In 2023, PMMI and AMERIPEN released the Packaging Compass, a forward-looking report that mapped the next decade of packaging design and recovery. Two years later, PMMI’s The New Material World: Compass Update 2025 revisits those forecasts, grounding them with updated data and fresh industry perspectives. While the 2023 report emphasized anticipated growth in compostables, flexible packaging, and recycled content, the 2025 update reflects a market where real-world constraints—cost, regulation, and machinery—are shaping more pragmatic decisions.
For OEMs, the comparison highlights how optimism around emerging materials is giving way to a more measured focus on recyclables, operational feasibility, and closer collaboration with brand owners.
Five shifts and their Implications
1. Compostables: From rising star to stalled growth
- 2023: Forecasts projected compostables as one of the fastest-growing packaging segments, with expected CAGR of 15–16%.
- 2025: Momentum has slowed, with an 8% drop in companies “somewhat likely” to adopt compostables. Performance issues and infrastructure gaps are the main culprits.
- Implication: OEMs are focusing less on compostable-ready equipment and more on refining recyclables performance.
2. Recyclables take center stage
- 2023: Recycled content was highlighted as a key priority, though supply constraints raised concerns.
- 2025: Over 80% of companies now say they are likely to increase use of recyclable packaging, with a strong shift toward “extremely likely.”
- Implication: Flexible, adaptable equipment capable of running recycled content is now a minimum customer expectation.
3. Regulatory drivers: Federal to fragmented
- 2023: Extended Producer Responsibility (EPR) dominated discussions, with hopes for harmonized federal policies.
- 2025: State and retailer mandates (California laws, Walmart’s playbook) now rank higher than federal guidance in shaping strategy.
- Implication: OEMs must build adaptable machinery that can flex to meet different state and retailer requirements.
4. Machinery limitations: A persistent barrier
- 2023: Report warned that legacy machinery would slow sustainability adoption.
- 2025: That forecast has proven true—50% of CPGs still say machinery limits progress. OEMs report 64% of new equipment is now modified for sustainable materials, but legacy lines remain a hurdle.
- Implication: Retrofits and incremental upgrades will continue to be as important as new machinery development.
5. Market mood: From ambition to pragmatism
- 2023: The narrative leaned optimistic—growth in compostables, stronger recovery systems, and circularity gains.
- 2025: The conversation has shifted to pragmatism, with cost, performance, and consumer demands setting the pace. Collaboration, rather than breakthrough materials, is seen as the clearest path forward.
- Implication: OEMs are expected to act as consultative partners, not just machinery suppliers.
The two-year gap between reports highlights how quickly optimism can give way to operational reality. Compostables, once the industry’s rising star, are giving way to recyclables as the practical choice. Regulations have fragmented rather than harmonized, and machinery remains a critical constraint.
For OEMs, the lesson is clear: long-term success will require not just technical innovation but also adaptability and collaboration. Now that both sides of the table are in the thick of it, the packaging industry’s sustainability journey has shifted from forecasts and ambition toward grounded, pragmatic execution.
Visit pmmi.org/report/2025-the-new-material-world-packaging-s-path-toward-sustainability to download the full report.
