North America Compostable Packaging Market Size, Share, and Trends Analysis Report – Industry Overview and Forecast to 2032

Compostable Packaging Market Size

• North America compostable packaging market size was valued at USD 1.32 billion in 2024 and is expected to reach USD 4.60 billion by 2032, at a CAGR of 16.90% during the forecast period
• The market growth is largely fueled by increasing environmental awareness and stringent government regulations aimed at reducing plastic waste, prompting industries and consumers to shift toward eco-friendly and compostable packaging alternatives
• Furthermore, the rapid expansion of the food delivery and e-commerce sectors, especially in emerging economies, is driving demand for sustainable packaging solutions that are both functional and biodegradable, significantly accelerating market adoption

Compostable Packaging Market Analysis

• Compostable packaging, designed to naturally decompose into non-toxic components, is gaining significant traction across industries due to rising environmental concerns, government regulations on single-use plastics, and the growing demand for sustainable alternatives in both consumer and industrial packaging applications
• The escalating demand for compostable packaging is primarily fueled by increased environmental awareness among consumers, expanding e-commerce and food delivery services, and a rising preference for biodegradable and eco-friendly packaging materials over conventional plastics
• The U.S. dominated the compostable packaging market with the largest revenue share in 2024, driven by advanced packaging technologies, strong regulatory frameworks promoting sustainability, and growing consumer preference for eco-friendly packaging solutions
• Canada is expected to be the fastest-growing market for compostable packaging during the forecast period, owing to nationwide bans on single-use plastics, rising environmental awareness, and supportive federal and provincial initiatives encouraging compostable alternatives across industries
• The Bags segment held the largest market share in 2024, valued at approximately USD 9.6 million, driven by its widespread application across retail, food service, and grocery sectors, increasing bans on conventional plastic bags, and rising consumer preference for compostable carry solutions

Report Scope and Compostable Packaging Market Segmentation    

Compostable Packaging Market Trends

“Rising Innovation in Biopolymer Materials and Composting Infrastructure”

• A significant and accelerating trend in the North America compostable packaging market is the rapid advancement in biopolymer innovation—particularly materials such as PLA (Polylactic Acid), PHA (Polyhydroxyalkanoates), and starch blends—which offer enhanced durability, compostability, and versatility across various packaging applications. These innovations are helping bridge the performance gap between traditional plastics and compostable alternatives, enabling broader adoption in food & beverage, healthcare, and retail sectors 
  • For instance, NatureWorks LLC has expanded its Ingeo™ PLA biopolymer line, engineered for high-heat resistance and superior clarity—attributes ideal for food packaging applications such as clamshells and cold drink cups. Similarly, Futamura Group’s NatureFlex™ films continue gaining traction due to their high barrier properties and certifications for both industrial and home composting
• In parallel, infrastructure developments such as municipal composting programs, decentralized compost systems, and collaborations between local governments and packaging suppliers are transforming waste management in the region. Several U.S. states and Canadian provinces are piloting curbside composting initiatives and formalizing guidelines for compostable packaging in public waste systems
• Another major trend is the branding shift toward environmental responsibility. Companies are increasingly leveraging compostable packaging for sustainability positioning, using visible eco-labels, minimalist print designs, and biodegradable features to appeal to the environmentally conscious consumer—especially in urban areas across the U.S. and Canada

Compostable Packaging Market Dynamics

Driver

“Government Bans and Corporate Commitments to Sustainability”

• One of the primary drivers for compostable packaging growth in North America is increasing government action to curb single-use plastics. Legislation such as Canada’s ban on harmful single-use plastics and various U.S. state-level restrictions (e.g., California, New York, Washington) are catalyzing a swift market shift towards compostable alternatives 
  • For instance, the U.S. Plastics Pact and Canada’s Zero Plastic Waste Strategy are encouraging the industry to replace conventional plastic packaging with compostable solutions. This regulatory push is being reinforced by voluntary corporate goals. Major brands such as Unilever, Nestlé, and PepsiCo have pledged to use only recyclable, compostable, or reusable packaging by 2025–2030, accelerating innovation and adoption across the supply chain
• These efforts are supported by growing environmental awareness among consumers and increasing public and private investments in industrial composting facilities and waste-sorting technologies that improve collection and disposal efficiency

Restraint/Challenge

“Lack of Composting Infrastructure and High Cost of Materials”

• A critical challenge faced by the North American compostable packaging market is the insufficient availability of industrial composting infrastructure. Many urban and rural areas in the U.S. and Canada lack certified composting facilities, which makes it difficult for compostable materials to be disposed of correctly, thereby negating their environmental benefits
• As a result, compostable packaging often ends up in landfills or incinerators, where it fails to break down properly, leading to skepticism among consumers and limited adoption by businesses
• Furthermore, the high cost of raw materials—such as PLA and PHA—compared to traditional petroleum-based plastics restricts use among price-sensitive businesses, especially small and medium-sized enterprises (SMEs)
• To overcome these issues, coordinated efforts are needed, including policy-driven investment in composting infrastructure, subsidies or tax incentives for sustainable packaging adoption, and R&D into locally sourced, affordable bio-based materials that can meet performance requirements while lowering costs

Compostable Packaging Market Scope

The market is segmented on the basis of product type, material, packaging layer, distribution channel, and end-user.

