Market Trends of Paper Cups Industry
QSR is Expected to Drive the Market
- The relationship between QSRs and sustainability needs to be more consistent. While QSRs focus on speed and convenience, their practices regarding sustainability vary. However, there is an increasing awareness and effort within the industry to adopt more sustainable practices, including using environmentally friendly materials like paper cups.
- The busy lifestyle in developed cities and the trend of eating outside as part of leisure activities led to new coffee shops and QSRs. The franchise model is a new trend for the rise of QSR chains, which is expected to fuel the market's growth. For example, regional authorities started incentivizing franchisees and franchisers to attract international brands and investors interested in entering the market with the help of experienced local players.
- According to Starbucks, in 2023, there were 38,038 Starbucks stores globally. The company experienced growth over the past ten years, and Starbucks' unit sales increased. Over the past ten years, the coffee company practically quadrupled the number of stores thanks to global expansion. The consumption pattern is gradually spreading in the developing regions, contributing to the industry's growth and driving the demand for paper cups.
- Additionally, quick-service restaurants investing and collaborating with different food chains may raise demand for paper cup packaging. In March 2022, A&W Restaurant launched the first lidless, fully compostable coffee cup, which doesn't require a lid or straw, contains no plastic liner, and is fully compostable and recyclable. The cup design innovation from UK-based ButterflyCup is made entirely of paper, with a unique, water-based coating that prevents leaks. Moreover, according to the US Census Bureau, monthly quick-service restaurant sales in the United States reached USD 37.36 billion in December 2022, compared to USD 33.68 billion in 2021.
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Asia-Pacific to be the Fastest Growing Market for Paper Cups
- The Asia-Pacific paper cups market is one of the largest and fastest-growing globally. Factors such as population growth, urbanization, changing lifestyles, and the rise of the food service industry contributed to the expansion of the market.
- The growing trend of on-the-go consumption, particularly in busy urban areas, fueled the demand for paper cups. The convenience offered by paper cups aligns with the fast-paced lifestyles of consumers who prefer takeaway and delivery services. The region witnessed a significant expansion of the food service sector, including quick-service restaurants, cafes, and street food vendors. These establishments rely heavily on paper cups for serving beverages and takeaways, driving the demand in the market.
- QSR focuses on expanding its presence by adding/opening new stores to cater to the increasing demand. Starbucks is the largest coffeehouse chain worldwide, with nearly 36 thousand stores across the globe. As of October 2022, the country with the most Starbucks stores worldwide was the United States, with over 15 thousand stores. China ranked second with 6,019 stores. The number of stores increased from 5,358 in 2021 and was ranked before Canada and Japan.
- Additionally, countries like South Korea are undertaking various programs to reduce waste. For instance, in June 2022, South Korea introduced a mandatory refundable deposit for disposable coffee cup use. The deposit scheme, intended to increase recycling rates, would be collected by operators and applied to hospitality businesses with 100 outlets.
- Further, in India, the government announced a ban on the application of single-use plastics that got enforced by July 1, 2022. Growing consumer awareness about the adverse effects of plastics on the environment plays a vital role in purchasing behavior. Corn starch is among the most common substitute for plastic packaging. Leading online food delivery systems also switch to corn starch packaging to promote an eco-friendly brand image. Such changes and rapid development are expected to boost market growth for paper cups in the Asia-Pacific.
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