Sustainable packaging materials are reshaping how brands and machine builders work together, but cost and performance risk still slow the shift. That is the central finding of The New Material World: Packaging’s Path Toward Sustainability 2025, a research report from PMMI, the Association for Packaging and Processing Technologies. As end users move toward more sustainable materials, original equipment manufacturers (OEMs) are adapting their machinery to deliver innovative solutions without compromising performance.
By Rebecca Marquez, Director, Custom Research, PMMI
The primary functions of packaging are to market a product and protect it from damage. Neither can be sacrificed to meet sustainability needs. According to the PMMI study, any change made to a package to reach sustainability goals must be coordinated with filling systems, distribution channels and consumer demands.
What is driving packaging decisions today
In interviews with end users, the lack of strong federal sustainability guidelines emerged as a key theme. Packaging decisions are being shaped not by federal regulation but by more immediate pressures, such as state mandates and retailer requirements. California, for example, has adopted more aggressive legislation, which pushes companies to prioritize compliance with its laws and with retailer demands while they monitor federal activity.
OEMs feel these pressures too. As governments and retailers push consumer packaged goods (CPG) companies toward more sustainable practices, end users turn to OEMs for equipment that can handle sustainable materials. And as carbon footprint reports begin to include OEMs, they are increasingly part of the sustainability equation.
Barriers to sustainable packaging remain
As companies migrate to sustainable materials, the most common challenges are higher production costs and lower product protection and quality. The interviews confirmed it: CPG companies of all sizes named cost and performance risk as their top concerns.
Economic pressure, especially cost implications, has been the main barrier to adopting sustainable formats. End users worry not only about the direct increase in material costs but also about downstream risks such as product damage or failure. Whether based on experience or perception, those risks remain key factors holding back faster progress.
End users must balance trade-offs as they adopt new strategies and materials, and OEMs and suppliers are responding by adapting machinery and components to work with sustainable materials. From the OEM perspective, the main trade-offs facing end users are packaging performance and equipment performance. Both often require innovation or modification to handle current and emerging materials. OEMs also pointed to shorter product shelf life, slower return on investment and reduced machinery flexibility.
Material priorities are shifting
Study participants were asked to select up to three materials their company will replace in the next three to five years. The 10 materials most often named for replacement were:
- Polystyrene (PS)
- Foams such as polyurethane, PS and polyethylene
- Polyvinyl chloride
- Flexible multi-materials
- Non-certified SBS paperboard
- Rigid multi-materials
- Rigid low-density PE
- Rigid PP
- Rigid HDPE
- Compostables
The material most likely to stay in use is forest-certified (FC) recycled paperboard. The rest of the 10 materials least likely to be replaced over the same period are FC corrugated, FC SBS paperboard, FC kraft, reusables, rigid PCR (post-consumer recycled), flexible PCR, steel, clear glass and aluminum.
Some companies plan to adopt paper as a packaging material, and more than 80% of respondents said their company will likely increase its use of recyclable materials over the next five years. The quantitative results confirm that recyclable materials remain the top sustainability priority for most companies, particularly when retailers require them. Adoption is expected to grow, but cost continues to be a significant barrier, especially for small or price-sensitive brands, unless material costs fall or regulatory pressure increases.
Reusables hold steady while compostables lose momentum
From 2022 to 2023, the likelihood of increasing the use of reusable materials stayed relatively constant. A key obstacle, highlighted in PMMI’s Packaging Compass 2023 report, is the lack of reuse infrastructure. Interest in building that infrastructure is growing, but cost and complexity remain major barriers.
Reusable options are used in specific applications, yet they still pose structural, logistical and economic challenges that limit large-scale implementation. As a result, recyclable materials remain the main focus of packaging innovation and sustainability.
Packaging Compass 2023 also pointed to growing momentum toward compostable materials. By 2025, however, that trend had cooled, possibly because of limited infrastructure. The most notable shift was an 8% drop since 2022 among those who said they were somewhat likely to adopt compostable packaging within five years, reflecting growing uncertainty.
In interviews, most CPG professionals expressed doubts about implementing compostable materials in general. They cited performance limitations in food-grade conditions, a lack of cost competitiveness, insufficient composting infrastructure and low consumer demand. The current industry trend therefore favors recyclable materials, while compostables remain an area of development and exploration.
