Projected to hit US$ 958.4 million in 2022, the global foodservice paper bags market is poised to grow at a Compound Annual CAGR of 5.1% is projected for the years 2022–2032. This market sector is predicted to grow to US$ 1,575.9 million by the end of 2032. A number of causes, including as the growing need for takeout and delivery services in the foodservice industry, strict legislation encouraging sustainability, and consumer preference for eco-friendly packaging solutions, are driving the rapid expansion. Paper bags are becoming a more popular choice for packaging solutions as companies adjust to shifting consumer preferences and environmental concerns.

At first, the foodservice sector used conventional plastic bags to convey food items to customers. However, government initiatives and plastic consumption prohibitions have prompted a change towards sustainable practices, which has created new opportunities for the worldwide foodservice paper bag market to flourish. In line with the growing preference for environmentally conscious solutions in the food business, it is projected that the creation of multiple foodservice outlets worldwide will drive higher demand for foodservice packaging, with a special emphasis on eco-friendly options like foodservice paper bags.

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The foodservice paper bag market has shown steady growth with a CAGR of 4.1% from 2015 to 2021. It is poised for further expansion in the future, driven by factors such as heightened environmental concerns, government regulations, and the overall growth of the foodservice industry.

Market Drivers:

1. Environmental Concerns: Growing awareness about environmental sustainability and the adverse effects of plastic pollution have fueled the demand for eco-friendly packaging options like paper bags in the foodservice industry.
2. Government Regulations: Stringent regulations imposed by governments worldwide to reduce plastic usage and promote sustainable packaging solutions have pushed foodservice establishments to adopt paper bags as an alternative.
3. Consumer Preference: Increasing consumer preference for recyclable and biodegradable packaging materials has led foodservice providers to switch from plastic to paper bags to meet consumer demands and enhance brand image.
4. Brand Image and Corporate Social Responsibility (CSR): Many foodservice companies are incorporating sustainable practices into their operations to improve their brand image and fulfill their CSR goals, driving the adoption of paper bags as part of their sustainable packaging strategies.
5. Advancements in Paper Bag Manufacturing: Technological advancements in paper bag manufacturing processes have led to the development of stronger, more durable, and moisture-resistant paper bags, making them suitable for various foodservice applications.
6. Growth in Food Delivery Services: The proliferation of food delivery services, particularly in urban areas, has boosted the demand for convenient and eco-friendly packaging solutions like paper bags to package and deliver food orders.

Market Restraints:

1. Higher Cost: Paper bags generally have a higher manufacturing cost compared to plastic bags, which can pose a challenge for foodservice providers, especially smaller businesses, in terms of cost competitiveness.
2. Limited Durability and Strength: Despite advancements in paper bag manufacturing, they may still lack the durability and strength of plastic bags, limiting their suitability for certain types of food items or transportation methods.
3. Moisture Sensitivity: Traditional paper bags are susceptible to moisture absorption, which can compromise the integrity of the packaging and the quality of the food products, especially in humid or wet conditions.
4. Supply Chain Challenges: Ensuring a consistent and reliable supply of high-quality paper materials for bag manufacturing can be challenging, particularly when demand fluctuates or during periods of increased competition for resources.
5. Perception of Convenience: Some consumers may perceive paper bags as less convenient than plastic bags due to factors such as their tendency to tear or lose shape when carrying heavy or bulky items.
6. Resistance to Change: Despite growing awareness of environmental issues, some foodservice providers may be reluctant to switch from traditional plastic bags to paper bags due to inertia, perceived inconvenience, or concerns about customer acceptance.

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Key Takeaways

• Brown kraft-based paper bags are expected to account for more than 4/5th of market value, owing to their stiffness.
• Non-handle bags will remain the most sought type, capturing nearly 2/3rd of market value, backed by their convenience and low cost.
• On the basis of end-use, restaurants are poised to capture more than half of overall global value, ascribed to the rising trend of take-away.
• Europe is projected to spearhead the regional landscape of the market, capturing more than 1/3rd of market value.
• East Asia will prevail as the second most lucrative regions through the forecast period, holding a quarter of the market value.

Key Players:

• WestRock Company
• Hutamaki Oyj
• Novolex Holdings LLC
• Ronpak Inc.
• Mondi Group
• Amcor Ltd
• International Paper Company

Competitive Landscape

Major players operating in the global foodservice paper bags market are trying to expand their capacities by developing their facilities. Also, several key players are adopting the merger and acquisition strategy to strengthen and increase their resources. These players are focusing on developing innovative paper bags to gain more market shares.

Some of the latest developments by key players are as follows–

• In August 2022, Novolex Holdings LLC announced the launch of innovative paper bags for more secure deliveries for retailers and restaurants. The paper bag offers a wide opening for easy loading, a flat bottom to keep items secure, and sturdy paper twist handles for easy reliable carrying.
• In March 2022, WestRock Company expanded its production facility by investing US$ 47 Million at its consumer facility in Claremont.
• In January 2022, Huhtamaki Oyj acquired a company named Smith Anderson Group Ltd. in Portland. The company manufactures and sells paper bags in Eastern Europe.

Foodservice Paper Bags: Impact on the Food Industry

The Foodservice Paper Bags Market’s impact extends beyond its eco-friendly nature. These bags offer practical advantages to both businesses and consumers:

• Heat Retention: Insulated paper bags are excellent at retaining heat, making them a preferred choice for delivering hot foods like pizzas and other takeout orders.
• Breathability: Paper bags allow food to breathe, preventing sogginess in products like fried items and maintaining their crispness.
• Branding and Advertising: Customized paper bags serve as mobile advertisements, showcasing a brand’s identity to potential customers as they’re carried around.
• Consumer Preference: As consumers become more conscious of their environmental footprint, businesses that offer sustainable packaging options like paper bags gain a competitive edge.

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Key Segmentations:

By Material Type:

• Brown Kraft
• White Kraft

By Bag Type:

• Handle Bags
• Non-handle Bags

By End User:

• Foodservice Outlets
• Online Food Delivery
• Institutional

By Region:

• North America
• Latin America
• Europe
• South Asia
• East Asia
• Middle East Africa
• Oceania

About Future Market Insights (FMI)

Future Market Insights, Inc. (ESOMAR certified, recipient of the Stevie Award, and a member of the Greater New York Chamber of Commerce) offers profound insights into the driving factors that are boosting demand in the market. FMI stands as the leading global provider of market intelligence, advisory services, consulting, and events for the Packaging, Food and Beverage, Consumer, Technology, Healthcare, Industrial, and Chemicals markets. With a vast team of over 5000 analysts worldwide, FMI provides global, regional, and local expertise on diverse domains and industry trends across more than 110 countries.

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