Containers & Packaging

Containers & Packaging

The Containers & Packaging industry converts raw materials, including metal, plastic, paper, and glass, into semi-finished or finished packaging products. Companies produce a wide range of products, including: corrugated cardboard packaging, food and beverage containers, bottles for household products, aluminium cans, steel drums, and other forms of packaging. Companies in the industry typically function as business-to-business entities and many operate globally.

‍

Source: SASB

The industry is expected to reach a value of USD 358.3 billion by 2028, and companies are focusing on reducing greenhouse gas emissions in operations and supply chains, digitalizing to meet new packaging requirements, and improving plastic waste management. Plastics contribute 3.4% of global greenhouse gas emissions and 36% of all plastics produced are used in packaging, with 85% of them ending up in landfills or oceans. The sector is innovating sustainable packaging and aiming to reduce plastic waste by 80% and greenhouse gas emissions by 20% over the next 20 years, while creating over 700,000 new jobs.

‍

Industry Characteristics

• Mismanaged plastic waste is the main source of macroplastic leakage. In 2019 alone, 22 Mt of plastic materials leaked into the environment. Macroplastics account for 88% of plastic leakage, mainly resulting from inadequate collection and disposal. Microplastics, polymers with a diameter smaller than 5 mm, account for the remaining 12%, coming from a range of sources such as tyre abrasion, brake wear or textile washing. The documented presence of these small particles in freshwater and terrestrial environments, as well as in several food and beverage streams, suggests that microplastics contribute substantially to the exposure of ecosystems and humans to leaked plastics and their related risks. Source: OECD
• The Sustainable Packaging Market was valued approximately USD 265.9 Billion in 2021 and is projected to reach to roughly USD 358.3 Billion by 2028. Source: prnewswire
• In addition to having a sustainable product portfolio, they should accelerate their programs to reduce greenhouse gas emissions both in operations and throughout the supply chain. Source: McKinsey
• Significantly, the packaging industry is facing increasing pressure to digitalize, as recent growth in e-commerce, led by rapid expansion in online grocery sales, creates new packaging requirements. Source: McKinsey

Sustainability Impact

• The carbon footprint of the plastics lifecycle is significant. Plastics have a significant carbon footprint, contributing 3.4% of global greenhouse gas emissions throughout their lifecycle. In 2019, plastics generated 1.8 billion tonnes of greenhouse gas emissions, with 90% coming from their production and conversion from fossil fuels. Closing material loops could reduce this footprint substantially. Source: OECD
• The UNEP estimates that approximately 36 percent of all plastics produced are used in packaging, including single-use plastic products for food and beverage containers, with around 85 percent of them ending up in landfill or finding their way into the world’s oceans. Source: UNEP‍

Sustainability Investments to watch

• Increased online shopping is creating and expanding new avenues of packaging demand, especially for sustainable protective and transport packaging. E-commerce will change the requirements fundamentally: packaging will be specifically tailored to it—designed for efficiency in the supply chain and for unboxing at home rather than for sitting on retail shelves. In the next few years, ship-ready packaging will probably become a must for brand owners to manage cost and sustainability pressures. Source: McKinsey
• Adhering to the “triad of eliminate, innovate and circulate” would also lead to a reduction in plastic waste by 80%, and to a cut of 20% in greenhouse gas emissions over the next two decades, while at the same time generating 700,000 additional jobs, and USD 200 billion in annual savings. Source: Allianz
• Projections suggest that the global bioplastics and biopolymers market size will nearly triple, from USD 10.7 billion in 2021 to USD 29.7 billion by 2026. Source: Allianz