-use plastics and promoting biodegradable materials. Policies and incentives for using compostable packaging labels support market growth.
• Increasing awareness among consumer regarding environmental issues and the impact of plastic waste is main reason behind higher demand for sustainable packaging options, which is projected to drive the growth of the compostable packaging labels market.

Driver

Growth of E-commerce Platform

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.            

Market Trends

• Growing Demand for Sustainable Solutions: Businesses and consumers are increasingly preferring sustainable and eco-friendly packaging options, which boost the demand for compostable materials across various industries. Consumers and brands are prioritizing renewable and biodegradable packaging solutions, driving the demand for compostable packaging labels.
• Expansion of Certification Standards: Establishing more comprehensive and recognizable certification standards for compostable materials is gaining traction, helping to build consumer trust and streamline market offerings.
• For instance, on October 7, 2024, UPM Raflatac, a company focused on supplying label materials for branding purposes, introduced the new Packaging Recyclability Guide for labels used in the FMCG sector. The new guide from UPM Raflatac addresses the issue of packaging recyclability and makes it easier for packaging designers, brand owners, and label printers to understand. It demonstrates how choosing the appropriate label material is essential to improving a package's circularity. It also describes how companies can avoid or lower Extended Producer Responsibility (EPR) fines by designing for recyclable materials, which makes the transition to recyclable materials an even more alluring option. The SmartCircle label materials that are recyclable in various recycling streams are listed in the UPM Raflatac Packaging Recyclability Guide, which also provides guidance on how to make choices that comply with the most recent regulations.
• Circular Economy Practices: There is a growing emphasis on circular economy principles, where compostable packaging is seen as a key component of waste reduction and resource efficiency strategies.

Market Opportunity

Adoption of Inorganic Growth Strategies & Approval from Regulatory Bodies

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.

• For instance, in October 2024, Sinclair Systems International LLC, a company that provides food-safe vegetable and fruit labels in various size range, join forces and signed partnership agreement with Zespri International Limited, largest kiwifruit supplier, to develop and introduce new compostable fruit label.

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.

Market Challenge

Market Competition & Performance Limitations

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.

Regional Insights

Europe’s Regulatory Framework to Support Dominance

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.

• For instance, in March 2024, the European Union, a supranational political and economic union based in Europe, in a temporary agreement, the European Union promised to "boost the circular economy" and "tackle packaging waste." In order to address the rise in packaging waste produced in the EU, the European Union announced that it had obtained a "provisional political agreement" on a proposal for a regulation that would "harmonize the internal market for packaging and boost the circular economy."

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’s Sustainability Initiatives to Support Rapid Growth

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.

• For instance, in October 2023, Pakka Limited, formerly known as Yash Pakka Limited, a company providing regenerative packaging solutions headquartered in India, revealed the launch of the compostable packaging labels for Brawny Bear, a nutrition company.

Market Segments

Rectangular Labels Segment to Grow Rapidly

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.

PLA Segment to Register Fastest Growth

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.

Food and Beverages Segment Led the Market in 2023

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.

New Advancements in Compostable Packaging Labels Industry

• In May 2024, GSL, a company providing labeling for the healthcare sector, revealed Naturetag, a certified environment-friendly label. Since the Naturetag label is biodegradable, consumers can leave it on produce skins when discarding them, and it will decompose at the same pace as the produce skin, leaving no toxic waste in the soil or environment. The label breaks down into composts that can be used in a year.
• In January 2023, Avery Dennison Corporation, a multinational manufacturer and distributor of pressure-sensitive adhesive materials, expanded its product portfolio by introducing the thermal printable paper BX624, which has a protective coating on the backside and top. 
• In October 2024, The Parkside Company, an innovative packaging company, entered into a partnership with Dark Woods Coffee, a coffee brand company, to innovate and develop a compostable coffee pouch with compostable packaging labels on it for branding purposes.

Compostable Packaging Labels Market Companies

• Avery Dennison
• Novamont
• NatureWorks
• Elevate Packaging
• UPM Raflatac
• HERMA
• Polycart
• Futamura
• Vegware
• Labelcraft
• Fedrigoni Self-Adhesives
• NADCO Tapes & Labels
• Optimum Group
• Multi-Action
• Bio4life
• NCCO
• GREEN LABEL
• Better Packaging
• RGS Labels
• Noissue
• Hero Packaging
• BioPack
• RooCreate
• Berkshire Labels
• Weifang Xinxing Label Products

Compostable Packaging Labels Market Segments

By Type

• Rectangular Labels
• Square Labels
• Circular Labels

By Material

• PLA
• Cellulose
• Bamboo
• Wood
• PHA

By Application

• Food and Beverage
• Personal Care and Cosmetics
• Others

By Region

• North America
  • U.S.
  • Canada
• Europe
  • Germany
  • UK
  • France
  • Italy
  • Spain
  • Sweden
  • Denmark
  • Norway
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Thailand
• Latin America
  • Brazil
  • Mexico
  • Argentina
• Middle East and Africa (MEA)
  • South Africa
  • UAE
  • Saudi Arabia
  • Kuwait