PUNE, India, March 30, 2023 – Exactitude Consultancy, the market research and consulting wing of Ameliorate Digital Consultancy Private, has released the final copy of its detailed research report on the returnable packaging market.
The report concludes that the returnable packaging market will enjoy a 6.2% CAGR from 2023 to 2029. The market value of returnables is expected to push north of almost $171 billion by 2029, building on a base of almost $99 billion in 2022.
The report defines returnable packaging as items that can be recycled or reused throughout the supply chain while adhering to consumer safety guidelines. These comprise hand-held containers, dunnage, racks, pallets, and bulk containers. They may be fabricated from materials such as wood, plastic, and metal. The use of returnable packaging can lead to high net returns for companies and savings on shipping and transportation costs.
The returnable packaging market will certainly expand, owing to the demand for sustainable packaging solutions by industries and customers alike. Although initial capital investments are high, the returns are achieved rapidly. Reusable packaging is made of durable materials and can is better able to withstand harsh weather and logistical troubles than single-use alternatives. Growing awareness of sustainable packaging and rapid industrialization can bode well for the market. Improvements in economic policies coupled with demand for foods and beverages can bolster market growth.
Recent developments in the returnable packaging market
- November 28, 2022: Brambles Limited has announced that it has entered into an agreement to combine the pallet and automotive pooling operations of CHEP China with Loscam (Greater China) Holdings Limited (“Loscam Greater China”)
- June 7, 2022: Brambles committed to net-zero emissions by 2040 bringing its deadline forward 10 years. Brambles have announced its commitment to achieving net-zero greenhouse gas (GHG) emissions by 2040.
Innovative packaging design leads to material reduction and innovation
Currently, best practices in innovative packaging design are based on “full life cycle” perspectives. As such, materials are considered sustainable if they:
- Present a reduced carbon footprint during their manufacturing
- Can be incorporated into circular economy models that minimize packaging waste. This includes recyclable or reusable materials, a measure that 60% of companies claim to be working on, according to figures published by McKinsey
- They are biobased materials or materials made from renewable sources
Its main sustainability benefits include:
- A 30% reduction in greenhouse gas emissions compared to EPS
- 100% recyclable in PSE sectors (such as sorting bins, collection points, and our own Knauf Circular® program)
- The same physical and sustainable advantages of EPS: lightweight, extra protection against shocks, durable.
Market dynamics
Drivers
- Increasing demand for sustainable packaging
The rising awareness about climate change, environmental degradation & its severe consequences on humankind has created an urgency for adopting sustainable development models. Single-use and expendable packaging is harmful to the environment as they are not-biodegradable. Single-use packaging materials stay in the biosphere for millions of years in the form of microplastics, which enter the food chain via water and reach humans causing severe health problems. Global packaging demands are massive, and hence equally vast amounts of packaging waste are created every day. Returnable packaging is environmentally friendly and reusable, which reduces the amount of waste generated daily.
Restraints
- High installation costs
Returnable packaging market growth would be hampered by the extensive capital expenditure required. The cost per trip is lower for returnable packaging compared to single-use packaging. However, the return trip costs add to the operation expenditure making the former expensive. Small and medium enterprises cannot afford the adoption of returnable packaging owing to its expensive nature. These enterprises form the bulk of the potential market, which will be left underexploited with high installation costs.
Opportunities
- The growing consumer demand in developing economies
With the advent of urbanization combined with the increase in disposable income of the population, there has been an increasing demand in the consumer durable and food & beverages market. The increased internet penetration and the e-commerce boom have further fueled this demand. The growing consumer demand will translate into an equal increase in returnable packaging. Returnable packaging reduces operating costs in the long run, resulting in more significant profit margins and contributing to the growing adoption of returnable packaging in developing economies.
Challenges
- Integration with existing supply chain logistics
The existing supply chains are accustomed to single-use packaging models. No process involves returning packaging materials from the consumer to the vendor/supplier. The storage and administration of returnable packaging need to be simplified and efficiently integrated with the existing supply chain systems. The failure of which will lead to higher maintenance and operational costs. A collaborative and cooperative approach can help achieve efficiency and optimize returnable packaging.
From: reusable packaging news