Why end users and OEMs must collaborate
Existing packaging machinery is one of the biggest technical barriers to adopting sustainable materials in end-user operations. Until equipment is upgraded or replaced, or materials evolve to be more compatible with existing lines, companies will keep making gradual changes rather than deep transformations.
To meet end-user needs, nearly two-thirds of OEMs now build machinery that has been redesigned or modified to accommodate more sustainable materials. About half of OEMs say that up to 25% of their machinery is designed or modified to enable the use of these materials.
The CPG companies interviewed for the study identified their top three sustainability priorities as:
- Reducing the amount of packaging used in products
- Adopting more recyclable packaging materials
- Reducing packaging waste in operations
The top three OEM strategies, meanwhile, include:
- Designing or modifying machinery to reduce the amount of packaging used
- Designing or modifying machinery to work with recyclable materials
- Reducing packaging waste in end-user operations
End users and OEMs agreed on the main factors that will influence packaging over the next five years:
- Consumer preferences
- Costs
- Legislation and regulation
As sustainability efforts continue, OEMs and end users face connected but distinct pressures. For end users, rising costs for sustainable materials, along with quality and performance concerns, make packaging decisions increasingly complex. OEMs, for their part, must modify or redesign equipment to handle new and emerging materials without compromising machine performance or production efficiency.
A fragmented regulatory landscape adds to the complexity. State laws and retailer mandates now carry more weight than federal guidelines, and sustainable packaging strategies are becoming more reactive at the regional level than consistent at the national level.
This shifting environment demands greater agility from equipment makers and their customers. End users want more than technical solutions; they need strategic vision, foresight and collaboration. OEMs are uniquely positioned to take on that role by helping customers navigate the materials transition, anticipate future machinery needs and co-develop solutions aligned with emerging standards and consumer expectations.
To move forward, both groups must shift from operating in parallel to working together on strategic planning. Through that collaboration, OEMs and end users can go beyond reactive adaptation and lead the way toward a more sustainable, resilient packaging future.
Material sustainability at PACK EXPO International 2026
Material sustainability solutions will take center stage at PACK EXPO International 2026, taking place October 18-21 at McCormick Place in Chicago. Specialized pavilions and planning tools will make it easier than ever to find exactly what each operation needs.
Attendees can gain insight from industry thought leaders and pioneers in free sessions on the show floor at the Innovation Stage, Food and Beverage Processing Innovation Stage, Industry Speaks, Sustainability Central and the Reusable Packaging Learning Center, sponsored by the Reusable Packaging Association.
With 48,000 professionals from more than 40 vertical markets and 2,600 exhibitors, PACK EXPO International is the industry’s leading platform for evaluating equipment, identifying emerging trends and making informed investment decisions in one place. Held only every two years, the event is a critical opportunity for companies to stay competitive and improve operational efficiency.
Attendees can explore the broadest range of materials, packaging and processing technologies, and complete project research in just a few days, at North America’s largest and most comprehensive packaging and processing event. Registration remains open at packexpointernational.com; the current registration rate is USD 130, so check the event site for up-to-date pricing.
For more on the wider material and sustainability picture, see our coverage of Packaging Trends 2026 and Dow’s circular plastics strategy, including PCR resins.
Frequently Asked Questions
What is the PMMI study The New Material World?
The New Material World: Packaging’s Path Toward Sustainability 2025 is a PMMI research report on how end users and OEMs are responding to the shift toward more sustainable packaging materials. It combines interviews with end users and OEMs with quantitative survey results.
What is the biggest barrier to adopting sustainable packaging materials?
Cost. Economic pressure has been the main barrier, along with concerns about lower product protection and quality, and downstream risks such as product damage or failure.
Which sustainable packaging materials are companies prioritizing?
Recyclable materials. More than 80% of respondents said their company will likely increase its use of recyclable materials over the next five years, while interest in compostables has cooled.
Why are compostable packaging materials losing momentum?
CPG professionals cited performance limitations in food-grade conditions, a lack of cost competitiveness, insufficient composting infrastructure and low consumer demand. The study also found an 8% drop since 2022 among those somewhat likely to adopt compostable packaging.
How are OEMs responding to the move toward sustainable materials?
Nearly two-thirds of OEMs now make machinery redesigned or modified for more sustainable materials, and about half say up to 25% of their machinery is designed or modified for that purpose.