US Retail Bags

US Retail Bags

Demand for retail bags in the US is forecast to grow 2.5% per year to $4.5 billion in 2027, with regulations targeted at single-use products and growing environmental concerns among consumers leading to significant changes in industry composition and outlook:

• Growth in market value will come almost entirely from a shift in the product mix toward higher-priced bags that meet regulatory requirements.
• The number of bags used will stagnate, with strong growth in the foodservice market offsetting unit losses in grocery and other retail stores.
• Strong growth in paper and heavier-gauge reusable plastic bags will somewhat offset losses in the single-use HDPE t-shirt bag segment.

New Retail Bag Regulations May be Slowing

In the past decade, 12 states and hundreds of municipalities in the US have passed retail bag regulations. These typically ban the distribution of single-use plastic bags, and they can also include fees for paper bags. Such regulations have impacted the retail bag market tremendously; consumers and producers alike face increasing uncertainty about the future of bag bans in the US, as well as which bags will be allowed in the future.

Many large markets (e.g., California, New York, Baltimore) have already enacted bans, while a steady contingent have passed bag ban preemption laws. This leaves a dwindling number of jurisdictions where new bag bans can be passed to further shakeup the retail bag market. However, there is potential for regulations to be revised or enhanced following controversy surrounding the efficacy of thickness-based bans; 2.25 mil bags, in particular, face growing scrutiny as a legitimate solution to curbing plastic waste.

Foodservice Trends will Act as a Boon to Retail Bag Use

Historically, the foodservice market has been a relatively minor component of bag demand compared to grocery and other retail stores. However, a strong increase in the popularity of takeout and delivery orders will continue to drive the use of retail bags at many foodservice establishments.

These trends are particularly evident in full-service and fast casual restaurants, which increasingly see takeout and delivery as an important revenue stream. Such establishments often use larger, higher-value bags compared to fast food restaurants, thereby supporting demand growth in both units and value.

Strong Demand for Paper Continues, Along with Growing Interest in High Gauge Plastic

Bans on thin, single-use plastic bags have caused a significant increase in demand for paper retail bags, especially where regulations have not included paper bag fees. Paper is now preferred in foodservice applications, as well as in key retail segments like apparel stores.

Additionally, many bans only pertain to single-use plastic bags that are thinner than 2.25 mil. This fact has generated significant demand for thicker bags in recent years, but it has also stirred controversy regarding the efficacy of bans from environmental and consumer behavior perspectives.

Study Description

This Freedonia industry study analyzes the $4.5 billion US retail bag industry. It presents historical demand data (2012, 2017, and 2019 through 2022) and forecasts (2023 through 2027 and 2032) by type (single-use and reusable), material (plastic, paper, and natural fabric) and market (grocery stores, foodservice, and other retail stores). The study also evaluates company market share and competitive analysis on key industry competitors including Novolex, Inteplast Group, Advance Polybag, International Paper, and Sigma Plastics Group.