How Biodegradable Packaging Can Create New Opportunities in the Biobased Economy

Global consumers now produce 3.5 million tons of garbage per day. Projections for where we’re headed are even more alarming: by the year 2025 that rate is expected to climb to six million tons per day, and reach 11 million tons by the year 2100. About 25 percent of this waste is generated in America and one-third of that is packaging, which can sit in landfills for hundreds to thousands of years before decaying. Non-biodegradable packaging hurts the environment at both ends of its life cycle. When non-biodegradable packaging is created, it generates pollution and uses petroleum and other non-renewable resources. Then when non-biodegradable packaging reaches the end of its life, it is discarded and creates waste that can disrupt ecosystems and sit for hundreds of years.

Both biobased and biodegradable materials help alleviate this problem. Biobased products are derived from renewable materials and offer an alternative to conventional petroleum-based products. Biodegradable materials are able to completely break down and decompose into natural elements within a short time after disposal (typically a year or less), with the help of biological agents such as fungi and bacteria. Some materials, known as “compostable materials,” actually provide nutrients to the environment when they break down. Examples of biodegradable materials include paper products such as corrugated cardboard, cotton, and plant fiber. Non-biodegradable materials, on the other hand, do not have the ability to break down or decay quickly. Examples of these materials include glass, plastic, medical waste, metal, and electronic devices, which can sit for hundreds or even thousands of years taking up room in landfills.

Biobased products are becoming increasingly popular with consumers, and companies that cater to consumers’ sense of environmental responsibility have seen significant benefits in their bottom lines. Through the use of targeted marketing strategies, these companies are creating a larger, more loyal consumer base while improving their public perception. Additionally, biobased business operations provide the farmers and manufacturing workers of rural America with new income streams and job opportunities. In 2014, the biobased products industry added $393 billion and 4.2 million jobs to America’s economy. As such, the United States Department of Agriculture (USDA) should look for greater opportunities to advocate for biobased packaging. The growth of the biodegradable packaging industry would reduce the negative impact humans have on the environment, add billions of dollars to the American economy, and generate millions of jobs across rural America.

Biodegradable Packaging Business Opportunities

Market opportunities for biobased products are being enhanced by the USDA, which promotes these products through its implementation of mandatory federal purchasing and its BioPreferred® Program. As contained in the 2002, 2008, and 2014 Farm Bills, as well as Executive Order 13693, federal law directs all federal agencies and their contractors to purchase biobased products within specific categories outlined by USDA. Currently, a portion of purchases in 97 categories (paints, carpet, cleaners, etc.) must be of biobased products. For example, “U.S. military bases across the nation are using biobased products — everything from bedding, towels and sheets to soaps and cleaners for military equipment”. The percentage of renewable material required varies by product category.

USDA’s BioPreferred® Program has also implemented a product certification and labeling program for biobased products. Companies with biobased products voluntarily submit their product information in order to qualify for a “USDA Certified Biobased Product” label. Currently, a product needs to be composed of at least 25% renewable materials to be awarded the label, but that proportion is expected to increase as the program gains traction. Similar to the positive product differentiation gained by other USDA labels, such as “USDA certified organic” or “USDA Prime beef,” qualifying for USDA’s biobased label promotes the increased sale of products derived from renewable resources.

Sample of USDA Certified Bio Based Product Label

The USDA has also developed what is known as the BioPreferred® Program Catalog, which assists users in identifying products that qualify for mandatory federal purchasing or have been certified through USDA’s labeling initiative. Companies producing “green” products such as biodegradable packaging can significantly increase sales by becoming eligible for high-volume contracts from the federal government and by accessing potential customers that shop using USDA’s BioPreferred® Program Catalog.

The USDA has encouraged the broad use of biobased products and should now focus on opportunities to promote the purchase and use of biodegradable packaging. Biodegradable packaging is able to conform to the needs of consumers while reducing the impact the product has on the environment. A great example of this is plant fiber food packaging, which has become increasingly popular and provides many business opportunities. Food packaging accounts for over 65% of the biodegradable packaging market, which is expected to rise from $4.9 billion in 2016 to around $11 billion by 2021. Plant fiber food packaging can be made from numerous plant species including bamboo, wheat straw, sugar cane, and bulrush. Unlike their plastic and Styrofoam counterparts, these compostable, eco-friendly containers are non-toxic and won’t sit in landfills for hundreds of years. Plant fiber food packaging can even be designed to be fully soak-proof and safe for use in microwaves and ovens.

Another great use of biodegradable packaging would be to limit the amount of discarded plastic bottles that pollute the environment. Americans alone throw out over 35 billion plastic bottles a year, enough plastic bottles to wrap around the Earth over 185 times. In an effort to reduce the amount of plastic being discarded each year, a student in Iceland developed a water bottle made out of a material called agar, a substance derived from algae. While this bottle retains its shape while full of water, its novelty stems from its ability to decompose after it has been emptied. The bottle is made of all-natural materials and is edible (to anyone that enjoys the taste of algae!). While the algae-based bottle is still being perfected before being introduced to the market, companies who utilize this type of packaging can ensure consumers that their products won’t be adding any waste to the environment after they have been enjoyed. Algae-based bottles are one of many potential innovations capable of tapping into the global beverage packaging market valued at $112.4 billion in 2016.

Ensuring the Future of Biodegradable Packaging

The USDA should utilize its resources to ensure the success of the biodegradable packaging market. In 2014 alone, the growth of the biobased sector displaced the use of 300 million gallons of petroleum and reduced the unemployment rate of rural America to below 6%. The increased use of biodegradable packaging would further reduce our nation’s carbon footprint and unemployment rate. The USDA should make companies aware that their participation in the biodegradable packaging market would not only benefit the environment: they can also gain economically through resulting positive press, the ability to participate in USDA’s BioPreferred® program, and by winning a larger, more loyal consumer base.

Going Green and Implementing Biodegradable Packaging

Deloitte assists companies ready to utilize biodegradable packaging. BIO by Deloitte is an integrated part of Deloitte’s agribusiness professional network and is dedicated to creating sustainable performance for our clients. We have experience:

  • Helping clients asses the sustainability of innovative bio-material packaging systems and determine whether packaging strategies can be implemented economically and efficiently into current supply chains
  • Executing comparative lifecycle assessments of bio-based/oil based packaging systems
  • Performing market analyses on biobased materials

The BIO by Deloitte team has engaged in research leading to the creation of new knowledge, methods, and innovations in the fields of the environment and health. Together with our clients we discover and create innovative solutions for the challenges of the coming decades.

Chris Wiebalk, Mark Weatherly, and Toby Osherson contributed to this piece.