In the dynamic Asia Pacific (APAC) region, the eco-friendly packaging market is not just a burgeoning sector poised to reach US$124.36 billion by 2030, but also a crucial battleground where sustainability meets the challenges of rapid economic growth. With a robust growth rate exceeding 12%, APAC’s shift towards sustainable packaging reflects a landscape shaped by heightened awareness and stringent regulations aimed squarely at reducing reliance on single-use plastics.
This trend signifies more than just a market preference; it signals a fundamental shift in consumer values towards supporting products that minimize environmental impact and promote a circular economy.
Consumer preferences, as highlighted by a 2023 McKinsey & Company survey, emphasize a global shift towards sustainable packaging materials. Compostable options, including those derived from plant-based sources like sugar cane and cornstarch, as well as renewable or compostable plastic films, are gaining favor across various countries, the report noted.
As of 2023, the APAC eco-friendly packaging market stood at US$67.69 billion, predominantly driven by the food and beverages (F&B) sector.
However, alongside this promising growth, the surge in packaging usage in APAC presents significant environmental challenges. Inadequate waste management and recycling infrastructures allow substantial amounts of packaging materials to leak into natural ecosystems, posing threats to biodiversity and environmental health.
To address these challenges, continuous innovation in sustainable packaging materials is paramount. Businesses across the region are increasingly adopting eco-friendly technologies such as plant-based plastics, mushroom-derived packaging, and high-recycled-content products.
Moreover, the scale of packaging demand, particularly evident in markets like China, where packaging volumes reached 912.9 billion units in 2023, underscores the urgency for comprehensive solutions. Balancing market dynamics with environmental stewardship requires a holistic approach. This encompasses fostering innovation in materials, strengthening regulatory frameworks, and promoting corporate responsibility initiatives that prioritize sustainability.
Addressing Plastic Waste: Challenges and Solutions
The Asia-Pacific region has the highest concentration of megacities globally, with 28 cities exceeding 10 million inhabitants as of January 2023. However, this demographic concentration brings significant environmental concerns. High population densities intensify pressures on resources, waste management systems, and overall environmental sustainability. The rapid urbanization accompanying this population growth has markedly spiked consumption levels, particularly in the demand for single-use packaging, especially flexible plastics.
Packaging plays a critical role in the food industry, ensuring product safety and quality throughout their lifecycle, particularly vital in the Asia Pacific region where foodborne illnesses are a significant concern, making food safety a top priority for businesses.
In these markets, multi-layer plastics are crucial for extending food shelf life with their superior barrier properties against moisture, oxygen, and contaminants. They significantly reduce food waste in regions with less efficient distribution systems and lessen dependence on cold chain logistics by maintaining food quality without continuous refrigeration.
The food industry in the Asia-Pacific region is undergoing a notable transformation, increasingly prioritizing sustainability alongside functionality. However, recycling faces significant hurdles here, including inadequate infrastructure, high costs, and regulatory disparities. In response, companies are launching a range of initiatives to address these issues, such as transitioning to paper-based packaging. Paper holds a significant share in China’s packaging market, especially in food packaging, ensuring food protection, storage convenience, and effective communication of consumer information and marketing messages.
Innovative Packaging Solutions
Companies are also embracing innovative solutions and collaborative platforms to reduce the environmental impact of packaging materials. For instance, Japan’s Toyo-Morton has introduced food-safe, epoxy silane-free laminating adhesives to enhance the safety and recyclability of flexible packaging. These innovations aim to preserve the protective qualities of multi-layer packaging while promoting environmental sustainability.
Initiatives such as Dow’s Pack Studios, operated by the US chemical company Dow in Shanghai, Mumbai, and Singapore, facilitate collaboration across the packaging value chain to innovate sustainable packaging solutions. These platforms leverage technological advancements to develop recyclable and high-performance packaging, thereby promoting a circular economy.
The F&B industry in APAC is embracing sustainable packaging materials and techniques that not only reduce reliance on fossil fuels but also offer compostable alternatives.
PepsiCo, for instance, is actively involved in developing advanced packaging solutions through initiatives like co-founding the Composting Consortium, led by Closed Loop Partners (CLP). This endeavor aims to set industry standards for compostable packaging, test composting technologies, and advocate for environmental factors that support sector growth, fostering greater investment in sustainable packaging.
In 2023, PepsiCo achieved a significant milestone by incorporating 10% recycled content in plastic packaging. Products in over 30 markets now feature 100% recycled PET (excluding caps and labels). PepsiCo is also advancing towards biodegradable and compostable materials, with 89% of their packaging designed to be recyclable, compostable, biodegradable, or reusable. They aim to increase this figure to 98% by 2025, underscoring their commitment to sustainable packaging practices.
To fully embrace sustainability, a circular approach is essential. This involves evaluating the entire lifecycle of packaging, from the extraction of raw materials to its eventual disposal. By integrating practices like down-gauging into their operations, businesses can significantly lower their environmental footprint.
