The Future of Circular Packaging: Rapidly Growing Demand for Sustainable Fibre-Based Solutions

The global packaging industry is constantly evolving, and one of the most promising areas appears to be the fibre-based packaging sector, with recent studies pointing to unprecedented growth. A study by market research leader Smithers foresees global demand for fibre-based packaging to reach $503.4 billion in 2027, equalling a compound annual growth rate of 3.4%.

Fibre-based packaging is an optimal solution for a myriad of goods, including food, beverages, medicines or cosmetics. 'Fibre-based' refers to any packaging made from paper or other cellulosic fibres, like pulp, typically sourced from plants and trees. These materials can be recycled at the end of their life, making them a highly sustainable solution—something that has contributed to its growing popularity.

In fact, according to the?Smithers report, the global demand for fibre-based packaging is set to reach a staggering $503.4 billion by 2027. In 2019, this same market was worth approximately $238 billion, which would translate into a twofold increase in less than a decade.

This impressive figure is attributed to the increasing adoption of sustainable packaging practices by brand owners and retailers worldwide, as well as growing awareness among consumers about the need to adopt more environmentally friendly practices. A 2020 survey published by?DS Smith?showed that sustainability is becoming increasingly important to European consumers: 82% of respondents said they consider packaging sustainability when making purchasing decisions. This evolution in consumer and business behaviour naturally turns fibre-based packaging into an attractive option for those looking to shift from carbon-based products to more environmentally friendly packaging solutions.

When looking at trends,?e-commerce?has been another key factor behind the soaring trajectory of fibre-based packaging. The increase in online shopping in recent years has come hand in hand with a significant increase in the volume of packages being shipped, leading in turn to a corresponding increase in the demand for packaging materials. Fibre-based packaging is well-suited to the needs of the e-commerce industry, as it is lightweight, durable, and can be easily customised to fit different products.

Fibre-based packaging: already a champion in innovation

According to?Smithers,?the expected growth will primarily be driven by the e-commerce and food industries. When it comes to packaging products, “it is anticipated that coated fibre-based packaging will become more popular”, motivated by “the development of recyclable/re-pulpable coating products”.

These new barrier coatings, currently under development, can help protect fibre-based packaging from moisture, grease, and other contaminants. This makes it suitable for use in a wider range of applications—in particular, fast-moving consumer goods.

The fibre-based packaging industry is already highly innovative, as the 4evergreen alliance demonstrated last September during its 2022 event, “The Circularity Challenge: How Recycling Contributes Towards the European Green Deal”. One of the panels focused on innovation as a cornerstone of fibre-based packaging, in parallel to the ongoing work conducted by 4evergreen’s Workstream 4,?Innovation. Under the group's overarching scope, experts from member companies are investigating three different projects on the sorting and recycling challenges for paper and board products with barrier functionality: ‘sortability’, new recycling technologies, and comparative recyclability impacts.

• Although there are several moving parts for the industry as a whole, we can certainly spot some major areas of innovation. Great efforts are being made on:developing advanced recycling technologies that can break down complex fibre-based packaging products;
• lightweighting, to reduce the weight of fibre-based packaging products while maintaining their strength and durability;
• research of bio-based materials to replace or reduce non-renewable resources, which includes the removal of aluminium barrier layers.

Challenges to reaching circularity

But it is not all going to be plain sailing for fibre-based packaging. A number of challenges loom for the ecosystem, and if the industry is to meet and even overdo the 2027 predictions, it cannot lose sight of them.

On the one hand, the COVID-19 pandemic and the war in Ukraine have caused significant disruptions to global supply chains, making it difficult for manufacturers to obtain raw materials and transport products. Variations in the cost of raw materials, energy, and transportation can also have a significant impact on the cost of fibre-based packaging products, which may cause some companies to continue relying on the same materials they have always used instead of taking the leap forward.

Looking at the infrastructure landscape, the systems for collection and recycling vary widely across different regions and countries. As a result, despite consumers’ will to recycle their fibre-based packaging, there may not be appropriate infrastructure in place to handle it. This can lead to a certain amount of fibre-based packaging ending up in landfills or being incinerated instead of recycled. On top of that, regulatory constraints on a European and national level can result in increased costs and compliance burdens for manufacturers.?

Finally, a lot still needs to be done to reach a strong understanding of how using different materials and components will impact the recyclability of fibre-based packaging solutions. Collective initiatives, such as cross-industry alliances like 4evergreen, are putting significant efforts into tackling these challenges, through tools like the Recyclability Evaluation Protocol and Circularity by Design Guideline.

As for business owners, they are ultimately responsible for spurring innovation and investing in new technologies. While some challenges lay ahead in the path to making the fibre-based packaging industry more circular, these issues can be addressed through research, infrastructure development, and increased awareness among consumers and industries.