While it saw a significant rise in adoption during and after the pandemic, demand for sustainable packaging is starting to wane in Asia, GlobalData has said, due to inflation taking centre stage.
“Sustainable packaging initiatives have been driven by consumer awareness, corporate commitments to prove green initiatives, and regulation,” commented Reddy Bokkala, lead consumer analyst at GlobalData. “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.”
Importance of sustainable packaging
GlobalData’s latest consumer survey, covering Asia and Australia, found that less than a third of respondents now say that it is ‘essential’ that the products they purchase use recyclable packaging, while 47% see it as a ‘nice to have’.
Elsewhere, 17% of respondents said that recyclable packaging – or reducing packaging waste – was ‘not necessary’ to their purchase decision, with 5% answering don’t know/not sure.
“Asian consumers are generally enthusiastic about embracing products with sustainable packaging credentials,” Reddy Bokkala continued. “Conversely, they are highly concerned about high inflation and economic uncertainty, making them more pragmatic with their purchase decisions.
“With the paradox of supporting sustainable initiatives and scouting for cheaper prices, consumers are in a dilemma.”
When asked how they are ‘coping with rising prices in general’, 58% of the respondents to GlobalData’s survey said that they were ‘checking/comparing prices online prior to purchase’, with 46% ‘switching to cheaper brand alternatives’, and 36% ‘switching to cheaper stores/cheaper outlets’.
Higher pricing
“Sustainable packaging materials are generally priced higher than traditional packaging materials,” added Deepak Nautiyal, consumer and retail commercial director, APAC and Middle East at GlobalData. “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.”
Nautiyal added that the economic pressures that are persisting around the world mean that it is “not the best time to coax consumers to spend more on something that may not have a tangible benefit”.
GlobalData’s 2024 Q2 Consumer Survey – Asia and Australasia, which was published in July 2024, featured 6,506 respondents. Read more here.
