Sustainable packaging, which gained significant momentum during the COVID-19 pandemic, is facing setbacks in Asia due to high inflation, according to a report by GlobalData, a leading data and analytics company.
The push for sustainable packaging has been fueled by increasing consumer awareness, corporate commitments to environmental initiatives, and regulatory pressures. These factors led to heightened investment in sustainable packaging, particularly as the pandemic prompted a shift in consumer consciousness towards environmental issues.
“Sustainable packaging initiatives have been driven by consumer awareness, corporate commitments to prove green initiatives, and regulation. Given the multiple factors encouraging sustainable packaging, manufacturers have increased their investments,” said Parthasaradhi Reddy Bokkala, Lead Consumer Analyst at GlobalData, highlighted the impact of inflation on this trend.
“With all-round support, sustainable packaging has been trending, especially since the COVID-19 pandemic, when consumer awareness increased. However, the high inflation since early 2022 has been a dampener for these initiatives,” Reddy added.
The challenge lies in the higher costs associated with sustainable packaging materials, which are typically more expensive than traditional options. These materials require specialized manufacturing processes to meet consumer expectations, which further drives up costs.
Deepak Nautiyal, Consumer and Retail Commercial Director for APAC and the Middle East at GlobalData, explained, “Amid rising input costs, manufacturers are not in a position to absorb these costs and have to pass them on to consumers, which will ultimately lead to price increases. Given the high prices due to inflation, products would become even more expensive with the addition of these costs.”
Despite their enthusiasm for sustainable packaging, Asian consumers are increasingly wary of the economic uncertainty and inflationary pressures. This has created a dilemma, as consumers must choose between supporting sustainable initiatives and managing their budgets.
Reddy noted the conflicting priorities revealed in a recent GlobalData consumer survey. “Consumers’ confusion can be gauged from a recent GlobalData consumer survey, wherein nearly a third (31%) of respondents opined that recyclable packaging is an essential feature when purchasing products. Conversely, 58% of them responded that they are checking or comparing prices before a purchase, while 46% stated that they are switching to cheaper brands,” he said.
As inflation continues to influence purchasing decisions, the future of sustainable packaging in Asia remains uncertain. While consumer demand for environmentally friendly options is strong, economic realities may force a reconsideration of priorities in the short term.
