Why Sustainability Now Drives US Food Packaging Deals

Recyclable packaging is moving from promise to pressure point, reshaping investment, design, and consolidation across US food packaging

5 Feb 2026

A shift towards recyclable packaging is reshaping competition, investment and growth strategies in the US food packaging market, as sustainability moves from a long-term ambition to a central commercial priority.

Food brands and retailers have sharpened their demands over the past year, signalling that packaging must meet higher environmental expectations to remain competitive. Consumers increasingly associate recyclable packaging with quality and corporate responsibility, a perception that is now influencing purchasing decisions at scale.

Large packaging suppliers are responding by expanding recyclable and fibre-based product ranges and redesigning existing formats to better fit current recycling systems. Industry executives say customers are placing greater emphasis on solutions that work within real-world recycling infrastructure rather than materials that are recyclable in theory but rarely processed in practice.

This shift is pushing closer collaboration between packaging producers and brand owners, as both sides seek to balance sustainability targets with cost, performance and regulatory compliance. Investment is increasingly directed towards materials, processes and designs that can be integrated into established recycling streams.

The push for recyclable packaging is also contributing to consolidation across the sector. Recent mergers and acquisitions often reflect a search for scale and proven capability in recyclable materials. Companies with established production capacity and experience in recycling-ready formats are strengthening their market positions, while smaller innovators are attracting interest as partners or acquisition targets.

At the same time, suppliers are expanding paper-based and simplified packaging formats, reflecting growing interest in fibre solutions as an alternative to more complex plastic structures. These changes are influencing capital allocation and long-term planning across the value chain.

The transition is not without challenges. Higher material costs, uneven recycling infrastructure across the US and increased scrutiny of environmental claims continue to complicate execution. Regulators and customers are paying closer attention to whether sustainability commitments can be substantiated.

Despite these constraints, industry sentiment remains broadly positive. Many suppliers view recyclable packaging as a route to deeper customer relationships, longer-term contracts and clearer brand differentiation. Sustainability is increasingly treated as a growth strategy rather than a compliance exercise, shaping how value is created in the US food packaging market.