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1 Oct 2020

Econ Digest

Opportunities for eco-friendly packaging businesses

Amid the rising plastic waste crisis, where Thailand is among the countries throwing the most plastic waste into oceans, we have seen cooperation between government agencies and private sectors in launching campaigns and incentive measures to reduce the use of plastics from January 1, 2020, a good starting point from which to move towards the goal of zero single-use plastics by 2025. However, coordination in operation is also required throughout the supply chain, including the food and beverage industry, the packaging industry and retail operators, in order to achieve the goal of reducing packaging waste as well as achieving sustainable consumption in the long-term.

 

            As more consumers shift to food delivery services during the lockdown period in an effort to prevent the COVID-19 pandemic, a 15% increase in plastic packaging waste from 5,500 tons per day prior to the pandemic to 6,300 tons per day has occurred. This means that Thailand needs to expedite the formulation of guidelines for facilitating businesses and consumers to gain access to a more eco-friendly alternative packaging. 

     

           KResearch views that, while businesses in 2020 are facing economic contraction that has forced many of them to cut their costs by turning to lower-priced conventional packaging, the market value of eco-friendly food and beverage packaging is still projected to grow 25% from last year to around THB 2.1-2.4 billion – though such growth is much lower than that of 2019, which saw almost twice as much growth. Nonetheless, its market share for 2020 has increased from around 1% to 2% of the total market value of the food and beverage packaging industry.

 

Over the next five years, eco-friendly food and beverage packaging businesses will likely be able to carve out a larger share of the market, benefiting from the demand for eco-friendly packaging and conditions that support production, such as incentive measures for businesses, the availability of alternative raw materials, and government measures aimed at the creation of an effective waste packaging management system. KResearch expects that the market turnover of eco-friendly food and beverage packaging will likely be in the range of THB13-16 billion in 2025.

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Econ Digest