Sustainable Packaging Efforts In Asia Take Backseat; Innovation Offers Paths Forward Inflation is the challenge that is eating up the margins of most of companies in the packaging business in Asia and causing them to find ways to survive or exist to keep their position in the market.

Sustainable packaging has been gaining pace, and the trend became even more prominent during the COVID-19 pandemic when people became more aware. However, right when sustainable packaging is gaining critical mass, the high inflation since 2022 seems to be sapping Asian consumers' enthusiasm, said GlobalData, a data and analytics company.

Parthasaradhi Reddy Bokkala, Lead Consumer Analyst, GlobalData said: "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. 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."

In the backdrop of findings in the report, industry highlighted the challenges faced by them. Inflation is the challenge that is eating up the margins of most of companies in the packaging business in Asia and causing them to find ways to survive or exist to keep their position in the market.

Raghunandan Saraf, CEO and Founder, Saraf Furniture said that a number of companies are now adopting operational efficiency through a redesign of their manufacturing techniques to try to experience cost reduction in the most quality-effective way. This also involves huge investments in automation and new digital technologies, which help to boost manufacturing and supply chain operations.

"For most packaging suppliers, price increases have become key, as firms cautiously gauge the need to recoup rising costs versus the peril of losing price-sensitive customers. These price hikes are being made justifiable with the provision of some value-added features and services," he said.

According to him, consolidation of industries has increased, with large companies buying smaller companies to achieve scale economies and get better bargains on the price of raw materials. Other businesses are also diversifying to their product line to reduce the risk and maximize segments.

"However commendable these efforts are, the fact remains that the message on sustainable packaging has in many cases been pushed to the back burner as companies strive for short-term financial stability in contrast to long-term environmental goals," he added.

Ridhima Kansal, Director, Rosemoore highlighted number of challenges including cost of raw materials rise, transportation rates labour costs due to inflation.

"Firms have started adopting automation and digital technologies like AI and machine learning which has made it easier for them to streamline their production processes, reduce their labour costs and improve their overall energy usage level since companies operate leaner than before in a bid to cut expenses amid rising inflationary pressures. Packaging firms are also increasingly putting material innovation first; they are turning towards eco-friendly plastics among others such as compostable plastics produced from cornstarches or sugar cane pulps that can be utilized as food packagings or bags rather than recycling conventional polymers such polyethylene terephthalate (PET)," she said.

Deepak Nautiyal, Consumer and Retail Commercial Director, APAC and Middle East at GlobalData said, "Sustainable packaging materials are generally priced higher than traditional packaging materials. They require special manufacturing processes to be acceptable to consumers. However, these processes increase the costs of the material. 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."

Among these issues due to inflation, what could be the solution for affordable sustainable packaging?

Pankaj Prakash Sharma, Founder and CEO, Happa Foods said that affordable sustainable packaging is within reach if we focus on smart material science and design innovations, combined with collaboration across the industry.

"We've already seen plastic straws and plates being replaced with more sustainable, paper-based alternatives. The industry is making strides with other materials too, like biodegradable plastic bags that break down more easily in the environment. By investing in scalable solutions like these, adopting digital printing to reduce waste, and advocating for policies that support green initiatives, companies can continue to create cost-effective, eco-friendly packaging even when inflation is putting on the pressure. We're seeing more of these innovations come to market, and there's a strong push to replace even more plastic products with sustainable options in the near future," he said.

Meanwhile, Suresh Bansal, Founder & CEO, DCGpac said that one should innovate with biodegradable materials that are both cost-effective and eco-friendly to address the challenges due to inflation.

He said that companies can also explore the use of lightweight packaging that reduces material usage and transportation costs. Additionally, investing in reusable packaging systems or collaborating with suppliers for bulk purchasing can mitigate inflationary pressures.

"We believe in the power of a circular economy and actively work towards it. We have incorporated recycling principles from Japan and Europe into our operations, focusing on reducing waste and maximising resource efficiency. By rethinking traditional packaging strategies and prioritising sustainability, we can help businesses maintain their commitment to the planet while keeping expenses in check," Bansal added.