U.S. Compostable Foodservice Packaging Market is anticipated to reach US$ 4.6 billion in the year 2029

The global sales of compostable foodservice packaging is estimated at US$ 19.9 Bn in 2022 and is projected to reach US$ 28.8 Bn by 2029, with a  CAGR of 5.5% between 2022 to 2029.

Future Market Insights, in its new offering, outlines the growth trails of the compostable foodservice packaging market for the period 2019 and 2029. According to the report, worldwide sales of compostable foodservice packaging reached approximately 6,400 thousand tons in 2018, equaling revenues worth US$ 16.7 Billion. As end users’ quest for sustainable packaging intensifies, manufacturers are likely to witness a period of sustained demand in the future.

Expansion of foodservice industry, along with the emergence of ‘takeaway’ and ‘grab-and-go’ services will continue to provide potential growth prospects of the market. However, the price of producing compostable materials for packaging continues to be higher than the conventional variants which is likely to represent a threat to the growth of the compostable foodservice packaging market.

 With plastics becoming one of the biggest challenges in the world right now, brands prolifically using such materials will need to act quickly to find reliable alternatives. Technological innovations are being made to reduce the price of compostable foodservice packaging, and FMI’s study assesses that the global efforts to become a more sustainable society will be instrumental in creating new growth opportunities for the market vendors.

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Trays Continue to Gain Preference Over Other Packaging Format

According to the study, the composite foodservice packaging market is estimated to grow at a CAGR of approximately 5% through 2029. One of the key growth drivers is a notable spike in the number of quick service restaurants (QSRs), especially in developing countries, which align with todays’ convenience and on-the-go culture. In addition, surging adoption of foodservice disposables, in the view of an increase in the demand for pre-packed food, has been preparing the grounds for compostable foodservice packaging penetration.

The study finds that compostable trays continue to account for relatively large share of manufacturers’ bottom lines, while more focus has been placed on increasing the production of compostable cups, as the category is witnessing rising demand from a multitude of end-use sectors. As the search for sustainable solutions scales up, companies operating in packaging industry are starting to launch a number of products made entirely from plant-based materials including mushroom roots, bagasse, seaweed, and starch derived from maize.

As per the study, the wave of ‘customization’ is also approaching in the compostable foodservice packaging space. To fulfill the individual packaging needs while promoting sustainability, manufacturers are targeted towards offering custom products of all sizes, ensuring food safety and minimizing leakage. Demand from non-chain restaurants continues to influence growth strategies, and as identified by the FMI’s study, market stakeholders are tapping into opportunities in chain café and independent foodservice operators. Rapid expansion of international chain café in developing countries along with growing consumer preference to eat out, especially from food trucks and street stalls, is also likely to work well with the manufacturers’ growth strategies.

Growth prospects of the compostable foodservice packaging, as the report opines, are high in EU5 and the U.S. Greater awareness and easy access to innovative solutions along with favorable regulatory framework and higher availability of compost facilities in these regions have worked to the advantage of the stakeholders. In addition, market consolidation in Asia Pacific, particularly in the southern region, will remain a key to gaining distinct competitive advantage, as trends of eating out and online ordering have spiked across the region.

The business intelligence report also offers an incisive outlook on competitive landscape by analyzing the key development strategies of the market players. According to the study, the market shows a high level of consolidation, with local and regional players catering to domestic and urgent demands, while leading players with strong regional presence account for relatively small share in the market.

However, markets such as Australia and other Oceanic countries, have witnessed a decline in sales of beer, mostly due to changes in consumption pattern and shift in consumer preference towards other alcoholic beverages. Despite the tough competition faced by beer from different alcoholic beverages, the rise in beer consumption in developing economies such as South Africa, Mexico, and India, is expected to drive the growth of the growlers market during the forecast period.

The primary factors driving the growth of growlers market is the changing consumer demand to experience a large variety of taste and flavors. Moreover, governments in various countries (Oregon being one of the pioneers) are promoting the use of growlers to promote safe storage of alcoholic beverages.

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Craft Beer Trending More in Developing Economies

The beer market in emerging economies is largely taken over by the craft beer manufacturers. China is the largest market for beer by volume, accounting for a quarter of the total market share. Therefore, providing an impetus to the growlers market. The consumer trend in China and India is shifting from mass industrial beers to more refined craft beers, which propels the growlers market in the region. The demand for growlers in China and India has significantly increased over the last few years, with both, the rise of local craft breweries and the arrival of a growing number of foreign brands.

Non-glass Growlers Highly Recommended, Growler Sales to Face Challenge from Growing Popularity of Crowlers

FMI’s analysis suggests that developed economies tend to create short-term demand and growlers have emerged as an effective packaging solution to cater to this demand. Their reusability makes them ideal for beer packaging and also helps save packaging costs. However, the beer packaged in clear glass growlers is always probable to lose its flavor. The use of dark glass growlers, ceramic growlers, and stainless steel growlers is thus recommended for long-time storage.

Breweries spend millions of dollars on their beer packaging lines to ensure low oxygen levels and freshness of beer for a longer period of time. However, beer goes flat within 24-28 hours of opening the growler, irrespective of the type of growler it is stored in. This may lead to a decline in growler production in the near future. Promising growth in the popularity of crowlers as a superior, more convenient alternative to growlers will reportedly hamper the sales of latter in coming years.

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Global Vendor Landscape Remains Highly Fragmented in Growlers Market

Key manufacturers in the global growlers market profiled in this report include– William Croxson & Sons Limited, DrinkTanks Corporation, Alpha Packaging Inc., Ardagh Group S.A., Klean Kanteen, Inc., Novio Packaging B.V., Berlin Packaging, LLC, MJS Packaging, Inc., Saxco International, LLC, Boelter Companies, Zenan Glass, Hydro Flask, Global Glass Solutions, GrowlersWerks, Inc., Portland Growlers Co., and ORANGE Vessel Co.

While leading manufacturers in the growlers market are focusing on organic expansion strategies, Alpha Packaging has been one of the prominent players strategizing on growler manufacturing capacity expansion. The company has well-established eight production facilities across the US to attain large scale of production capacity and to be strategically near its core customers.