• By Product Type

On the basis of product type, the North America Compostable Packaging Market is segmented into bags, trays, cups, plates, films, lids, straws, cutlery, bowls, clamshells, pouches & sachets, and others. The bags segment held the largest market revenue share in 2024, primarily due to their widespread application in grocery, retail, and food delivery sectors. The surge in bans on conventional plastic carry bags across countries such as India, Thailand, and Australia has led to significant demand for compostable alternatives. Compostable bags are valued for their biodegradability, regulatory compliance, and consumer appeal, especially in eco-conscious urban markets.

The clamshells segment is expected to witness the fastest CAGR from 2025 to 2032. Their popularity is rising rapidly in ready-to-eat food packaging and takeaway services due to convenience, sturdiness, and compostability. Innovations in heat-resistant PLA-based and paper-based clamshell packaging are further contributing to this segment’s momentum.

• By Material

Based on material, the market is segmented into plastic, paper & paperboard, and others. The plastic segment dominated the market in 2024, largely driven by the extensive use of bioplastics such as PLA and starch-based polymers, which mimic the flexibility and strength of conventional plastics while offering compostable properties. PLA’s cost-effectiveness and ease of processing make it a preferred choice for mass production, especially in single-use food service applications.

The paper & paperboard segment is anticipated to grow at the highest CAGR during the forecast period. The natural biodegradability, recyclability, and aesthetic appeal of paper packaging have driven its increased usage, especially for eco-friendly branding in the personal care and F&B sectors.

• By Packaging Layer

On the basis of packaging layer, the market is segmented into primary packaging, secondary packaging, and tertiary packaging. The primary packaging segment accounted for the largest market revenue share in 2024, owing to its direct contact with products in the food, medical, and retail sectors. This includes compostable trays, cups, and pouches that maintain freshness and ensure food safety while complying with plastic reduction mandates.

The secondary packaging segment is expected to register the fastest growth during the forecast period, as brands increasingly shift to sustainable outer packaging for shipping, presentation, and branding purposes. Compostable corrugated board and molded pulp solutions are gaining traction in electronics and consumer goods.

• By Distribution Channel

On the basis of distribution channel, the market is segmented into B2B, supermarkets/hypermarkets, departmental stores, convenience stores, specialty stores, e-commerce, and others. The B2B segment held the largest share in 2024, as food chains, hospitality firms, and packaging wholesalers procure compostable packaging in bulk for operational use and resale. Partnerships between packaging manufacturers and restaurant chains, especially in urban markets of Japan and Singapore, are driving this segment.

The e-commerce segment is anticipated to witness the highest CAGR from 2025 to 2032. The growing trend of eco-friendly online shopping platforms and availability of customizable compostable packaging options through digital channels are enhancing accessibility and awareness among SMEs and startups.

• By End-User

By end-user, the market is segmented into food & beverages, medical, automotive, electrical & electronics, agriculture, textile goods, personal & home care, chemical, and others. The food & beverages segment held the dominant share in 2024, supported by the demand for eco-friendly alternatives for disposable tableware, containers, and takeaway packaging. Regulatory pressure on food service outlets and rising consumer preference for sustainable dining have fueled growth across countries such as Australia, South Korea, and India.

The personal & home care segment is expected to grow at the fastest rate during the forecast period, as cosmetic and wellness brands embrace sustainable packaging to align with their green marketing strategies. Compostable sachets and jars made from bio-based materials are gaining popularity among environmentally conscious consumers.

North America Compostable Packaging Market Regional Analysis

• The U.S. dominated the compostable packaging market with the largest revenue share in 2024, driven by advanced packaging technologies, strong regulatory frameworks promoting sustainability, and growing consumer preference for eco-friendly packaging solutions
• Manufacturers are increasingly collaborating with major foodservice and retail chains to deliver tailored compostable packaging that aligns with both environmental mandates and brand positioning. Expansion in automated compostable packaging lines is enhancing production efficiency and customization.
• Market expansion is also supported by rising venture capital investments in sustainable packaging startups and policy initiatives such as the U.S. Plastics Pact and California’s Extended Producer Responsibility (EPR) laws aimed at reducing plastic waste.

Canada Compostable Packaging Market Insight

Canada is anticipated to experience significant growth during the forecast period, propelled by the federal government’s Single-Use Plastics Prohibition Regulations and strong consumer demand for sustainable packaging. Municipal composting programs in provinces such as British Columbia and Ontario are enhancing waste processing capabilities. Additionally, collaborations between local businesses and packaging innovators are driving the development of home-compostable solutions tailored to Canadian environmental standards and consumer preferences.

Compostable Packaging Market Share

The Compostable Packaging industry is primarily led by well-established companies, including:

• International Paper (U.S.)
• Mondi (U.K.)
• BASF SE (Germany)
• Be Green Packaging HQ (U.S.)
• Futamura Group (Japan)
• WestRock Company (U.S.)
• BIOPAK (Australia)
• Amcor plc (Switzerland)
• Wuxi Topteam Co. Ltd (China)
• NatureWorks LLC (U.S.)
• Ecolifellc.com (U.S.)
• Lithey Inc. (India)
• Biotec Pvt. Ltd (India)
•  Avani Eco (Indonesia)

SKU-52321