Foodservice Paper Bags Market

Rising Concerns Regarding Plastic

In the recent past, concerns pertaining to environmental pollution and the role of plastic have become a challenge to environmental organizations and governments that are working to curb pollution.

The said organizations are working on raising awareness among both suppliers and consumers. For instance, on the occasion of the World Environment Day in 2018, India’s Union Minister for Environment, Forest and Climate Change urged industries to eliminate plastic usage, pointing at the 25,000 tonnes of plastic waste generated every year in the nation.

To counter the alarming levels of pollution, over 127 countries have adopted some form of regulation, according to a 2018 report by the UN environment program. The guidelines in China and European countries are highly stringent, leading to penalties in case of violation.

For instance, Isole Tremiti, a tourism hub in the Italian province, imposes fines up to 500 euros if anyone is found polluting the premises with plastic. Being a highly popular tourist destination, the move has compelled foodservice providers in the region to opt for paper-based packing.

Such regulations across the world eventually influence consumer behavior, subsequently increasing demand for non-hazardous alternatives such as paper bags.

Growing Trend of On-the-go Meals

Backed by macroeconomic factors such as changing lifestyles, rampant industrialization, and rapid urbanization, the demand for on-the-go breakfast, meals, and packed food has witnessed a significant upsurge.

Adding to the opportunity, prevailing concerns regarding the effects of plastic on the environment and health, thereby creating a need for eco-friendly and sustainable solutions.

Several studies have revealed that paper bags are either made of natural fibers of bleached or unbleached materials or derived from recovered materials. Unlike plastic, which contains certain chemicals that can penetrate into the stored food or beverage, paper bags are relatively safer.

Using paper bags also minimizes the risk of metabolism and fertility-related issues, which are often associated with plastic materials when subjected to heat.

Paper bags fulfill the consumer requirement of safe, leakage-proof, and recyclable packaging solutions. Paper bags are gradually replacing plastic packaging solutions in regions where the takeaway and online food delivery trends are gaining prominence.

Besides, rising disposable incomes, and increasing habit of eating restaurant food are propelling the consumption of packaged food, subsequently impelling the adoption of paper bags in foodservice market.

Challenge: Early Penetration of Plastic

Over the years, plastic has cemented its position as the go-to packaging solution in the food-service industry, and an instantaneous paradigm shift from plastic to paper products is not feasible. Likewise, plastic has an edge over the paper in terms of physical properties such as sturdiness, high spill-proof, and high resistance to tearing.

On the other hand, paper bags are resistant to water and are easily tearable when subjected to high pressure. This is a crucial factor upholding the sales of plastic bags, posing a challenge to paper bags.

Although environmentalists continue to argue about the adverse effects of plastic waste on the environment, paper bags are equally threatening to the environment.

Since paper is produced from trees, the number of trees cut down every year to facilitate the production of paper will have a significant impact on the environment, directly contributing to climate change, the biggest environmental issue.

Moreover, paper bags are priced higher than plastic bags, causing foodservice providers to spend more on packaging as compared to plastic options.

Region-wise Analysis

Europe Foodservice Paper Bags Market

Europe is expected to remain at the forefront of demand, accounting for a share little below 2/5th of global value. The region’s hegemony can be attributed to stringent norms in place to prevent the usage of plastic-based products.

In February 2019, the European parliament voted to ban single-use plastic to curb the accumulation of plastic wastage. The vote, which is likely to come into force by 2021, is expected to create huge demand for sustainable products, including paper bags in the years to come.

In 2018, the UK introduced a law to charge 5p on every plastic bag sold. This move has proven successful in creating an aversion towards plastic bags among consumers, as the usage of plastic bags fell by nearly 59% within a year of introduction.

This indirectly indicates the growing adoption of paper bags in the region, ensuring the healthy growth of the market.

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East Asia Foodservice Paper Bags Market

East Asia will remain the second most lucrative region, capturing more than a quarter of the global value. Akin to Europe, the region's prominence can be attributed to mounting levels of plastic waste and the subsequent measure by nations to reduce the environmental impact.

In 2017, China alone produced waste of 215 Mn tonnes out of which plastic is expected to have accounted for nearly half of the volume. On this premise, In 2017, China banned the import of most plastics for recycling. Likewise, in 2020, the nation announced a ban on single-use plastics and is planning to forbid the usage of consumer single-use plastics by 2025.

Complying with the regulatory norms, foodservice providers are seeking alternatives. For instance, El Willy, a Spanish restaurant chain that recently entered the Chinese province added sustainability to its goals in 2018, and is planning to replace plastic products with paper alternatives.

Similarly, in 2019, South Korea banned the usage of single-use plastic bags, thereby asserting end-users to adopt eco-friendly substitutes. On the back of these facets, paper-based products are likely to emerge as a lucrative substitute in several applications, including the foodservice industry.

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South Asia Foodservice Paper Bags Market

South Asia is poised to remain a prominent region during the forecast period, accounting for nearly 1/5th of market value. The healthy growth of the region is attributed to stringent government regulations imposed against the usage of plastic bags in the region.

For instance, India has announced its objective to scrap plastic-based products, including bags, cups, and cutlery, among others, by 2022, and has forbidden the usage of these products.

Similarly, Thailand banned the usage of plastic in 2020 with the goal of a complete ban by 2021. Thailand also declared that the usage of plastic bags fell by 2 billion units, or about 5,765 tonnes in a year, thus paving the way for paper bags in the region.

