In the first part of just-food’s latest management briefing, Jonathan Thomas outlines the moves to create industry-wide standards on sustainable packaging and the moves made by individual food companies to make their packaging more environmentally-friendly.
A key trend affecting the global market for food and drinks packaging at present is the move towards making business more sustainable from an environmental perspective.
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A steadily increasing number of companies within both the food and the packaging industries are now implementing strategies with sustainability in mind, thereby addressing concerns from consumers, regulatory authorities and governments. This move towards greater sustainability is perhaps best illustrated by the fact that most of the world’s leading food groups now produce annual reports in this area, listing their respective sustainability goals and the progress they are making towards achieving them.
Despite high levels of activity in this area, there does not appear to be as yet an overriding and internationally-accepted definition of what constitutes sustainable packaging. In the past, most policy initiatives in this area mainly focused upon reduction of waste and encouraging greater recycling of packaging materials.
However, this situation is changing rapidly, with both packaging companies and their customers now embracing a far more holistic concept of sustainability. As far as packaging is concerned, this has taken the form of paying greater attention to raw material sourcing, as well as exploring the use of alternatives such as bioplastics.
Sustainability efforts in North America are now being co-ordinated by the Sustainable Packaging Coalition (SPC), an industry-wide body whose members include major packaging firms such as Tetra Pak, Ball Corporation and O-I. The SPC envisages “a true cradle to cradle system for packaging”, while at the same time “endeavouring to build packaging systems that encourage economic prosperity and a sustainable flow of materials”.
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By GlobalDataMore recently, the SPC has defined sustainable packaging as:
- Being beneficial, safe and healthy for individuals and communities throughout its lifecycle;
- Meeting market criteria for performance and cost;
- Being sourced, manufactured, transported and recycled using renewable forms of energy;
- Maximising the use of renewable or recycled source materials;
- Being manufactured using clean production technologies and best practices;
- Being made from materials healthy in all probable end-of-life scenarios;
- Being physically designed to optimise materials and energy;
- Being effectively recovered and utilised in biological and/or industrial cradle-to-cradle cycles.
As these principles suggest, the notion of sustainable packaging has expanded to incorporate other considerations, notable examples of which include reduction of carbon footprint and energy usage. Following on from the work done by the SPC, it was announced in March that a number of FMCG leaders were to form a new trade organisation dedicated to developing environmentally and economically-sound packaging initiatives. The American Institution of Packaging and the Environment (AMERIPEN) includes food groups such as Kellogg and The Coca-Cola Company, as well as packaging suppliers like Tetra Pak, and is expected to play a significant role in shaping opinion as far as sustainable packaging is concerned.
From a regulatory standpoint, there have been calls of late for greater harmonisation of sustainable standards within the global packaging industry. The EU, for example, has regulated packaging in the European region via its Packaging and Packaging Waste Directive for some time now – a piece of legislation which covers areas such as suitability of packaging material for recycling, as well as minimisation of packaging waste. However, it is hoped that packaging sustainability criteria will be harmonised across a broader geographical area by 2012.
As the sustainability concept has developed, so have awareness levels throughout both the packaging and the food and drink industries. Studies conducted in 2009 by the SPC found that over 40% of industry respondents were ‘very familiar’ with the issue of sustainability, up from just over 20% in 2007. According to the same survey, 68% of respondents felt that the emphasis on sustainable packaging had increased within the last year, while almost 90% claimed that sustainability was an important consideration during the packaging design process.
Packaging sustainability now forms a central part of strategy for many operators within the global food industry. The US retail giant Wal-Mart Stores, for example, has been rating its suppliers on packaging sustainability since 2008. Wal-Mart’s Sustainability Packaging Scorecard was recently extended to its Canadian and Mexican operations, and now covers 340,000 items sold via its store network. This initiative forms part of the company’s aim of reducing packaging throughout its supply chain by 5% between 2008 and 2013.
Other operators within the global food industry have also been active in this area. Kellogg, for example, established a Global Sustainable Packaging Team a few years ago to improve its package-to-food ratio. The company has been reducing the material used in its packaging since 1994, whilst almost all of its cereal cartons are made of 100% recycled fibre. Furthermore, the company’s use of recycled paperboard dates back to the start of the 20th century. Elsewhere, Unilever aims to source 75% of all of its packaging from either recycled materials or sustainably-sourced materials by 2015, while The Coca-Cola Company aims to increase the percentage of all its cans and bottles recovered worldwide from 35% to 50% during the same period.
From a market perspective, demand for sustainable varieties of packaging continues to grow across the globe. Market value is currently worth an estimated $90bn, a figure expected to increase to around $150bn by the middle of the present decade. According to data from Pike Research, the sustainable sector is expected to increase its share of the global packaging industry from around a fifth to nearly a third during this time. Pike Research MD Clint Wheelock says: “The move towards more environmentally responsible packaging is being embraced by consumers, manufacturers, retailers, advocacy groups and world governments alike.”
The food and drinks industry accounts for a sizeable percentage of the global market for sustainable packaging. Research indicates that consumer-facing markets such as food and drinks (as well as cosmetics and personal care goods) have proved particularly receptive to sustainable packaging, whereas lower levels of demand exist within industries such as pharmaceuticals and medical equipment, which are also hindered by regulatory concerns. In geographical terms, the US and Europe currently account for around 70% of the world market for sustainable packaging, although much of the future growth in demand is expected to come from the Asia-Pacific region.
