The global packaging sector continues to be attractive and is expected to grow faster than global GDP.1 Industry demand for—or at least interest in piloting—sustainable packaging is also rising as a result of pledges by companies across the value chain to reduce material use, increase circularity, and make more use of recycled materials.2
Over the past five years, McKinsey has published more than 20 articles on the topic of packaging sustainability. With this article, we continue building on this body of insights to offer a view on developments in sustainable-packaging adaptation, taking the purchaser’s perspective. Purchasers include fast-moving consumer goods (FMCG) companies as well as retailers, private label product producers, and co-packagers.
In particular, this article seeks to understand why—despite pressures from consumers and regulators, as well as the growing body of evidence that integrating sustainability concerns can be a profitable strategy for retailers3—the adoption of sustainable packaging materials has been comparatively slow. To date, and looking across regions and end use areas, our research has not observed any major categories make a concerted shift to more-sustainable packaging. Is this slow adoption a result of “sticky” consumer preferences? Could it be margin compression among FMCG and retail companies? Or are other factors potentially involved?
To better understand these factors, we carried out primary research and conducted multiple interviews with retailers, FMCG companies, distributors, and packaging industry executives in major end user markets and across the main substrates. Our work also draws insights from our comprehensive global survey, which explores consumers’ attitudes toward sustainable packaging. We have conducted this research globally with tens of thousands of consumers since 2020,4 and our 2025 survey round encompasses eleven countries across four continents.5
Based on our interviews and research, we have identified six key barriers across the value chain that are contributing to slower overall adoption: affordability, performance, lack of alignment on the meaning of sustainability, lack of clarity on regulatory standards, limited or unreliable supply, and—in some cases—incomplete knowledge of existing and developing solutions.
Despite these barriers, however, the significant commercial value and sustainability benefits at stake means that this is not the time for packaging purchasers or others within the value chain to walk back on ambitions or slow the pace of progress. On the contrary, the current moment offers a valuable window of opportunity for those that are prepared to invest and collaborate to develop and roll out innovative solutions that meet consumer demands and regulatory requirements. This article concludes with a list of key questions that companies can use to gather the inputs they will need to formulate a market-leading strategy for sustainable packaging.
Sustainability in packaging: A packaging purchaser perspective
Historically, packaging purchasers report having one primary objective: lowering costs. This objective has led to a strong focus on procurement as a way to decrease packaging weight and materials usage. Results have included changes in substrate usage, with growth in, for example, the use of flexible-packaging formats.6
Over the past decade, however, packaging purchasers have also made bold sustainability commitments. By 2020, our research showed that almost all the top 100 FMCG companies (in terms of revenue) had already made declarations and commitments to improving various aspects of sustainability over the coming years.7 While reduction of total material usage continues to be a focus, there has also been increased emphasis on full recyclability and using a higher degree of recycled content, as well as innovation and the promotion of change in the use of packaging. In some cases, these goals are complementary, while in other cases—as we will see later in this article—there may be tensions between them.
In recent years, there has also been a global acceleration of packaging regulation to encourage more circularity,8 ban the use of several chemical substances,9 and lower packaging leakage by encouraging reuse.10 And pressure for change is coming from consumers as well as regulators; McKinsey research undertaken alongside NielsenIQ has shown that products making claims related to environmental, social, and governance (ESG) issues averaged 28 percent cumulative growth in the five years before the study, versus 20 percent for products that made no such claims.11
Taken together, the combination of ambitious commitments from packaging purchasers and rising regulatory and consumer pressure seems to indicate considerable momentum within the industry toward increasing sustainability. However, the rate of adoption of sustainable packaging materials has been slow. The remainder of this article looks at the barriers that may explain this apparent paradox.
Six key barriers to the widespread adoption of sustainable packaging material
Based on our interviews and analysis, six barriers may be impeding the widespread adoption of sustainable packaging materials by packaging purchasers and across the value chain.
Affordability
Sustainable materials often have a higher price tag.12 Therefore, for companies to maintain their profit margins, they will generally have to pass these costs onto consumers. For example, high-quality recycled polyethylene terephthalate (rPET) often comes at a much higher cost than virgin resin, given supply constraints.13 This price differential is likely to be sustained, at least in the medium term. Should all retailers meet their sustainability pledges, the demand for recycled plastics could reach about 90 million metric tons by 2030, far higher than the projected global supply of about 60 million metric tons, which will put upward pressure on prices and impact retailers’ margins.14
Feedback from our interviews has also indicated that new material innovations such as high-performing polyhydroxyalkanoates (PHA) for rigid plastics, or at-home compostable films for flexible packaging, for example, could cost four to five times more than traditional polyolefin, pending barrier requirements and packaging specification. This price difference could increase the price of the final packaged good by 2 to 5 percent.
