Bans on plastic retail bags are becoming ubiquitous worldwide, as more and more cities, states and even countries climb on the ban wagon. In fact, according to the latest study from the Freedonia Group (Cleveland), the number of local and state regulations targeting plastic bags has accelerated dramatically since 2016—eight statewide bans and nearly 500 local regulations—and more are on the way in 2020.
The impact of bans is immediately apparent in areas where they are enacted, although the results are not always as predicted. According to Freedonia, while single-use plastic retail bag usage will continue to decline through 2023, overall U.S. sales of retail bags in value terms is forecast to grow 4.7% per year to $42 billion in 2023 because of a significant rise in prices. The increasing regulation of single-use products is leading to significant changes in industry composition and outlook.
The main beneficiaries of single-use bans are paper bags and higher-gauge reusable plastic bags; newer types of natural-fiber bags, such as those based on hemp, are also seeing growth. As more research is conducted on the impact of bans, however, concerns are being raised about whether these alternatives truly have a better overall environmental footprint than the plastic bags they are replacing.
Due to disagreement on the best way to solve the problem of single-use plastic bags, there are now more states pre-empting plastic bans than those which have them. Part of the problem is that there is little agreement on what constitutes a reusable bag. The definition of a reusable bag continues to be up for debate, making it difficult for manufacturers to plan future capacity requirements.
While single-use bags receive a great deal of criticism, these bags are often reused in a number of ways, including car garbage receptacles, diaper disposal, disposal of messy or smelly kitchen waste, garbage-can liners, lunch bags, packing or transporting wet or dirty shoes or clothing, and pet waste disposal. “Many consumers keep a supply of these bags in their homes for these uses, ensuring that they will get a second or even third use before finding their way to the garbage and eventually a landfill,” said the report.
The Freedonia Group’s study shows that single-use plastic bag bans carry some unintended consequences that regulators must take into account when creating policy. Without a store of single-use bags on hand, consumers who are accustomed to reusing them for garbage or pet waste, can liners, and so forth are likely to purchase bags for these specific uses, incurring a new expense and continuing to add non-biodegradable plastic to the garbage problem.
Growth in market value for retail bags will come almost entirely from a shift in the product mix toward higher priced bags that meet regulatory requirements, said Freedonia. The number of bags used will stagnate at about 106.5 billion, with growth in the foodservice market offsetting declines in other retail sectors. Strong growth in paper and heavier gauge reusable plastic bags will somewhat offset losses in the single-use HDPE t-shirt bag segments.
While demand for paper bags has seen a sharp increase because of plastic bag bans, U.S. producers are having a hard time ramping up capacity. Additionally, the Freedonia report notes that there is ongoing debate about whether paper is really the best choice for the environment, especially in applications like groceries, where heavy paper bags are required and suitable reusable bag choices are available. Paper bags that replace plastic use more material, boosting the net amount of material disposed, an unintended consequence of plastic bag bans.
Freedonia points out that over the past decade, reusable polypropylene bags have experienced rapid growth, especially in the grocery market. Fast growth is also expected for reusable polyethylene bags made in gauges over 2.25 mil, the gauge most commonly specified in regulations.
The Freedonia Group’s new Retail Bags study analyzes the U.S. retail bag market, presenting historical demand and forecasts for 2023 and 2028 for single-use and reusable bags by material (plastic, paper, natural fiber) and market (grocery, foodservice, other retail). The study also analyzes regulatory trends , provides company market share by material and includes analysis on industry participants.
Image courtesy Freedonia Group