April 14, 2020 by Jennifer Nastu

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As industrial companies continue to demand sustainable packaging alternatives, the US molded pulp packaging market is forecast to grow 6.1% annually, reaching $1.3 billion in 2024, according to a new study. The foodservice market will see the largest increases.

While near-term supply and demand disruptions will result from the covid-19 pandemic, a quick return to strong growth is expected as the effects of the virus subside, the Freedonia Group predicts.

Long-term Growth Expected Due to Performance, Sustainability Advantages

Molded pulp’s environmental advantages include recyclability, biodegradability, and the ability to be composted in industrial facilities, according to the study. Additionally, molded pulp packaging benefits from:

  • performance advantages, including excellent cushioning, bracing and blocking;
  • the development of molded fiber products that are more competitive with plastic alternatives in terms of cost, performance, and aesthetics;
  • backlash against single-use plastic products manufactured from expanded polystyrene (EPS) foam, as well as bans on certain EPS foodservice products in a growing number of cities.

Over the long term, the fastest annual sales increases are projected for the foodservice market, as restaurants and other eating establishments increasingly invest in environmentally friendly molded pulp clamshells, plates and bowls, and lunch trays for delivery, takeout, and for serving food.

Covid-19 Pandemic Impacts the Market in the Short Term

Despite strong growth projections, the covid-19 pandemic is having a significant near-term impact on the US molded pulp packaging market. Growth has slowed because:

  • governments have ordered the closure of nonessential businesses, including many restaurants and bars, which are intensive users of molded fiber clamshells, plates, bowls, and other foodservice products;
  • social distancing protocols have led to slower output among major global producers, particularly China, where many molded pulp packaging products used in the US are manufactured.

Nevertheless, according to the report, continued use of drive-thru and carryout foodservice and grocery stores will help sustain sales during the crisis. And a boost in online shopping among self-isolating consumers has the potential to drive up sales of molded pulp protective packaging.