Food packaging boasts the largest share in the total plastics market and has the greatest opportunity in terms of volume sales, according to Rabobank.
Its report, Bioplastics Moving to the Beet, claims demand for bioplastics in the EU could lead to 1.2m tonnes of sugar by 2020.
Paul Bosch, analyst, Rabobank told FoodQualityNews.com, European Food & Agri companies are expected to become big players in the global market for bioplastics.
Companies already cashing in include Dutch sugar cooperative Royal Cosun, which is working with renewable chemical company Avantium on PEF and Belgian sugar producer Finasucre, which has become involved in PLA production.
“Working in Rabobank Food & Agribusiness Research we want to show these companies the different routes they can take to see if they should invest in the bioplastics business,” said Bosch.
“Manufacturers can either wait and act as a supplier to the industry and watch the developments take place, or they can go beyond that and make a real investment. The question is if they have the confidence to break out and invest in this area.”
Rabobank estimates Bioplastics show the highest growth projections when it comes to demand for EU sugar with a CAGR of up to 40%; higher than the 5% expected in bioethanol and the flat outlook for food markets.
It has attracted interest from two groups of companies in the F&A sector: those who want to package their food and beverages in bioplastic and those who want to supply the feedstocks to make it.
According to Bosch, sugar companies are looking at three ways to get involved. Firstly, 'drop-in' bioplastics production such as bio-ethylene to add a touch of green to fossil-based plastics like Polyethylene Terephthalate (PET) and Polypropylene (PP).
Secondly, the development of a 100% bio-PET bottle spearheaded by beverage companies to sell their beverages in 100% biobased bottles.
Finally, a third group of companies is looking for possibilities outside of plastic bottles that provide higher value functional equivalents, such as biodegradable materials.
He added as competition in EU sugar and starch markets is expected to increase after 2017, a diversified strategy could be important for companies in these sectors.
For example, in sugar, revenue growth is limited in F&B applications due to already high per capita consumption and limited population growth. Sugar could be partially replaced by isoglucose in food and drink as a result of the quota abolition coming into effect in 2017.
Furthermore, under the Renewable Energy Directive, the European Commission (EC) is looking to cut the EU-wide 2020 biofuels targets by 50%, limiting growth for food crops, such as sugar beet.
“While demand figures are currently hard to find, it will be heavily influenced by the affordability of bioplastics over fossil-based products; a price premium currently borne by brands that have already invested in a greener image,” added Bosch.
“Those companies that carefully define their execution strategies into bioplastics, and particularly those that form knowledge-sharing partnerships with established polymer producers, will benefit from the higher prices associated with new, improved plastics.”
Click here to read the Bioplastics Moving to the Beet report.