Worldwide sales of compostable foodservice packaging reached approximately 6,400 tons worth $16.7 million in 2018, according to a report from Future Market Insights; the market is projected to grow at a CAGR of around 5% through 2029. As end users’ quest for sustainable packaging intensifies, manufacturers are likely to witness a period of sustained demand in the future.

The expansion of the foodservice industry, along with the emergence of “takeaway” and “grab-and-go” services, will continue to provide potential growth prospects for the compostable foodservice packaging 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 market growth.

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 global efforts to become a more sustainable society will be instrumental in creating new growth opportunities for market vendors.

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 today’s convenience and on-the-go culture. In addition, the surging adoption of foodservice disposables, in view of an increase in demand for pre-packaged food, has been preparing the grounds for compostable foodservice packaging penetration.

The study finds that compostable trays continue to account for a relatively large share of manufacturers’ bottom lines. In addition, 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 the 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.

A wave of customization is also reportedly approaching in the compostable foodservice packaging space. To fulfill individual packaging needs while promoting sustainability, manufacturers are aiming to offer custom products of all sizes, ensuring food safety and minimizing leakage. Demand from non-chain restaurants continues to influence growth strategies, and market stakeholders are tapping into opportunities in chain café and independent foodservice operators. The rapid expansion of international chain cafés in developing countries, along with growing consumer preferences to eat out (especially from food trucks and street stalls), are also likely to work well with the manufacturers’ growth strategies.

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