Consumer Demand for Recyclability Leads to Paperization

Since the Ellen MacArthur Foundation released its seminal report, “New Plastics Economy: Rethinking the Future of Plastics,” in late 2017, and followed it with The Global Commitment a year later, there has been an immense focus by CPGs on creating a circular economy for packaging.

Through The Global Commitment, over 250 businesses—including some of the world’s largest plastic producers, retailers, and consumer packaged goods companies—representing 20% of the world’s plastic packaging, made ambitious pledges to reduce their plastic and plastic pollution by 2025. Although many have made progress, most have fallen short of their goals. Their experiences over the years have shown that transitioning to a circular economy for packaging is far more complex than anticipated.

At the same time, smaller CPGs have also been working to reduce the carbon footprint of their packaging, though without making the same ambitious commitments. While the changes to their packaging might not have as big an impact, their smaller size has allowed them to experiment with innovative solutions. But progress has still been slow.

Against this background, our survey offers a snapshot of CPGs' current packaging material use, future sustainability goals, decision-making drivers, and challenges, along with predictions for 2025.

Paper leads in material use

When survey respondents were asked to list the top three packaging materials that make up their primary packaging mix, paper came out on top, at 82%, followed by flexible film, at 35%, and rigid plastic, at 26%. Bringing up the rear were metal, including aluminum and steel, (18%), glass (13%), and bio-based (6%) and compostable (5%) plastic.

The 82% figure for paper may be inflated however, as 39% of respondents listed corrugated packaging, typically used for shipping, as part of the mix. This suggests some respondents included secondary packaging in their answers. Even excluding corrugated though, paper remains dominant, with paperboard at 20%, flexible paper at 13%, and paper pulp at 10%, for a total of 43%.

According to Olga Kachook, director of the Sustainable Packaging Coalition, these numbers track with the trend the SPC is seeing around “paperization,” where paper is being used for a number of new applications, including snack packaging, protective packaging, and produce packaging. “Most of these categories are using molded fiber, paperboard, or laminated paper,” she explains.

Alastair Dorward, CEO of bio-based laundry and detergent pod company Dropps, agrees with Kachook’s assessment. “This research certainly aligns with the broader trends we’ve observed,” he says.

Read this related article, “Breakthrough in Recyclable Coffee Packaging”

“While much of the corrugated material in the market is used for secondary packaging, paperboard remains a leading option for sustainable primary packaging because of its high recyclability,” he adds, citing statistics from Bain & Company that indicate just 9% of plastic is recycled versus 65% of paperboard.

While Unilever’s Senior Packaging and Sustainability Manager - Health & Wellbeing, Kelly Murosky, agrees with paper’s top position, she says she’s surprised to see fiber-based flexible film ranking 3% higher than pulp. “There’s a lot of work going into flexible barrier papers, but there aren’t a lot of recyclable paper films on the market,” she says.

Murosky was also surprised to see flexible film in second place, followed by rigid plastic, although she says that “film is becoming more and more popular for lightweighting.” She adds that the use of flexible film by e-comm companies such as clothing brands “could have brought that number up.”

Jeff Cloetingth, managing director of Industrials & Packaging Sectors at L.E.K. Consulting, has less confidence in the results. “We see a lot less paper as a primary packaging format, and a lot of instances of flexible plastics or rigid containers with a closure or metal cans or glass [for primary packaging], particularly for center aisle-type products, where you need some type of barrier property that allows for shelf-life extension.”

2025 material trends: aspirational or realistic?

When respondents were asked, “If you plan on making changes to your primary packaging mix in the next 12 months, what materials will you be adding or moving to?” (with the option to select three), of the 49% who reported they will be making a change, 28% selected paper. The next-highest percentages were from bio-based (12%) and compostable plastic (9%), totaling 21%—a notable 62.5% increase over 2024. These were followed by rigid plastic at 11%, metal at 12%, flexible plastic at 8%, and glass at 2%.

