Coatings market: The USD 10bn barrier sector rethinks sustainability

The global packaging coatings market is undergoing a "genuine transition" as stringent regulations, particularly the EU’s Packaging and Packaging Waste Regulation (PPWR), force the industry to abandon traditional materials and adopt sustainable alternatives. This seismic shift affects a market valued in the billions, barrier coatings alone are globally worth nearly USD10 billion in 2025.

According to Robert Outram, consulting project director at Smithers, the necessity for change lies at the intersection of essential performance (shelf life and aesthetics) and the demand for greater sustainability. Outram's work is reflected in the new Smithers market study, The Future of Packaging Coatings to 2031 which unpacks where the market is heading and what it means for converters, brand owners, and coatings suppliers alike.

Flexible packaging remains the largest segment of coated area, accounting for over 42% of the market and valued at nearly USD 4.7 billion in 2025. However, the segment is under "mounting regulatory and consumer pressure" over its environmental impact. This is creating real momentum for paper-based formats due to their recyclability.

In terms of technology, extrusion coatings, mostly polyolefins, remain the largest segment, accounting for about a third of volume demand in 2025. Water-based coatings are the second largest and are growing fast.

The technology "clearly on the retreat" is solvent-based coatings. Its decline since 2023 is set to "accelerate," driven by stricter VOC regulations and the broader shift away from multilayer flexible films toward mono-material and paper-based formats.

For coatings suppliers, key growth opportunities include technologies like SiOx and AlOx deliver excellent barrier performance at extremely low coating weights, ensuring they do not compromise recyclability. A high-profile example of this shift is Starbucks rolling out SiOx-lined paper cups across Europe in 2025.

Also, there are water-based acrylics. These hold strong potential if their barrier performance can approach EVOH levels. Then there is fluorocarbon replacement. In the food service sector, there is an "real urgency" to replace fluorocarbon coatings with alternatives like vegetable-based waxes and water-based acrylics. While food and beverages remain the dominant end-use sectors (nearly 40% and 31% of global volume, respectively, in 2025), the fastest-growing end application is pharmaceuticals. The highly regulated pharma sector, historically dominated by PVdC, is now seeing momentum build to adopt more sustainable alternatives.

Although the Asia-Pacific region dominates overall market volume, Europe is the most dynamic market for coatings innovation. The PPWR, which came into effect in February 2025 with full implementation due by July 2026, is driving this demand for new sustainable solutions.

Outram said that the single biggest challenge facing the industry is "Closing the performance gap between sustainable and conventional technologies, without adding cost". With brand owners still demanding the same high shelf life and mechanical performance, suppliers must move fast to meet regulatory deadlines while maintaining current standards.