A new industry report from The Consumer Goods Forum’s Plastic Waste Coalition of Action, developed in collaboration with Bain & Company, highlights the growing role of artificial intelligence (AI) in improving packaging circularity across global supply chains.

The report, titled Exploring AI for Packaging Circularity, analyses how AI is being applied across the end-to-end packaging lifecycle, from early-stage design decisions to waste sorting and material traceability at end of life. Drawing on industry interviews, case studies and market analysis, the research provides a practical assessment of where AI is already delivering value and where further progress is still constrained.

According to the findings, around 30% of surveyed companies are already using AI in some part of the packaging lifecycle. These applications range from reducing material use during packaging design to improving the quality and efficiency of waste sorting systems. Packaging design emerges as the area with the greatest potential impact, with approximately 70% of respondents identifying it as the most promising opportunity for AI-driven improvement.

The report identifies four AI use cases that are currently the most advanced and actionable: packaging design optimisation, generative design, advanced sorting technologies and material traceability. Together, these applications are enabling measurable benefits, including lower material consumption, improved recyclability and greater transparency across packaging value chains.

However, the research also underscores that significant barriers remain to scaling circular packaging solutions. Five key challenges are highlighted: technical limitations of new materials, the gap between theoretical recyclability and real-world recycling outcomes, limited access to recycled content, the complexity of implementing refillable and reusable systems, and the growing burden of regulatory compliance and reporting requirements.

As Mario Abreu, Chief Sustainability Officer at Ferrero and co-chair of the Plastic Waste Coalition of Action, notes, AI should be viewed as an enabler rather than a standalone solution. “AI will not solve packaging circularity on its own, but used in the right way, it can significantly accelerate progress,” he said.

The report is released against a backdrop of increasing regulatory scrutiny and rising expectations around circular economy performance. As governments introduce stricter requirements for recyclability, recycled content and reporting, businesses face mounting pressure to improve data integration and decision-making across complex supply chains.

In this context, AI’s ability to process large volumes of data, connect fragmented systems and support smarter design and recovery decisions is seen as a critical tool for scaling circular packaging practices. According to Cedric Dever, Managing Director of the Plastic Waste Coalition, the report aims to provide “a practical, industry-informed view of where AI is already delivering value today and where collaboration across the value chain will be critical to scale solutions.”

Overall, the report positions AI as a key innovation lever for packaging professionals seeking to align sustainability ambitions with operational performance, offering concrete examples of how digital tools can support circular business strategies across the packaging lifecycle.