Reflecting on the responses on paper and compostable and bio-based plastics, Murosky confirmed that “these are the big sustainability buzz items at the moment.” However, given the complexities of both material types for certain applications coupled with the limitations around their recovery, survey respondents’ intentions may be more aspirational than realistic.

“There’s a lot of sentiment that plastic is bad,” says Murosky. “That’s why in response CPGs are saying, ‘Okay, well, let’s go to paper. Even if it’s littered in the environment, it will break down.’ But from a technical standpoint, paper doesn’t provide the best barrier against water, or oxygen and grease. You’re then adding coatings, which compromise paper’s recyclability.”

Read this related article, “Compostable Packaging: ‘A Solution, Not Every Solution’”

Bio-based and compostable plastics also pose technical challenges, particularly in cases where multiple layers are required, and they are even more difficult to dispose of responsibly, given the dearth of industrial composting infrastructure in the U.S.

Shawn French, director of Innovation & Packaging Engineering at Danone North America, believes compostable packaging is “a bit of greenwashing.” He says, “Can you bury a Lay’s potato chip bag in your garden and come back a year later to find that it’s completely dissolved? Or does it need to go to an industrial composting facility, which might not even be available? I would have expected more people to say they would switch to using monolayer film instead, because it’s recyclable.”

Nevertheless, SPC’s Kachook believes increased use of these materials is reasonable, especially when you consider applying these solutions to specific categories, rather than across all packaging formats. “For example, applying compostability to the produce category makes a lot of sense because of the correlation with food and the ease of composting both packaging and leftover/spoiled items,” she says. “Drop-in bio-based plastics are very feasible to implement and have been around for decades at this point. The switch to paper seems to be happening at a very rapid pace already, and it wouldn’t surprise me to see continued growth.”

CPGs prioritize recyclability for new materials

Kachook’s observation that paper, bio-based plastics, and compostable plastics work best when matched with the right applications is true for all packaging materials. The most sustainable option depends on a full life-cycle assessment. Still, CPGs seem to have coalesced around several specific material characteristics when seeking sustainability.

When asked about their top considerations for switching to sustainable packaging, with an option to select two, 54% of respondents chose recyclability, followed by recycled content (25%) and material reduction (21%). While those we spoke with say these results make sense, some believe material reduction should rank higher.

“I believe material reduction drives change more than recycled content because recycled content can be more expensive, whereas material reduction lowers costs,” says Murosky. At Unilever, material reduction is often paired with recycled content, with the savings resulting from less material offsetting the increased cost of PCR.

Kachook agrees that recyclability is a top motivator, especially in light of CPGs' packaging goals and current pressures from consumers and legislators. However, she considers it misguided. “The most impactful action in this list would be material reduction,” she says. “I would like to see more companies focus on that strategy, along with designing reusable and refillable systems.” That’s a perspective that aligns with EPA’s “Reduce, Reuse, Recycle” waste hierarchy.

Both she and Dorward believe it’s recyclability that’s driving the popularity of paper. “Consumers are highly responsive to paperboard packaging, as it aligns with their growing preference for materials that can be easily recycled at home,” Dorward says. “The synergy between consumer behavior and existing infrastructure makes paperboard an increasingly attractive option for brands prioritizing sustainability.”

Other drivers for material changes included compostability (16%), greenhouse gas/CO2 reduction (15%), material health (BPA, PFAS, PVC, etc.), bio-based (10%), and plastic-free (8%).

Recycled content use shows mixed results

While recycled content appears to be a driver in the selection of more sustainable materials, the majority of respondents (40%) are using just 25% or less PCR in their packaging by weight. Murosky is not surprised. “Twenty-five percent seems to be the entry point into PCR without having major color or contamination issues,” she says. “In addition, a lot of the early [extended producer responsibility] mandates require 25% PCR and then increase from there as the years go on.”