Raising prices can be challenging. While a significant portion of consumers in our 2025 packaging survey stated that they would be willing to pay for more-sustainable packaging, many others would not.15 Actual purchasing behavior may also differ from stated willingness to pay. This challenge came up repeatedly during our interviews with packaging purchasers.
Performance
It is not always straightforward to find new materials that can match the performance of traditional materials, especially for thermostability and film forming as well as the potential to include recycled materials (exhibit). Both brick-and-mortar and e-commerce retailers can face additional concerns around the performance of new materials during transportation, storage, and shelving. In particular, our interviewees reported that some new material innovations applied in packaging may have a higher breakage rate or may spoil more quickly, for example, and that some substrates may not have the same strength or capacity to hold print as the original, leading to poorer presentation once on the shelf.
Several interviewees stated that performance could be improved with additional modifications—such as investing in new machinery or combining materials (for example, plastic and paper)—but that the resources required to make such modifications, including capital expenditures, were not always readily available. Combining materials could also affect recyclability, creating a trade-off across different facets of sustainability. Additionally, industry experts said that understanding and adopting the production equipment and processes needed to accommodate sustainable materials can also be a challenge.
Lack of alignment on the meaning of sustainability
As mentioned in the previous subsection, sustainability has several facets and debate remains over which should be prioritized. This is an issue observed across the value chain. Stakeholders are generally aligned on the need for increased sustainability,16 but they may have different views as to whether the priority ought to be to decrease leakages, improve circularity, decrease carbon footprints, or some combination of the three.
A version of the same issue has been observed when assessing consumer preferences. Many companies do not have a detailed understanding of what consumers want,17 but even those that do must grapple with considerable nuance and complexity. As our consumer surveys have highlighted, there can be significant variation across countries—as well as demographic groups—on what packaging materials are considered the most sustainable.18 The regional surveys also found variation on which facet of sustainability is deemed most important, with some sets of consumers considering recyclability more than use of recycled content, for example, and vice versa. Understanding and responding to consumer preferences is further complicated by the fact that consumer perceptions of product sustainability may not always reflect the reality.19
Disagreements on both the meaning of sustainability and the hierarchy among sustainability-related characteristics affect not only individual assessments of current level of sustainability but also how to choose the future path to pursue or how to balance different sustainability-related goals. For example, a number of major consumer-facing companies have committed to reaching net-zero emissions or otherwise significantly reducing their greenhouse gas emissions. But to date, their sustainability focus within packaging has mainly revolved around improving recyclability and increasing recycled content.20
Evolving regulatory standards
As previously mentioned, a suite of new regulations have affected the packaging industry over the past decade. These regulations can be at the country, state, or even the city level21 and can cover a variety of different topics, including goals for packaging formats and reusability.22
Our interviews indicate that geographic variation in the details and scope of these changes, as well as uncertainty around how and when they will be implemented, may create barriers to the adoption of sustainable packaging materials. For example, compostable-packaging regulations vary significantly between Europe and United States, and intraregional variation is also common (such as within the European Union).23 For FMCG companies and retailers operating across regions or even globally, there will be an increased need to understand how requirements differ across countries and other geographical areas.24
Limited or unreliable supply
Sustainable materials may not always be available at a consistent quality or in the volumes required, which inhibits companies from using them. For example, collection levels of high-quality recycled material in the United States are expected to be more or less flat, creating supply challenges for brand owners and packaging companies as they look to ramp up their use of recycled content.25 Recent research shows that packaging purchasers may not be able to achieve their sustainability goals because of an anticipated shortage of recycled materials,26 and such shortages could also further push up the price of these materials. For example, if packaging purchases with public recycled-content commitments follow through on their plans, the US demand for rPET in 2030 would be about three times higher than projected supply.27
Interviewees gave a number of real-world examples of how these supply risks affected their go-to-market strategy. One food-focused brand owner, for example, had the ambition to switch five stock keeping units (SKUs) to a promising sustainable material but could source enough of that material to switch only one SKU. At that more limited scale, however, the company struggled to justify the investments required to change suppliers or market the use of the new material.
In some cases, a heavy concentration of suppliers for a particular sustainable material was also a potential issue for those we interviewed. There are, for example, limited manufacturers of at-home-compostable plastics. Many sustainable materials may also lack close alternatives that could be used as substitutes. Over the longer term, such issues could undermine supply chain resilience, which is a risk that many companies may not be willing to take.
