Our guide to the fibre-based packaging market in 2026

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Introduction

In this article we explore the recent increase in investments in fibre-based packaging, the current state of the market, the main drivers behind these investments and the kind of projects receiving funding and support.

Key Takeaways

• A report by consulting firm Future Market Insights (FMI) values the fibre-based packaging market at USD 314.7 billion as of 2025, projected to rise to USD 379.8 billion by 2035. The leading segment in the 2025 market was corrugated at 42.7%, with North America, Asia-Pacific and Europe noted as key growth regions. Recycled fibre is anticipated to lead the material source segment with a 61.3% share.
• However, the report cautions that having the appropriate amount of raw materials available poses a risk, as sources of fibre procurement have the potential to dry up. Fibre production requires large amounts of water and electricity, meaning the prices of fibre could potentially fluctuate and slow down the growth of the market.
• Drivers behind investments in fibre-based packaging include paper fibre’s potential to compete with plastic in cost per unit, cited by venture capital fund Industrifonden as a reason for supporting Yangi’s dry forming technology, which successfully secured €10 million in funding to industrialize its fibre packaging at scale.
• Nordic Foodtech VC stated that Fiberdom, which secured €3.5 million in funding for its home compostable material, addressed key pain points in the food system for the industry and consumers, such as functionality, scalability and recyclability.
• Pulpex’s £62m Series D investment round for its fibre-based bottle was led by the National Wealth Fund (NWF), which believes that “sophisticated, long-term investment” is needed in infrastructure and packaging innovation, with technological advancements like Pulpex’s bottle requiring “catalytic investment to scale and commercialise”.

Conclusion

When deciding whether to invest in fibre-based packaging, investors consider multiple factors such as its potential cost per unit when compared to plastic, how well it tackles current pain points in the industry, particularly single-use plastic; whether it delivers functionality and recyclability; and whether financing a project to scale and commercialise can provide the long-term investment needed to make a difference. We’ll be keeping an eye on this space over the coming months to see what further investments and developments are made.

In the last year or so, we have seen increased investments in companies producing fibre-based packaging - from Yangi securing €10 million in funding to scale its dry forming technology to Fiberdom receiving €3.5 million for its compostable paperboard material. What are the main drivers behind these investments and what kind of projects are receiving this support? We explore these questions in this edition of the Brief.

What’s the current state of the fibre-based packaging market?

A recent report by consulting firm Future Market Insights (FMI) gives an overview of the fibre-based packaging market from 2025 to 2035, valuing it at USD 314.7 billion as of 2025, projected to rise to USD 379.8 billion by 2035. The leading segment in the 2025 market was corrugated at 42.7%, with North America, Asia-Pacific and Europe noted as key growth regions.

FMI states that the fibre-based packaging market is experiencing strong growth driven by rising sustainability demands, increasing environmental regulations and growing consumer preference for eco-friendly materials. The company says this is supported by transitioning away from single-use plastics and the rising adoption of biodegradable and recyclable packaging solutions.

The report predicts that while corrugated packaging will dominate the market with a 42.7% share, it highlights that recycled fibre will lead the material source segment with a 61.3% share. Apparently, increased online sales in end-use industries like food and beverage and electronics are also ‘propelling’ the industry.

However, the report warns that having the appropriate amount of raw materials available poses a risk, as sources of fibre procurement have the potential to dry up. FMI says production of fibre is recognized as a strenuous process requiring extensive amounts of water and electricity, meaning there is potential for the prices of fibre to fluctuate and slow down the growth of the market.

Recent developments in food and beverage packaging

FMI’s report pointed out several recent developments in fibre-based food and beverage packaging, such as Rypax and CelluComp’s in-development fibre bottle, demonstrated at PACK EXPO. The bottle is expected to have applications in industries including the food and beverage and cosmetics industries. We reported on the companies’ fibre-based bottle with a plant-based coating in 2023, designed to replace plastic liner.

