The global packaging industry, valued at a staggering trillion dollars, has long relied on plastic (41%) and cardboard (36%) as its primary raw materials. However, as the world shifts its focus towards climate initiatives, a significant transformation is underway within the packaging market. Leading brands are making bold commitments to move away from plastic packaging to sustainable alternatives.
Sustainable packaging refers to packaging that is sourced responsibly, designed to be effective and safe throughout its life cycle, meets market criteria for performance and cost, is made entirely using renewable energy, and once used, is recycled efficiently. We believe sustainable packaging will revolutionize the packaging landscape globally and will become a substantial market in a decade’s time.
Governments worldwide are implementing regulations to reduce plastic waste and promote the use of sustainable packaging. India (starting July ’22) and the EU (starting 2021) banned single-use plastic (SUP). The USA banned the use of specific plastics in 22 states. As consumers become increasingly environmentally conscious, they actively seek out sustainably packaged products. For brands, this presents an opportunity not only to align with consumer values, build a positive reputation but also to differentiate themselves from competitors.
These factors have led to several Consumer Product Goods (CPG) companies to announce deadlines to reduce their use of virgin plastic in packaging and shift toward more earth-friendly options, including Keurig Dr Pepper, PepsiCo, and Mondelēz. Most CPG brands have dedicated sustainability teams with ESG mandates driving their efforts across the company.
Yet, a significant challenge exists in the market – what we term “Solutioning”, i.e. identifying viable alternatives to existing plastic packaging that meet various criteria: for finance, they must be economically feasible; marketing must find them attractive enough to be picked up from shelves; the supply chain needs packaging that is suitable for warehousing and logistics; R&D seeks solutions that are truly sustainable and safe for consumers, and manufacturing requires them to be feasible for integration into their present production processes with minimal change management.
While brands look for this Solutioning, suppliers look for precise designs and material specifications to manufacture, leaving a hole in the market to be used as a wedge for entry.
In this evolving landscape of demands and challenges, we encountered the founders of Cirkla – Ankur, Kapil, and Vaibhav – a team with deep expertise and a proven track record of building and scaling the sustainable packaging division at Zume Inc. in India and EMEA. With an asset-light, solution-led approach, we believe Cirkla is poised to lead the charge in helping brands achieve their sustainability goals.
Our early partnership with Cirkla reflects our confidence in their ability to drive meaningful change in the packaging industry.
More in Economic Times