Foodservice Disposable Packaging Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

Foodservice Disposable Packaging Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

The Foodservice Disposable Packaging Market is expected to register a CAGR of 5.1% during the forecast period. Convenience foods have been experiencing high demand in recent years owing to increased urbanization amid fast-paced lifestyles. Hectic work schedules, generic time constraints, and problems faced during urban commutes have encouraged customers to choose convenience foods. Their easy availability and pocket-friendliness have increased their usage in foodservice businesses.

• The foodservice industry is expanding dramatically. The demand for foodservice disposables, including cups, plates, containers, etc., is increasing, owing to the emergence of online channels and apps for meal delivery services. The growing demand for food service disposables is fueled by ordering food online and delivering it to consumers' homes or other locations.
• The growing penetration of these businesses in online distribution channels has given rise to advanced packaging, such as multilayer solutions to simplify the delivery of convenience food, facilitating the growth of the foodservice disposable packaging market.
• Additionally, the growing focus of countries aiming for sustainable, reusable, and recyclable solutions has prompted the market vendors to develop a cyclic foodservice packaging ecosystem. This has led the manufacturers to create organic, eco-friendly, and recyclable products, which can impact the development of the market. Companies are continuously developing innovative environmental, reusable, and biodegradable technologies. However, the packaging industry's transition towards a sustainable and circular supply chain was temporarily delayed by worries about the hygiene and safety of reused packaging. Challenges related to government regulations and rising labor costs are creating pressure on industry players to meet the deadlines set by respective economies.
• The COVID-19 pandemic had a slightly positive impact on the foodservice disposable packaging market. During the pandemic, awareness among the people increased for hygiene and safety, and it complimented the demand for disposable foodservice packaging solutions.
• The ongoing dispute between Russia and United Kingdomraine has caused companies operating in the area with strong financial ties to the region to consider its long-term effect on business. Ball Corp, Coca-Cola, Nestlé, Carlsberg, ABInbev, and ArcelorMittal are the other companies closing Russian operations. Paper and packaging specialist Mondi, the parent company of Mondi Syktyvkar, has suspended operations in its paper bag plant in Lviv, United Kingdomraine; operations at this facility have been temporarily suspended in response to the crisis.

• The food industry has undergone significant changes over the past few years. The COVID-19 pandemic has made consumers increasingly rely on online delivery platforms with all safety standards in place, starting from preparation, packaging, and delivery. The emergence of Cloud Kitchens has been observed in the regions where delivery services help them create a profitable market to operate without having to invest in infrastructure for dine-in services.
• Food packaging trends are rapidly evolving with lifestyle changes, and food distribution channels are increasingly relying on online food delivery applications. The growing strata of the working populace and the average fast food meal's popularity are driving the foodservice packaging industry.
• For example, in 2021, US consumer spending in the QSR sector totaled USD 304.8 billion. Though Subway had over 6,000 more locations than the next-ranked company, McDonald's had more revenue. However, in terms of sales per unit, Chick-fil-A, renowned for its high levels of customer service, bested both McDonald's and Subway in 2020.
• The COVID-19 pandemic caused monthly quick-service restaurant sales in United States to decrease. Sales fell from USD 29.66 billion in 2019 to USD 24.16 billion in 2020 in March 2020, marking the start of the year-over-year decline. Things started to improve by 2021, with sales beginning in March exceeding pre-pandemic levels and exceeding USD 30 billion per month for the remainder of the year.

• It is anticipated that the foodservice packaging market will expand further in the Asia-Pacific. Consumers are choosing convenience foods owing to rising disposable incomes, which is broadening the reach of the fast-food culture. The high concentration and presence of the global population in the region have been a complementing factor in the market. Some opportunity-rich environments are the Indian Sub-continent, Japan, Korea, the SEA Region, and China, among others.
• All businesses that provide meals made outside the house, such as restaurants, cafes, and other food outlets, are categorized as being in the restaurant or foodservice industry. As fast-food restaurants become more prevalent, mobile food businesses like food trucks and cloud kitchens are also growing in developing nations, despite their optimism for the future expansion and viability of their enterprises and restaurant owners.
• Although the procedure is complex, incorporating technology allows the players in the foodservice business to flourish significantly. For operators of food chains, high-cost investment in cutting-edge infrastructure continues to be a significant barrier. The pressure on the hotel sector has intensified due to quality and service with the growth of fast food chains, organized food unions, and food outlets.
• People are increasingly using the expanding number of cafes offering food and alcohol for gatherings and parties. Traditional cafes and lounges are often renovated by market players in the restaurant business, turning them into themed establishments that draw more customers than older ones. Additionally, several chains and restaurants are enhancing their online presence to broaden their clientele and boost sales.
• Online portals like UBER Eats, Zomato, Swiggy, and others are helping players in the restaurant industry increase the number of delivery orders and takeaways. According to the survey analysis, in urban areas, 52.2% of consumers prefer to receive home food delivery through online ordering.
• Improving connectivity services and smartphone penetration in major economies is vital for consumers to order food and drink online. Today, consumers are overwhelmed by the limitations of their lifestyle and have little time to cook, so they look for functional food. The demand for the disposable packaging market is hence growing continuously. On the other hand, new entrants to the packaging market are competing fiercely with existing players due to improved business models and innovative food menus.
• New players are focusing on digital channels to reach consumers and are primarily focused on branding. Federal authorities are also adjusting their regulatory landscape to ensure the quality of food and services restaurateurs provide.

The market players are embracing several business strategies to gain a competitive edge over others. As the consumption of niche beverages, such as frozen, blended, and mixed, is increasing, the demand for cost-effective, high-quality, single-use disposable solutions is also growing. Players in the market are adopting strategies like product innovation and mergers and acquisitions to increase their market offerings and stay competitive in the market landscape. The market is fragmented in nature. Some of the prominent players operating in the market are Huhtamäki Oyj, Falcon Pack, Berry Global Inc., and Pactiv Evergreen Inc., among others.

In November 2022, Huhtamaki expanded its paper-based packaging capacity at its factory in Nules, Spain. The extension, which is expected to commence production in January 2023, represents a EUR 20 million (USD 21.25) investment and will double the site’s capacity. The investment includes a grant of EUR 2.2 million (USD 2.3) from the Conselleria de Hacienda y Modelo Economico (Community of Valencia).

In May 2022, Hotpack Global, the world’s leading manufacturer of disposable food packaging products, announced a regional expansion in Morocco, joining hands with the retail leader of the African nation, Retail Holding, through its investment arm, Best Financiers.

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