Other highlighted developments include a frozen food solution launched by Ahlstrom and the Paper People in August 2025, which can be printed in ten colours; and ProAmpac’s Modified Atmosphere Packaging (MAP) RAP Sandwich Wedge packaging, introduced for the North American market.

What’s driving investments in fibre-based packaging?

Last year’s investments in this area saw Yangi successfully secure €10 million in funding to industrialize its dry forming technology for fibre packaging at scale. The Series A funding round was lead by venture capital fund Industrifonden.

Yangi’s Cellera material is designed to offer packaging producers and brands a scalable, renewable alternative to fossil-based plastics, with the first machine sold to a European converter and the first products using Yangi’s fibre technology distributed to Asian customers at the end of 2024. The expanded investor group includes Almi Invest GreenTech and existing shareholders Voith, Chanel, FutureLab & Partners, and Turret Oy.

Anna Haupt, investment director at Industrifonden, indicated that the company’s investment was due to the paper fibre’s potential to compete with plastic in cost per unit, adding that “a low unit cost is necessary to transform the packaging industry and reduce the plastic mountains piling up on land and in our oceans.”

Earlier in the year, Finnish start-up Fiberdom revealed it had secured €3.5 million in funding to develop and scale its patented technology which creates a ‘100% plastic-free’ material, seeking to replace non-essential plastics with scalable, circular solutions. Said to be recyclable and home-compostable, Fiberdom claims it has successfully commercialized single-use cutlery that complies with the EU’s Single-Use Plastics Directive, currently available through Finnish retailers and B2B channels.

The funding was raised from Heino Group, Nordic Foodtech VC and Holdix Oy, alongside a €0.6M grant from Business Finland. Pekka Siivonen-Uotila, partner at Nordic Foodtech VC, commented:

“Replacing single-use plastics in food packaging and in serving and eating on-the-go food is one of the key pain points in the food system, both for the industry and for the consumers. Fiberdom’s technology addresses functionality, scalability, sustainability, and recyclability. We believe the cutlery is a great starting point for much broader innovation in plastic-free products.”

In the fibre-based bottle space, Pulpex announced the £62m Series D investment round for its fibre-based bottle - led by the National Wealth Fund (NWF) and the Scottish National Investment Bank - to finance construction of a commercial-scale manufacturing facility near Glasgow. Pulpex stated the NWF would cornerstone the round committing £43.5m in direct equity, with a £10m co-investment from the Scottish National Investment Bank and the balance from existing investors.

Plans to build a ‘50 million bottle per annum’ facility near Glasgow are anticipated to create the UK’s ‘first’ fibre bottle supply chain, utilising the company’s wood pulp solution, designed to be recycled in normal household recycling streams.

CEO of the National Wealth Fund, John Flint, believes the key to more recycling and unlocking the growth potential of the circular economy requires “sophisticated, long-term investment” in infrastructure and packaging innovation. He adds that technological advancements like Pulpex “need catalytic investment to scale and commercialise”, hoping that financing the new facility will help “remove barriers to future investment from private capital and lay the foundations for further growth.”

In July, PulPac received €20 million in funding from the European Investment Bank (EIB) to scale its patented Dry Molded Fiber technology for products such as bottles, coffee cup lids and pharmaceutical packaging. PulPac claims that its technology speeds up the production of rigid packaging from renewable cellulose fibre while reducing its environmental impact compared to traditional wet moulding.

The financing is structured as a venture debt loan and is provided under the InvestEU programme, designed to support the EU’s green transition by supporting ‘innovations, industrial resilience, and sustainability-minded economic growth’. The investment is set to contribute to PulPac’s research and development from 2025 until 2029, hoping to improve its efficiency, product performance, and cost competitiveness.

It seems that when deciding whether to invest in fibre-based packaging, investors consider multiple factors such as its potential cost per unit when compared to plastic, how well it tackles current pain points in the industry, particularly single-use plastic; whether it delivers functionality and recyclability; and whether financing a project to scale and commercialise can provide the long-term investment needed to make a difference. We’ll certainly keep an eye on this space over the coming months to see what further investments and developments are made.

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