Compostable packaging: boosting profitability and simplifying waste management
Gary Tee, VP Global Converting at TIPA, explores the advantages that compostable packaging offers to brands and waste management facilities, from reduced contamination rates and simplified sorting processes to new revenue streams.
As consumer demand and regulatory pressures drive brands to adopt compostable solutions, waste and resource management services are poised to experience increased demand for composting services. Investing in composting infrastructure now will position these facilities to capitalise on the significant emerging opportunities. Compostable packaging reduces contamination rates among waste streams and solves some important sorting challenges, leading to cost savings. It also opens new revenue streams through the sale of high-quality, nutrient-rich compost.
Solving the multi-material challenge
As industry leaders are well aware, the prevalence of mixed material packaging significantly complicates sorting and processing operations within waste management facilities. Even if individual components are recyclable or compostable, when plastic is combined with paper, foil, or adhesives, these products are usually diverted to landfills due to the complexities of separation. Elements like zippers, lids, and stickers, typically composed of fused materials, further exacerbate these issues, hindering efficient waste processing for sustainable materials.
However, recent advances in material science offer promising solutions. The development of fully compostable multi-layer reels, water-based adhesives, compostable zippers and bio-based resins maintains the same protective qualities as conventional plastic or mixed-materials packaging—without the environmental burden. As a result, everyday items like coffee pod lids, resealable snack pouches, produce stickers, and flexible food wrappers can now be designed to break down in industrial or home composting systems, eliminating the need for labor-intensive waste separation.
Beyond food packaging, compostable packaging solutions are growing in the e-commerce and retail sectors, where traditional shipping materials have long posed challenges for waste management due to their complex compositions. Plastic coatings, synthetic adhesives, small packages, and multi-layer protective wraps are notoriously difficult to separate and process. Fully-compostable packaging options like mailer bags and fashion bags provide a durable and sustainable alternative that still ensures product protection during shipping.
For waste management facilities, the adoption of fully compostable packaging by e-commerce brands and food & beverage companies presents operational advantages.
When every component of packaging is designed to break down in composting conditions or even at the customers’ backyard compost bins, the need for consumers or waste processors to separate materials is reduced. This opens the door for lower contamination rates and sorting costs.
Creating New Revenue Streams from High-Quality Compost
The integration of compostable packaging into waste streams not only enhances compost quality but also opens new revenue opportunities for composting facilities. By adding compostable packaging as an additional source of feedstock to their compost operations, facilities can produce higher volumes of nutrient-rich compost that improves soil health and plant growth, and reduces the need for irrigation of crops. Compost is increasingly sought after in agricultural sectors, where it serves as a sustainable alternative to chemical fertilisers, thereby creating potential additional income streams for composting operations.
To capitalise on this opportunity, composting facilities should actively promote their willingness to accept compostable packaging. By advertising this capability, they can attract businesses and organisations eager to transition away from traditional, non-biodegradable materials. Collaboration with municipal authorities can also bolster these efforts. Municipal policies, such as mandatory composting ordinances and bans on organic waste in landfills, can drive the adoption of compostable packaging and increase the volume of compostable materials processed by facilities. For instance, San Francisco's Mandatory Recycling and Composting Ordinance requires all residents and businesses to separate compostables from other waste, leading to higher composting rates and providing composting facilities with a steady stream of organic material.
By partnering with municipalities and local buyers, composting facilities can expand their market reach and transform compost into a profitable venture, contributing to both environmental sustainability and economic growth.
Tapping into the Full Potential of Compostable Packaging
As the momentum behind compostable packaging continues to build, waste management facilities, brands, and policymakers must align efforts to fully realise its potential. By investing in composting infrastructure and refining waste processing systems, the industry can not only meet rising consumer and regulatory expectations but also unlock new revenue streams and operational efficiencies.
Looking ahead, the wider adoption of compostable solutions will play a crucial role in shaping a circular economy—one where packaging waste is no longer an environmental burden but a valuable resource. With continued innovation in material science and strategic collaboration across industries, compostable packaging has the power to augment waste management, offering a scalable and profitable path toward sustainability.
Gary Tee is the VP Global Converting at TIPA, a developer and manufacturer of biodegradable packaging solutions for the food industry. 
