Food Service Packaging - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts (2024 - 2029)

The Food Service Packaging Market size is estimated at USD 128.82 billion in 2024, and is expected to reach USD 158.09 billion by 2029, growing at a CAGR of 4.18% during the forecast period (2024-2029).

Key Highlights

• Over the last few years, online food ordering and restaurant delivery have grown more than 20%. With the increasing adoption of the online food delivery system, the demand and use of the sustainable food service packaging market are rising, causing manufacturers to opt for sustainable packaging solutions.
• The cafes and restaurants in Australia are growing, benefiting the food service packaging market. Over 51.9 thousand cafes and restaurants were open across Australia as of the end of the fiscal year 2022, according to the Australian Bureau of Statistics. Australia has more cafes and restaurants operating than in 2017 when there were over 41.5 thousand establishments. The demand for food service packaging rises as the number of cafes and restaurants rises. Food and drink to go are frequently offered by cafes and restaurants, necessitating packaging like paper bags or plastic containers. The demand for retail bags can rise as more cafes and restaurants open.
• Hinojosa's mission is to assist companies in promoting more environmentally friendly consumption habits in the food sector and to strategically make it easier to include sustainability as a competitive advantage. Food service was one of the industries with the most significant demand for plastic for packaging, where plastic usage to package prepared foods climbed by more than 33% in 2021. In March 2023, Hinojosa Packaging Group launched a new line of food service packaging products that offers a range of solutions using printing methods safe for contact with food. This container is constructed entirely of recyclable paper and is biodegradable, which makes it stand out from other packaging.
• However, sustainable packaging can be expensive and challenging to develop. Many businesses need more resources, and it would require investing in R&D for better packaging on their balance sheets. Further, the potential cost savings from streamlined packaging must be considered. The cost of using sustainable packaging is higher than conventional packaging. This is due to the materials involved and their sourcing (both virgin and used) and the less-established supply chains, manufacturing processes, and lower economies of scale.
• The COVID-19 pandemic left long-term effects on the food service packaging sector. To adjust to this new normal, companies in every industry, including packaging, embraced new technologies and methods of operation. Demand for fresh food packaging increased as people became more health-conscious. Consumer preference for packaged food to avoid diseases caused by bacteria, microorganisms, and pathogens, rather than buying it from a street vendor, is expected to fuel market growth.

Food Service Packaging Market Trends

Quick-service Restaurants (QSR) to Hold the Largest Share

• Quick-service restaurants (QSRs) offer low-cost food options, focusing on the speed of service. The minimal table service and emphasis on self-service make this group different from traditional restaurants. Most of the single-use plastic food service products used in QSRs include rigid polystyrene (PS), expanded polystyrene (EPS), polypropylene (PP), polyethylene terephthalate (PET), and polylactic acid (PLA).
• The industry could be more environmentally friendly among the Styrofoam cups and packages, plastic lids, cardboard holders, genetically modified vegetables, and inorganic meat. However, as eco-friendly services become more appealing to customers, many companies are moving to greener options that are less environmentally harmful.
• The growing demand for on-the-go eating trends and increased spending on food have also supported the demand for QSR, eventually boosting the need for food service packaging. According to Domino's Pizza, The quick service restaurant sector (QSR) in the United States has seen year-over-year growth in the past decades, with its peak consumer spending exceeding USD 320 billion in 2022. Although, Consumer spending in this sector saw a notable decline in 2020 owing to COVID-19 Pandemic.
• Some quick-service restaurants, known for their 'organic' options, are adapting to more environmentally friendly alternatives to reduce their carbon footprint. For instance, in June 2022, KFC India unveiled 'KFConscious,' marketed as the most sustainable restaurant in Chennai, as the outlet aims to use environment-friendly materials. KFC India has also announced plans to open 20 more outlets nationwide by the end of 2022. Such instances are driving the demand for sustainable foodservice packaging in QSRs.
• In April 2022, Burger King UK became the first quick-service restaurant corporation in the UK to trial a new range of reusable and returnable packaging for its burgers and sides. The pilot launch was created in partnership with the global reuse platform Loop and witnessed the fast-food chain try out the first-ever reusable burger clamshells. Such instances are driving the demand for sustainable methods in food service packaging.

Asia-Pacific Accounts for the Largest Market Share

• The Asia-Pacific region comprises densely populated countries and emerging economies like China and India. The demand for food services is rapidly growing, and the adoption of sustainable packaging is gaining momentum and is expected to be the highest during the forecasted period.
• Plastic has been an essential part of the packaging industry that forms the foundation of the consumer convenience culture. Owing to their cost-to-performance ratio, traditional packaging materials, such as corrugated paper boards, glass, metals, etc., have been substituted by plastics in food service and numerous applications in the food industry. However, the qualities that make plastic convenient to use also make it non-degradable and have an everlasting presence in the environment, contributing to 43% of pollution in India alone. In February 2022, CHUK, a compostable food service ware brand, joined quick commerce firm Blinkit as its sustainability partner. Blinkitdelivers CHUK's products to end-consumers within 10 minutes, bridging the gap between end consumers and CHUK. The partnership helped CHUK aim to serve one crore pieces to the end-consumers on the platform in FY 2022-23
• Japan has a high per capita consumption of packaging materials, and there is a close relationship between the food and packaging industries in the country. Japanese food manufacturers are known for using high-tech packaging techniques and their tendency toward ingenuity in packaging designs. This focus on packaging innovation has led to the development of attractive and efficient packaging solutions in Japan.
• The packaging industry in India is also experiencing growth in recent years. The introduction of many manufacturing units, eco-friendly materials, and increased emphasis on research and development has resulted in attractive and innovative packaging products. India has also promoted initiatives like "Make In India," aiming to boost local manufacturing and production.
• With these initiatives and factors in place, the packaging industry in India is expected to benefit from increased investment and technological advancements. The availability of locally manufactured products at a lower cost can make the Indian packaging industry competitive in domestic and international markets. The focus on eco-friendly materials also aligns with global sustainability trends.
• Further, according to industry insiders, food service packaging manufacturers are gravitating towards flexible packaging as it is visually appealing, cost-effective, and long-lasting. According to IBEF, the Indian food and grocery market is the sixth-largest globally, with retail accounting for 70% of sales. The Indian food processing industry accounted for 32% of the country's overall food market, ranking sixth in production, consumption, export, and expected growth.

Food Service Packaging Industry Overview

The Food Service Packaging Market is fragmented, as many players have a presence in the market through their offerings. With innovations and demand, the market is attractive for new players.

In March 2022, Pactiv Evergreen Inc. completed the acquisition of its 50% investment in Naturepak Beverage Packaging Co. Ltd. to Elopak ASA affiliates through its wholly-owned subsidiary, Evergreen Packaging International LLC. Naturepak Beverage Packaging Co. Ltd, manufacturing facilities in Morocco and Saudi Arabia, serves customers in the Middle East and African regions.

In January 2022, Huhtamaki announced that it acquired full ownership of its Polish joint venture company Huhtamaki Smith Anderson Sp. z o.o. from Smith Anderson Group Ltd SA. The company manufactured and sold food service paper bags in Eastern Europe at Huhtamaki's facility in Czeladz, Poland.

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