Retail Bag Industry Trends

The retail bag industry is an industry in transition, buffeted not only by larger factors like the rise of e-commerce and curbside pickup & delivery for restaurants, but also by changing regulations & consumer preferences, as well as retailer responses to these changes.

While the rapid growth of e-commerce has reduced foot traffic in many brick & mortar retail establishments – impacting the number of bags going out the door – the rise in curbside pickup & delivery options from restaurants is pushing in the other direction, with consumers one of these options over dining in or fixing a meal at home.

Growing consumer awareness of the sheer amount of plastic waste that is generated and that eventually makes it way to the ocean has led many companies to adopt and advertise sustainability practices in an effort to boost their brand images and sales.

Local governments have also been responsive. Over the past decade hundreds of cities in the US (and many states) have passed regulations related to retail bags, most of them banning single-use plastic bags and some also placing fees on paper bags. However, the definition of a reusable bag continues to be up for debate, making it difficult for manufacturers to plan future capacity requirements.

While bans on retail bags have garnered a lot of attention, decisions on bag use by leading retailers may also have a significant impact on bag sales in the long run. In light of a varied and uncertain regulatory landscape, retailers are using a variety of shopping bag policies. Some choose to wait for legal requirements to change, and others have decided that to make changes immediately in order to get ahead of the future move from single-use. Like many end-users of disposable plastics, retailers increasingly see single-use bags as a public relations liability.

Most retailers are maintaining their current bag policies, particularly those using paper bags. As plastic is currently the type of bag getting the most notice and being subjected to many bans and restrictions, paper appears to be the safe choice for in-store shopping bag use for retailers.

Other retail bag industry trends include:

▪ some retailers moving away from disposable bags, while others have chosen to not offer any single-use bags in their stores

▪ some retailers adopting higher quality disposable plastic bags to skirt regulations

▪ retailers providing receptacles in their stores for customers to return single-use bags for recycling

▪ retailers encouraging customers to bring their own reusable bags & often offering reusable paper or plastic bags of various types for purchase at a modest price

▪ grocery retailers offering reusable bags at the front of their stores and conducting periodic promotional bag giveaways

▪ the development of high quality plastic carryout bags compliant with regulations will increase competition between paper and plastic for the takeout market

Foodservice establishments use a variety of carryout bags, with the choice of bag material based on the type of restaurant and application. Foodservice is often exempted from legislation related to retail bags, so there is less regulatory pressure on restaurants to limit disposable bags. In addition, many restaurants – especially fast food chains such as McDonald’s, Wendy’s, and Burger King – already rely primarily on paper bags, and reusable bags are not a feasible choice for restaurants in general.

However, changes in bag use by full service and fast casual chains may be spurred by growth in curbside pickup and delivery. As such services as DoorDash, Grubhub, and Uber Eats become more popular, they will require effective bags to safely get food to customers. In addition, the development of high quality plastic carryout bags compliant with regulations will increase competition between paper and plastic for the takeout market.

Non-grocery retailers continue to offer a broad array of bags, which are largely functional. The types reflect the needs of customers, products, and, to some extent, the image the store wants to convey.

Discounters and home improvement stores primarily use economy-focused plastic single-use bags. Mid- to high-end department stores prefer high quality, printed and coated reusable plastic or flat-bottom paper bags that promote their brand.

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