The landscape of environmental sustainability is evolving. Recent policy changes in the EU have resulted in the simplification, delay, or questioning of several flagship sustainability regulations. Concurrently, the ongoing cost-of-living crisis has led many consumers to shift their focus away from these concerns.
In stark contrast, the eco-friendly packaging sector is experiencing robust growth. According to Grand View Research, the market is projected to achieve a compound annual growth rate (CAGR) of 7.6% from 2025 to 2030, reaching a valuation of $353.78 billion (€301.53 billion) by 2030.
A recent report by McKinsey & Company indicates that this surge in the packaging market is largely influenced by Generation Z.
Are consumers still prioritizing sustainable packaging?
It appears that Gen Z, particularly those with higher incomes, exhibit a greater willingness to pay more for sustainable packaging compared to their older peers.
For instance, 25% of high-income Gen Z consumers in Germany are willing to pay “a lot more” for sustainable packaging, while only 1% of high-income Gen X consumers share this sentiment. The overall average across Germany stands at 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.
Across the European countries surveyed—Germany, Italy, Sweden, the UK, and France—there was an overall increase in willingness to pay “a lot more” since 2023. However, in France, the willingness to pay “a little more” saw a slight decline.
Consumers across all regions expressed that the onus is on brand owners and producers to advance sustainability in packaging. In the UK, 37% attributed this responsibility to brand owners, while 29% pointed to packaging producers. In Germany, 22% mentioned brand owners and 38% indicated packaging producers; similarly, in France, 26% placed responsibility on packaging producers and 37% on brand owners. This trend was consistent in every surveyed country.
What factors outweigh sustainability in packaging?
Despite the enthusiasm for sustainability among Gen Z, the overall trend remains modest.
Price and quality continue to dominate as the most critical factors influencing purchasing decisions, with price gaining even more significance recently.
When discussing packaging specifically, food safety and shelf-life emerge as the top priorities, with food safety ranking highest across nearly all surveyed countries.
Conversely, environmental impact languished in sixth place out of seven factors among the 11 countries studied, with its importance either stagnating or declining.
Nonetheless, the concern for sustainability has not diminished; the percentage of consumers who prioritize it remains stable. What has shifted is the increasing attention given to other aspects, particularly price.
