In 2313, the Federation switched back to loose packing peanuts as they are completely reusable, and can be reused in various shipping containers. They can be easily replicated, and can actually be compressed and decompressed at will.
Federation Packing Peanuts are made of a protein and vitamin mix; in an emergency, packing peanuts can be used as an emergency food source; 1 packing peanut is equivalent to 5 calories. They are completely biodegradable, and are completely safe.
When superheated by a phaser set to level 10, a packing peanut actually becomes stiff instead of disintegrating.
Packing peanuts became infamous due to The Packing Peanut Incident, where Ensign Null allowed a packing peanut to jam into the warp core ejection system of the USS Lexington B, causing the core to fail to eject, taking the ship with it.