Kachook says the 25% figure aligns with her expectations, since PCR can cost two to three times more than virgin resin, and food-grade PCR is often limited.

Looking primarily at paperboard, Dorward agrees that cost is certainly a factor, but he also attributes the low number to the reduced durability of recycled fiber. “Higher PCR content can compromise the structural integrity of paperboard, making it more prone to tearing, crushing, or losing rigidity,” he says.

Still, when respondents were asked what type of PCR they are using in their primary packaging with the option to select two, 70% selected paper. This was followed by PCR plastic for rigids (32%) and PCR plastic for flexibles (26%). From there, the numbers dropped precipitously to 6% each for glass and aluminum.

While some figures seem accurate, for example, paper and rigids, as they are primarily used for non-food-contact applications, others seem less so. Among them, French questioned the low number for aluminum, since “every can is able to be made into a new can.” Murosky did as well, noting that “everyone claims that aluminum is infinitely recyclable and is the most recyclable material.” This result could be explained by the survey demographics, with only a few beverage CPGs represented.

French also believes glass, at 6%, is low. While the material is highly recyclable, the EPA reports that the U.S. recycling rate for glass in the U.S. is just 30 to 33% versus 90%-plus in some European countries. This is almost certainly because many U.S. municipal recycling facilities (MRFs) no longer collect glass, given that the cost to transport it to a processor can sometimes outweigh the profit, hence a limited supply.

Cost poses biggest hurdle to meeting goals

As previously noted, the Ellen MacArthur Foundation’s creation of The Global Commitment in 2018 catalyzed some of the world’s most prominent CPGs to make public commitments to reduce the environmental impact of their packaging. Meanwhile, smaller CPGs have kept their sustainable packaging efforts largely under wraps. It’s not surprising then that only 39% of our survey respondents, most of whom represent small- to mid-sized companies, reported that they have made public announcements/commitments around achieving specific sustainable packaging or GHG/CO₂ reduction goals.

Murosky speculates this low number could also be the result of “greenhushing,” where companies are intentionally keeping information on their sustainability progress quiet for fear of being accused of greenwashing or being criticized if they fail to meet their goals.

Dorward, on the other hand, attributes it to the cost of sustainability. “We’re seeing tremendous efforts from vendors to commercialize innovative packaging options, and we love partnering with innovators to push the boundaries and find long-term solutions,” he says. “However, in most cases, the reality is that sustainable packaging often comes with a premium cost, which can be a barrier for some companies as they weigh sustainability against maintaining affordability for customers.”

Not coincidentally, when we asked respondents what they expect the greatest hurdles will be to making a switch to more sustainable packaging in the coming year, the majority (78%) said cost. The next largest hurdle they reported is access to materials, such as PCR, compostable, bio-based, etc., in the quantities required, at 36%.

Kachook suggests a link between the two, saying, that “cost is driven by access, so the less available a material is, or the less commercially scaled it is—for example, seaweed for packaging applications—the more expensive it will be, and the less brands will be able to use it.”

The relationship between cost and new materials also comes into play when CPGs attempt to run more sustainable materials, such as recycled-content or bio-based films, or compostable packaging, on existing equipment. “It requires a whole lot of work,” says French. “And so it’s the cost of the material and the trials and the line time and the travel for people to go to a plant and evaluate things.”

Results of the survey indicate that running new materials on existing equipment is another likely hurdle, with 24% of respondents ticking off this box. To a lesser extent, they also anticipate a lack of expertise, knowledge, or resources within the company and a lack of support from management as being potential hurdles, at 18% and 4%, respectively.

Brand reputation is everything

CPGs are in the business of making money, yet adopting more sustainable packaging often comes with a higher price tag. While it’s true that many companies have altruistic intentions, the motivation to invest in environmentally friendly packaging is more often the result of outside forces. According to our respondents, brand reputation, at 39%, will be the biggest driver in the coming year, followed by regulatory requirements (33%) and consumer demand (25%).