Down-gauging involves reducing the thickness or gauge of materials like plastic film or packaging while maintaining or improving their performance. This approach achieves cost savings, reduces material usage, and enhances sustainability by conserving resources without sacrificing product quality or functionality.
Plant-based packaging utilizes materials sourced from sustainably cultivated plants, reducing dependence on non-renewable hydrocarbon sources. For example, mushroom packaging is made from mycelium—the root structure of mushrooms. Known for its biodegradability and compostability, mushroom packaging has gained rapid adoption across diverse industries.
In 2023, the Asia-Pacific mycelium market (excluding China) was valued at US$300 million and is projected to reach about US$500 million by 2028, growing at a CAGR of over 10%. This growth is driven largely by increasing demand for sustainable materials. While still in its nascent stages, the APAC mycelium market holds promise, particularly in sectors such as food and beverage, e-commerce, and cosmetics.
Reports emphasize that investments in research and development are essential for realizing the full potential of mycelium-based solutions, presenting substantial opportunities in the evolving packaging market.
Government Regulations: Priorities and Expectations
In APAC, there’s a growing focus on addressing waste management issues and promoting environmental responsibility through government regulations. Thailand, for example, released the draft of the Sustainable Packaging Management Act for public in March 2024, aimed at regulating the sustainable handling of key packaging materials such as glass, metal, paper, plastic, and composite materials from design to disposal. Additionally, Thailand plans to ban plastic waste imports entirely by 2025, signaling a strong commitment to reducing environmental impact.
Similarly, other countries in the region, such as Malaysia and Vietnam, have implemented policies to promote a circular economy by targeting reductions in single-use plastics and promoting recycling efforts. Malaysia’s initiatives under its Twelfth Plan for 2021 to 2025 and Roadmap Towards Zero Single-Use Plastics 2018-2030 emphasize the adoption of biodegradable and compostable alternatives and discourage the use of single-use plastics at public venues.
Despite these advancements, challenges persist, particularly concerning the higher costs associated with eco-friendly materials, which can deter adoption among small and medium enterprises. Transitioning to sustainable packaging also requires investments in new manufacturing techniques, marketing and consumer education to encourage eco-friendly choices. A recent Kantar study underscores that while a significant percentage of consumers express interest in purchasing green products, actual adoption rates remain low.
To effectively promote sustainable practices, governments must enforce stringent regulations that support infrastructure development for waste collection and recycling. This involves not only setting ambitious targets, such as Vietnam’s Extended Producer Responsibility rules aiming for an 80% reduction in landfill waste by 2025 but also ensuring adequate support for businesses to transition towards sustainable practices.
Collaboration among policymakers, businesses, and governmental departments is crucial for countries to enact comprehensive green policies and secure blended finance—a mix of public and private funding—for sustainable initiatives.
Fostering a Sustainable Ecosystem
Building a resilient network is vital. PepsiCo’s Greenhouse Accelerator: APAC Sustainability Edition exemplifies this commitment, now in its second year, supporting startups dedicated to sustainable agriculture, climate action, and the circular economy.
For instance, Vietnam’s HRK Group, part of PepsiCo’s 2023 Greenhouse Accelerator, tackles plastic pollution at its source. They have innovated waterproof paper food packaging that is not only 100% biodegradable and recyclable but also boasts exceptional barrier properties.
Moreover, HRK explores converting potato starch from PepsiCo’s potato chip production into secondary packaging, refining processes to reduce moisture content and enhance sustainability.
Similarly, Coast 4C, a venture-backed startup from the Philippines, focuses on combatting ocean plastic pollution by introducing seaweed-based products as biodegradable alternatives to traditional plastic packaging.
Internally, PepsiCo drives a circular economy for plastic, with 89% of global packaging in 2023 being recyclable, compostable, biodegradable, or reusable (RCBR). They’ve integrated 10% recycled plastic into global plastic packaging across their owned and franchise beverage operations. Over 30 markets now offer products in 100% rPET packaging (excluding caps and labels), with plans for 98% RCBR packaging by 2025 and enhanced recycling rates in key markets.
The journey to sustainable packaging in the F&B industry is complex yet indispensable. The benefits—environmental, economic, and social—are clearly visible, but progress demands collective effort and creativity.
APAC finds itself at the forefront of this transformative journey, offering distinct challenges and opportunities.Governments must enforce regulations that promote sustainable practices and infrastructure. Meanwhile, businesses, large and small, should prioritize investments in research and innovation. Consumers also play a pivotal role, influencing the market by making informed choices and supporting brands committed to sustainability.
Are we prepared to lead the way?
Call to action: Join the sustainability movement today! Become a part of PepsiCo’s Greenhouse Accelerator program and help shape a greener future together.
To learn more and join the movement, visit greenhouseaccelerator.com/apac/