Incomplete knowledge of existing and developing solutions
Packaging purchasers and others in the value chain may not have full knowledge of the sustainable-packaging options available to them. New innovations come online regularly, and our interviewees indicated that gathering all the relevant data on possible packaging options—including performance, sustainability credentials, and the likely evolution of cost, supply and relevant regulations—can be cumbersome and time-consuming, especially given the pace of change. As a result, several of those we interviewed said they relied on existing suppliers to share innovations, which suggests they may not have a full understanding of developments outside of those suppliers’ substrates.
Next steps: Accelerating the adoption of sustainable packaging
Despite these multiple barriers, now is not the time for packaging purchasers to roll back their goals or ambitions. Increasing regulatory requirements, growing consumer awareness, and the existence of a significant portion of consumers across countries that are willing to pay more—or even much more—for sustainable packaging mean that leading in this area remains an important source of growth and competitive advantage.28
Packaging purchasers looking to navigate existing barriers and achieve their sustainability goals can start by asking themselves the following questions:
- What is the full suite of available sustainable-packaging options? Packaging purchasers will need to understand the advantages and risks associated with each option, including price, performance, availability, and the possible impact of future regulation.
- What do consumers value? A granular understanding of consumer preferences and perceptions—such as for different packaging substrates and the aspects of sustainability they view as most important—will be a necessary factor of any successful sustainable packaging strategy. Understanding consumers’ willingness to pay will also be vital for packaging purchasers. Our research and consumer surveys indicate that there are consumers who are willing to pay for sustainable packaging29 and that sustainable products can outperform the market as a whole,30 but in-depth research will be needed to understand which consumers to target and what exactly those consumers are willing to pay for.
- What impact could any individual packaging choice have on the final product? Once packaging purchasers have a short list of potential types of sustainable packaging, they will need to do a detailed analysis of what using that packaging type would mean for their processes and product. Our consumer packaging survey consistently highlights perceived quality, price, and convenience as the product qualities most valued by consumers,31 so packaging purchasers should carefully assess the possible impact of updating packaging across these dimensions in particular. Doing so may require additional targeted consumer research. For example, could current and target customers accept a product that is more sustainable and cost-competitive but offers a shorter shelf life? Or is shelf life nonnegotiable, and consumers would rather pay slightly more to retain existing performance? Packaging purchasers will also have to assess what alterations, if any, would have to be made to design, marketing, and their overall branding strategy.
- Will possible options scale? The technical and economic feasibility of a large-scale rollout will vary by packaging type, SKU, and region. While packaging choices can—and sometimes should—be tailored by geography or customer segment, verifying the ability to scale individual choices over time will help packaging purchasers minimize costs and complexity. Thinking through opportunities to use innovation to drive costs down will also be important. Our recommendation is to think about innovation in incremental steps because it is likely unfeasible to immediately achieve the perfect sustainable-packaging solution—which might be, for example, a solution that is fully recyclable and also achieves cost parity with (and is as convenient as) the traditional material. When thinking through the innovation pipeline, packaging purchasers should also consider prioritizing sustainability dimensions that high-quality data suggests are valued by consumers.
- What are the key trade-offs across different elements of the sustainability agenda? It may be, for example, that progress on recyclability will not necessarily improve a packaging purchaser’s short-term carbon footprint or lower food waste.
- What early actions would have the most impact? An incremental approach to change can help build momentum, but demonstrating early progress on sustainability-related and other relevant KPIs will be crucial. Our previous research has stressed the differential impact that individual types of action can have on the various aspects of sustainability.32
Packaging purchasers that can give clear answers to these questions will be better positioned to optimize their sustainable packaging strategy. However, getting to this sort of clarity may require collaboration across the value chain—including bringing in material suppliers, packaging converters, retailers, and waste management entities.
Industry-wide initiatives will also be important in knocking down or circumventing the barriers identified in this article. For example, the creation of industry standards on sustainability could help to improve alignment on definitions and consumer understanding of sustainability claims, and continued investment in R&D to improve the performance and affordability of sustainable materials will also be important.
The evolution of sustainable packaging is at a critical juncture. While progress in the transition to sustainable packaging may not yet be in line with the stated ambition of many packaging purchasers, decisive action to address key challenges can lead to transformative growth. Those companies that invest in innovative solutions and collaborate across the value chain could have the opportunity to not only meet rising consumer expectations in a market that places significant value on sustainability but also set new industry standards.
