Sustainable Packaging takes backseat in Asia amid inflation concerns: GlobalData
23 August 2024: Sustainable packaging has been gaining pace, and the trend became even more prominent during the COVID-19 pandemic when people became more aware. However, right when sustainable packaging is gaining critical mass, the high inflation since 2022 seems to be sapping Asian consumers’ enthusiasm, says GlobalData, a leading data and analytics company.
Parthasaradhi Reddy Bokkala, Lead Consumer Analyst at GlobalData said “Sustainable packaging initiatives have been driven by consumer awareness, corporate commitments to prove green initiatives, and regulation. Given the multiple factors encouraging sustainable packaging, manufacturers have increased their investments. With all-round support, sustainable packaging has been trending, especially since COVID-19 pandemic, when consumer awareness increased. However, the high inflation since early 2022 has been a dampener for these initiatives.”
Deepak Nautiyal, Consumer and Retail Commercial Director, APAC and Middle East at GlobalData adds “Sustainable packaging materials are generally priced higher than traditional packaging materials. 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.”
Reddy adds “Asian consumers are generally enthusiastic about embracing products with sustainable packaging credentials. 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.
“Consumers’ confusion can be gauged from a recent GlobalData consumer survey, wherein nearly a third (31%) of respondents opined that recyclable packaging is an essential feature when purchasing products. Conversely, 58% of them responded that they are checking or comparing prices before a purchase, while 46% stated that they are switching to cheaper brands.”
Nautiyal concludes “With consumers in a dilemma between their choice for sustainable packaging and their pursuit of cost savings, sustainable packaging manufacturers face significant challenges in the coming years. While inflationary pressures have mostly eased, the volatile geopolitical situation across the world is leading to economic uncertainty, which is not the best time to coax consumers to spend more on something that may not have a tangible benefit. As such, sustainable packaging initiatives will be adversely impacted in the immediate future.”
*GlobalData 2024 Q2 Consumer Survey Asia and Australasia, published in July 2024, with 6,506 respondents.
www.globaldata.com
