This week’s DEMO meetups in Los Angeles and other parts of Southern California were a breath of fresh air across a startup landscape that’s crowded with consumer Web startups. Among the diverse ventures we saw this week was a company called Ecospan, which is aiming to disrupt the packaging space with a proprietary biopolymer-based, biodegradable material.

Companies like Ecospan, which aim at fundamental technological innovations which reshape the physical world, not just the virtual world, are a pointed response to the Web 2.0 bubble alarmists. They show that the tech industry still has players with their heads in the right places.

Ecospan joins the efforts of several other, much larger firms that are pushing toward greener packaging. As we reported yesterday, Amazon.com, Walmart, UPS, Fedex and others are heavily committing to sustainable packaging wherever they can, giving incentives to suppliers and also using clever new software to determine precise boxing requirements, among other innovations.

Ecospan’s contribution is in the actual packaging material itself. Because of these larger companies’ efforts to make packaging both cheaper and more sustainable among larger companies, the startup sees an immense market opportunity.

Its technology is a specially formulated type of bioplastic, truly biodegradable plastic packaging that’s completely devoid of petroleum products. Ecospan has spent nearly four years in research and development to find the “secret sauce” to manufacture its special resin, and has been in production since March of this year. The effort thus far hasn’t been cheap, and the cost-point for the startup’s bioplastics are currently too high for commodity items, so for the time being, packaging will be focused on higher-end technology and medical applications, and geared toward back-channel operations (like maintenance and repair). Given the pressure to go green, this hasn’t stopped these higher-end manufacturers from signing up.

One of these manufacturers is Apple, which the company wouldn’t specifically name, but is mentioned on Ecospan CEO Greg Hoffman’s profile on Bioneers.org, the blog of a science and innovation conference. This has helped them ship $4.5 million worth of product for just one SKU, with a backlog of $3.5 million next year. Clearly the pressure is working!

With five different production process technologies, they can tailor packaging for basically any type of product, without the need for companies to perform any re-tooling. This flexibility has allowed them to address the needs of a diverse set of manufactures, from medical and pharmaceutical products to laptop computers. Ecospan co-founder Steve Galvanoni calls this endeavor both “an art and a science,” since formulating the resin is a tough scientific job and then custom-fitting boxes for different manufacturers requires adjustments that are more like art.

Regardless of what you call it, the company’s packaging is seeing strong demand from manufacturers that currently employ a “closed-loop” packaging system, where products are placed in one-time-use boxes and then disposed of once opened. If they’re sent back for repair, another box is similarly used once for transport. Ecospan’s benefits can be most greatly felt by these companies, who are excited by the prospect of using a box multiple times throughout a product lifecycle, re-grinding, re-creating, and re-using the same packaging several times over.

Despite perfecting their technology for four years and already raising a few million from wealthy individuals, mostly friends and family, Galvanoni still considers Ecospan an “early-stage” enterprise. This is understandable: The company just started generating revenue, is small relative to the size of their multibillion-dollar market opportunity and is looking to raise a formal first round of funding.

That’s also what brought him to VentureBeat’s DEMO meetup, knowing that his firm is positioned in the “sweet spot” for venture capitalists these days, above the crowded angel-funded space and with a more expensive physical product that actually requires institutional financing. But whether it’s Boxes.com or real boxes, everyone’s welcome at DEMO this spring.