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The value of the $98.6 billion sustainability driven returnable packaging market that relies on plastic packaging will grow 6.2% yearly through the end of the decade.

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“Many happy returns” is an apt description for the returnable packaging market for materials and structures systematically reused within logistics operations.

It’s packaging that’s essential for supply chains in markets and industries globally including for ecommerce. Specific types of returnable packaging include pallets, crates, intermediate bulk containers (IBC), drums, barrels, racks, dunnage, and bottles.

The market is forecast to grow from $98.6 billion in 2022 to $170.93 billion in 2029 with a 6.2% CAGR, according to a recent report from Exactitude Consultancy.

Materials used to manufacture returnable packaging are durably constructed to tolerate weather extremes and rough handling. Materials include wood, plastic, and metal, as well as glass and foam.

According to the report:

  • Plastic returnable packaging is expected to experience a 63.4% CAGR during the forecast period, the highest growth rate of all materials.

  • In 2022, pallets were the most prevalent form of returnable packaging, with 57% market share and revenue of $33.84 billion.

  • The food and beverage industry controlled the largest share of the returnable packaging market in 2022, with 43% share and revenue of $41.58 billion.

The tipping point for returnable packaging is determined case-by-case by individual companies considering the higher up-front costs versus the longer-term payback to achieve those profitable “many happy returns” over time.

Regulations support sustainability and growth in returnable packaging.

Growth drivers for the market will include rising demand for sustainable packaging and government regulations including in the US supporting environmentally friendly packaging. Because returnable packaging is reused, it is more sustainable than single-use plastic packaging.

Returnable packaging can be part of a circular economy model and minimizes packaging waste, which is a key goal for a growing number of organizations.

A global survey conducted by McKinsey reveals that 66% of business-to-business and industrial companies and 80% of consumer goods companies have made sustainable-packaging commitments. Additionally, 60% of companies claim to be working on recyclable or reusable materials.

Restraints on growth include the high capital expenditure required to install a returnable packaging system. And although the cost per trip is lower for returnable packaging than for single-use packaging, the cost of the return trip adds to operational costs.

Thus, most small- and medium-size companies, which constitute the bulk of the potential market for returnable packaging, cannot justify the added up-front costs.

Developing countries, ecommerce offer major opportunities for returnable packaging.

Opportunities for providers of returnable packaging are expected to occur in developing economies, where increased urbanization and greater disposable income are fueling consumer demand for durable goods and food/beverage products. Expanded internet availability and ecommerce sales will support ongoing consumer demand.

The long-range economics of returnable packaging, specifically lower operating costs leading to higher profit margins, will contribute to the adoption of returnable packaging in these locations.

A key challenge, however, will be to integrate returnable packaging with existing supply chain logistics. Currently, supply chains are geared to single-use packaging and lack processes for returning packaging to the supplier.

Storage and administration of returnable packaging will need to be simplified and integrated into supply chains to overcome this challenge.

About the Author(s)

Rick Lingle

Senior Technical Editor, Packaging Digest and PlasticsToday

Rick Lingle is Senior Technical Editor, Packaging Digest and PlasticsToday. He’s been a packaging media journalist since 1985 specializing in food, beverage and plastic markets. He has a chemistry degree from Clarke College and has worked in food industry R&D for Standard Brands/Nabisco and the R.T. French Co. Reach him at [email protected] or 630-481-1426.

Kate Bertrand Connolly 1

Freelance Writer

Kate Bertrand Connolly has been covering innovations, trends, and technologies in packaging, branding, and business since 1981.

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