“It seems that brand reputation and consumer demand are essentially two sides of the same coin,” says Kachook. “So if these were combined, I think that would very accurately describe the biggest driver right now for brands.”

French agrees, citing the influence of younger consumers and social media. “I have a son and a daughter who are thirty-somethings, and they’re more driven by a company’s reputation and their online presence and the things they’re doing environmentally and socially,” he says.

Moving forward, it is expected that EPR will begin to have an even greater influence. According to Kachook, “Regulatory requirements will start to rise on the list as more states pass EPR legislation in the U.S. and companies start to feel the pressure of reporting and compliance.”

Predictions align with established trends

Our survey concluded with an invitation to respondents to share with us the trends they see growing over the next 12 months. Predictably, most responses fell under three categories: compostable/bio-based/biodegradable packaging, paper packaging, and recycling/recycled-content.

In addition, our contributors were asked to make a few predictions of their own for 2025. French shares that of late Danone has been particularly focused on recycled content, especially with PET and HDPE. However, he says that “getting to 100% recycled has really been a challenge, because there are some geometry and physical properties that change” as you add more recycled content.

Danone is also following the paperization trend, having recently introduced Silk Kids Oatmilk Blend in a recyclable paperboard carton. As reported by PW, the carton was also the first to use a new datamatrix label from The Recycling Partnership to aid consumers in proper disposal of the package.

Kachook predicts EPR will come to the fore in 2025. “Five states in the U.S. and many countries around the world already have EPR legislation, and as the states start to outline what these programs will look like and their fee structure, more and more companies will start to cite this as a driver.” She adds that on-pack labeling and disposal instructions, such as those used by Danone, will also be a key area for growth.

From Cloetingth’s perspective, the coming year will see global CPGs pushing back on 2025 sustainability commitment timelines—something that several large CPGs have already announced. He also predicts CPGs will begin looking at the environmental sustainability of their packaging in a more holistic way. “This includes not just the packaging’s attributes, but also the total life-cycle and greenhouse gas emissions profile associated with the product and the manufacturing of that product upstream.”

And lastly, Cloetingth expects CPGs to continue to invest in R&D-led material innovation in select applications “to make inroads that solve the current set of packaging challenges … and enable longer-term sustainability for brands at parity and at scale.”

Watch this related video, “Packaging Recycling in 2025: Anne Johnson of Resource Recycling Systems”

Murosky offers a laundry list of trends for 2025. Among them is paper, including flexible barrier papers and molded fiber. “I don’t think anybody’s quite cracked it, so I think that’s why we’ll continue to see it grow,” she says.

She also anticipates a resurgence of reusable and refillable packaging—“maybe in the foodservice space, maybe less so in the CPG space”—after the format took a pause with COVID.

The bio-based space is also one to watch, she advises. “Resin suppliers are putting a lot of stock in that, because we see petroleum as bad.” She says she looks forward to seeing how resin companies will develop first, second, and third generation feedstocks from used cooking oil or other waste that can then be used to produce plastics. She adds that carbon capture is “another super interesting space.”

As for advanced recycling—a technology noted by respondents in the open-ended question— Murosky says its future development could depend on EPR regulations and whether advanced-recycled materials will be counted as recycled content. The same holds true for bio-based materials. “I think if we were to see EPR expressly include advanced recycling as well as bio-based or renewable feedstocks, we would probably see those increase dramatically.”

But Murosky’s predictions, or aspirations for the industry, extend far beyond the next 12 months. “For me, my ultimate goal of packaging would be that everything is in 75% to 100% PCR, and we have to put virgin back into the plastic because we have such a high rate of PCR moving through the system. And then we would supplement it with a bio-based or chemically recycled resin,” she says. “So can we get there in 10 years? I don’t know. I hope we can. That would mean I helped do my job if we can get the industry there."  PW