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Category-wise Insights

Brown Kraft Remains Most Sought-out

Based on the type of material used to manufacture paper bags, brown kraft will prevail as the most popular material, capturing more than 4/5th of market value.

High preference for brown paper food service bags is linked to superior tensile strength as compared to white kraft material. Moreover, brown kraft degrades naturally within a few weeks, with minimal environmental impact.

Non-handle Bags Remain Popular

On the basis of the type of bags, non-handle bags are expected to hold the majority of market share, accounting for more than 2/3rd of global value. The popularity of non-handle bags is attributed to the ease of manufacturing and affordability.

Restaurants Drive Majority of Sales

By end-use, restaurants are expected to remain the most prominent consumer of paper bags, accounting for nearly half of market value, owing to the growing popularity of food delivery services.

Likewise, online food delivery accounts for more than a quarter of market value, backed by growing preference among consumers due to the convenience it offers.

Foodservice Paper Bags Manufacturers

Organic growth strategies such as acquisitions, mergers, and expansion have been identified as the key strategies adopted by key players of the market. Similarly, players are also trying to build a loyal consumer base and are focusing on developing sustainable packaging solutions.

On these lines, in June 2018, Huhtamaki Oyj, a Finland based player, acquired Ajanta Packaging's business in India, a manufacturer of pressure-sensitive labels in India.

Likewise, in 2018, On 7 Amcor Ltd., an Australian packaging manufacturer, acquired Bemis Company Inc., a leading food and infant formula packaging company.

Foodservice Paper Bags Market Report: Scope

Attribute	Details
Forecast Period	2020-2030
Historical Data Available for	2015-2019
Market Analysis	USD Million for value and Tonnes for volume
Key Regions Covered	North America, Europe, East Asia, Latin America, South Asia, Oceania, and Middle East and Africa (MEA)
Key Countries Covered	US, Canada, Brazil, Mexico, Rest of Latin America, Germany, Italy, France, Spain, U.K., Russia, Rest of Europe, China, Japan, South Korea, India, Malaysia, Thailand, Indonesia, Australia, New Zealand, South Africa, and Rest of MEA
Key Segments Covered	Material, Bag Type, End-use and Region
Key Companies Profiled	WestRock Company, Huhtamaki Oyj, Paperbags Limited, Novolex Holdings LLC, Ronpak Inc., The Mondi Group LLC, Amcor Ltd., Vegware Ltd., Stora Enso Oyj., Smurfit Kappa Group, International Paper Company, Georgia Pacific LLC, Welton Bibby And Baron Limited, Biopac (UK), United Bags Inc. and Global-Pak.
Report Coverage	Market Forecast, brand share analysis, competition intelligence, DROT analysis, Market Dynamics and Challenges, Strategic Growth Initiatives
Customization & Pricing	Available upon Request

Key Questions Answered by the Report

• What is the market size of the foodservice paper bags market?

  The global Foodservice Paper Bags market is expected to reach a valuation of US$ 1.45 Bn by 2030.

• Which is the largest market for foodservice paper bags?

  Europe is expected to maintain hegemony over the regional landscape through the course of the forecast period

• Which are the top companies in the Foodservice Paper Bags market?

  Key players operating in the market include WestRock Company, Huhtamaki Oyj, Paperbags Limited, Novolex Holdings LLC, Ronpak Inc., The Mondi Group LLC, Amcor Ltd., Vegware Ltd., Stora Enso Oyj., Smurfit Kappa Group, International Paper Company, Georgia Pacific LLC, Welton Bibby And Baron Limited, Biopac (UK), United Bags Inc. and Global-Pak.

• Which is the largest end-user for foodservice paper bags?

  The restaurants segment is expected to channel the majority of revenue to the Foodservice Paper Bags market through the forecast period.

• What is the outlook on the foodservice paper bags market?

  The growth of the Foodservice Paper Bags market is primarily attributed to the rising awareness regarding the adverse effects of plastic products.

Enquiry before Buying

• Is this research conducted by Future Market Insights?

  Yes, the research has been conducted by expert analysts of Future Market Insights through a combination of primary research and secondary research. To know more about how the research was conducted, you can speak to research analyst.

• What research methodology is followed by FMI?

  FMI follows a methodology that encompasses demand side assessment of the market, and triangulates the same through supply side analysis. This methodology is based on use of standard market structure, methods and definitions.

• Who are the respondents for primary research?

  FMI speaks to stakeholders across the spectrum, including C-level executives, distributors, product manufacturers, industry experts. For a full list of primary respondents, please reach out to us.

• What are the sources of secondary research?

  FMI conducts extensive secondary research through proprietary databases, paid databases, and information available in the public domain. We refer to industry associations, company press releases, annual reports, investor presentations, and research papers.

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Key Segments

Material Type:

• Brown Kraft
• White Kraft

Bag Type:

• Handle Bags
• Non-handle Bags

End Use:

• Restaurants
  • Full Service Restaurants
  • Quick Service Restaurants
  • Catering Services
  • Others (Café, Pub, Bar, etc.)
• Hotels and Lodgings
• Food Courts (In malls, Airports, Multiplexes Railways, etc.)
• Online Food Delivery
• Others (Hospitals, Schools, offices, etc.)

Region:

• North America
• Latin America
• Europe
• South Asia
• Oceania
• East Asia
• Middle East and Africa