Global consumer packaging waste is set to accelerate as food and drink producers face sustainability trade-offs

New research from ING Bank’s economics team reveals the mountain to climb for the global consumer goods industry in its efforts to reduce waste. The research shows that countries across the world are set to see an acceleration in packaging waste, despite a push for more sustainable practices among businesses and consumers.

The question of how to make packaging more sustainable and the methods to deal with packaging waste are growing global issues. ING’s research shows how the challenge is set to grow in the years to come with total packaging volume for consumer goods in the US growing at 1.5% per year on average until 2025, outstripping population growth. In Europe, packaging waste per capita is set to rise by 1.5% per year on average until 2025 with plastics accounting for 30.2% of overall packaging waste by 2040, up from 22.7% in 2018. While Europe and the US are set to experience a rise in packaging consumption, Africa, Asia, and Latin America are also expected to see increases in usage.

The consumer packaging sustainability challenge is most acutely felt in the food and beverage industry where growing demand for convenience products, on-the-go consumption, and home delivery are leading to the increasing use of packaging material. Food and beverage packaging now represents 40% of all plastic packaging in Europe. Packaging remains one of the most carbon-intensive elements in the value chain for beverage producers as well as an important source of carbon emissions for food producers.

Worryingly, as the average household reduces in size, more packaging material per kilogram will be produced as smaller households favour smaller pack sizes of items. This is most acutely felt in developed markets where more waste per capita is produced than in developing nations and household sizes are smaller. Whilst food and beverage companies are acting quickly to reduce the size and weight of packaging, the research shows that these initiatives only slow down overall growth and fail to reverse consumption increases.

The research, released in a new report titled The sustainable food packaging choices that don’t come ready-wrapped, explores the growing need for sustainable packaging in the food and beverage sector, the trade-offs for companies, and why major investments are needed to shift packaging production to a more sustainable future. Changes to packaging can meaningfully reduce the environmental impact for beverage brands with plastic (PET) and returnable glass beer bottles having a carbon footprint per litre which is around three times lower than an aluminium can and five times lower than a one-way glass bottle. Yet, as sustainable plastic packaging supplies remain low, higher costs are making more environmentally-friendly practices less appealing to firms. ING analysis shows that it would have cost a European beverage manufacturer around 20% more in 2022 to only use recycled PET for its bottles.

Whilst challenges remain for the food and beverage sector, there are a number of exciting opportunities that could drive sustainable packaging adoption among companies. One major beverage company estimates that shifting from bottles made from virgin plastic to bottles made from 100% recycled PET reduces carbon emissions by approximately 30% per bottle. New industry partnerships to develop greener packaging production technologies and more investment in recycling infrastructure could also further accelerate the industry’s transition.

Thijs Geijer, Senior Sector Economist, ING, noted, “As the world grapples with the challenges of moving towards a sustainable future, consumer goods packaging waste is a significant blocker to progress. Unless words are matched with deeds, packaging consumption, waste, and a lack of recycling capacity will remain a daunting challenge for the consumer goods industry’s sustainability targets. Right now, we continue to be concerned by the elevated costs of sustainable packaging which is stopping consumer goods companies from using less polluting packaging. However, we remain cautiously optimistic about the untapped opportunities for stronger regulation and cross-industry initiatives to reduce the environmental impact of packaging. Reducing packaging waste and plastic pollution is achievable but, failing to act on the scale required doesn’t bring us closer to a circular economy.”

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