Environmental sustainability isn’t what it once was. Policy is changing, with many of the EU’s flagship sustainability regulations simplified, delayed or in question. Amid a cost-of-living crisis, even many consumers have lost interest.
This is not the case in packaging. The eco-friendly packaging market is booming, with Grand View Research predicting a compound annual growth rate (CAGR) of 7.6% between 2025 and 2030. This would mean the market will be worth $353.78 billion (€301.53bn) by 2030.
A new report on packaging by consultancy McKinsey & Company suggests that the trend is being driven by Generation Z.
Do people still want sustainable packaging?
People in Gen Z, especially those with a higher income, have been found to be more willing to fork out for sustainability in packaging than their older counterparts.
For example, those willing to pay “a lot more” for sustainable packaging varies by age. Twenty-five per cent of high-income Gen Z consumers in Germany are willing, for example, compared to 1% of high-income Gen X. The average for Germany is 8%.
“Our research shows that while younger and higher-income consumers are willing to pay premiums, there is no one-size-fits-all solution. Brand owners and packaging producers must take a data-driven and proactive approach to meet these nuanced and evolving demands,” explains Daniel Nordigården, partner at McKinsey.
Overall, in all the European countries surveyed – Germany, Italy, Sweden, the UK and France – willingness to pay “a lot more” had all increased since 2023, whereas willingness to pay “a little more” had decreased slightly in France.
All consumers surveyed also put the onus on brand owners and brand producers, rather than shoppers themselves, to drive sustainability in packaging.
In the UK, 37% said it was the responsibility of brand owners and 29% said packaging producers; in Germany, 22% said brand owners and 38% said packaging producers; and in France, 26% put responsibility with packaging producers and 37% with brand owners. These two categories predominated in every country.
What factors trump sustainability in packaging?
Despite the success of sustainability among Gen Z, the trend is still low overall.
Price and quality continue to be the overall most important factors that influence purchasing decision, with the former having grown in importance even more lately.
In terms of packaging specifically, food safety and shelf-life are the two most prominent, with food safety ranking first for almost all the countries surveyed.
In contrast, environmental impact ranked sixth out of seven factors for all 11 countries surveyed, and its relative importance has either stagnated or trended downwards.
Nevertheless, sustainability as a concern has not actually declined – the share of consumers that care about it has remained steady. What has changed is that other factors, such as price, are gaining more attention.