Reams of progress – sustainable paper-based packaging7 May 2015
Consumer demand and tighter legislation are just two factors that will boost growth of paper-based packaging’s market share, while rising raw material costs have moved sustainability to prime position on every packaging manager’s agenda. Packaging & Converting Intelligence takes a closer look at how sustainability in paper is developing in leaps and bounds.
Every day, more companies decide to invest in eco-friendly packaging - like paper. Of the recycled packaging materials available, paper continues to account for the majority of demand; with 34%, paper and board has the second-largest market share in the packaging industry, behind flexible and rigid plastics with 37%. The importance of packaging sustainability will continue to grow over the next two years and is expected to become more of a consideration than the cost factor - today's companies' number-one challenge.
Paper-based packaging offers a versatile and responsible solution for manufacturers, retailers and consumers. Since paper is biodegradable and recyclable, it is often seen by the final consumer as a preferred packaging material. Improving paper's barrier properties is seen as a critical step in increasing its viability as a packaging material. To adhere to food-safety regulations, water-based technology is gaining acceptance. Water-based coatings can be formulated to meet the requirements of a wide range of food packaging.
In a Confederation of European Paper Industries (CEPI) study from 2012, more than 80% of European consumers preferred paper-based packaging and labels, believing paper packaging to be more convenient, and that manufacturers and brand-owners should embrace it more than consumers have seen them doing so far. Almost every news article on sustainability mentions that there is a growing awareness of environmental issues among the consumers, although food safety remains the main concern.
Mark Caul, technical manager for packaging at Tesco, says: "When it comes to broad subjects such as plastics, cardboard and paper, aluminium and steel, they all have a place, so substitution is much harder than people think. You really have to be careful when substituting materials based on environmental reasons because there could be unintended consequences.
"Environmental, sustainability, green... these words are all used, and they need to be used properly with consideration. If I look at the carbon footprint of packaging of a business, typically for us it's about 5%. Food waste is high on our agenda.
"Packaging is more about protecting the food and [developing] new packaging that is fit for purpose - there are great advantages over some materials and disadvantages over some others. What we see is responsible timber sourcing. You can see that in products such as benches, and I can foresee the day that it might hit packaging, in which case, the traceability of your sourcing is going to be the big important thing."
Government regulations that mandate packaging recycling rates have helped boost the paper market as companies aim to increase their resource efficiency by collecting more recycled material. While companies still invest in developing new types of sustainable packaging, such as plant-based plastic, or bio-plastic, the term 'biodegradable' has become tainted since discussions over its definition and real-life properties have started.
Large quantities of biodegradable packaging end up in landfill where they are deprived of oxygen, decompose and end up generating methane, the extra-potent greenhouse gas. Landfill is the third-largest source of man-made methane emissions to the atmosphere; if packaging weren't biodegradable, landfill would be less of a nuisance to the environment.
One way companies are dealing with stricter regulations is to decrease packaging size and make packaging more lightweight, allowing them to save on transportation costs and carbon footprint.
The global consumer packaging market is currently valued at approximately €300 billion, of which the paper and carton industry represents a third. The future promises to be bright for the paper and carton industry. The sector is expected to experience sustained growth of 5% annually until 2018. This will result in a global market of more than 30 million tons with an approximate value of €50 billion.
The BRICS markets represent roughly a third of global demand, with the Americas accounting for a third and Europe for approximately the final third. Oceania and the African continent account for a minute amount according to a Forest Stewardship Council (FSC) report. Paper packaging sales in Europe have only gone up slightly overall, although France is an exception: it saw a decline in sales in 2013 due to not adapting the selling price of final products to the rising costs of raw materials.
China's middle class of 150 million people is expected to reach 500 million within the next ten years, equalling the total population of today's EU. With Asia's steady 7% annual economic growth and its middle-class population growing, brands are focusing on how to get new consumers and how to keep them. As long as the paper packaging industry hasn't solved the various barrier limitations problems, plastic will continue to grow on the global market.
For developing countries, rigid plastic materials have rapidly taken a strong market share as the processing industry for those materials requires significantly less capital than glass, metal or paper.
As wealth in developing markets grows, we will see a rise in recycled packaging consumption. Since food packaging makes up a large chunk of municipal solid waste, companies may look at recycled paper packaging as a way to reduce their landfill waste.
Innovation in the food industry has prompted greater demands for paper packaging. Paper packaging is increasingly being used as a substitute for polystyrene. The paper packaging industry has been developing barrier-coated boards and papers, helping the industry to close the gap with the plastic packaging industry, which is also expected to grow.
In October 2014, Tetra Pak launched the industry's first carton made entirely from plant-based renewable packaging materials. The carton will be the first in the market to have bio-based low-density polyethylene (LDPE) films and bio-based high-density polyethylene (HDPE) caps, which are derived from sugar cane, in addition to FSC-certified paperboard.
Colours have a significant impact on the mood and behaviour of people. For instance, pale yellow will never be seen in hospitals. So it follows that the success of a product can be significantly affected by the choice of colours on its packaging.
According to a study by the Johannes Gutenberg University in Mainz, France, the colour of a package proves to be the most important factor in consumers' final-second decision-making. In packaging design, colour schemes are differentiated according to the age, gender, culture and average income of the respective target group.
While sustainability design used to be limited to brown packaging, earthy colours and textured paper - and all three are still very popular - today, brands dare to move away from the clichés. Companies often remain loyal to their brand colour scheme to reap the benefits of recognisability.Demographic targeting and enduring packaging are also incredibly important, as Lotte Krekels, packaging manager at Carrefour Belgium, explains: "We have our Carrefour Kids line of products, which has its own website and product designs. We are collaborating with a local Belgian children's book illustrator who has illustrated the well-known Danish Cookies tin in a Polish design style after the illustrators' one-year stay in Poznan. We hope that consumers will keep the tin and use it after the cookies are gone."
Play your card right
With the European recession expected to last until the end of 2017, managing costs is vital for a company's survival. At a time when China's double-digit growth has become single-digit, global demand for paper pulp is lagging. On top of that, South America has become an important pulp and paper-producing continent. Its capacity expansion is enabled by an increase in agricultural productivity; arable land mass is being used with short-rotation eucalyptus and shorter-rotation pine, which are unavailable in colder climates. Producers will put 30 million tons of chemical pulp to the global market through to 2020.
Despite increased demand for sustainable packaging on the consumer side and the fact that over two million tons of paper capacity has been shut down in Europe since 2012, demand on the producer side has fallen. Pulp overcapacity is likely to result in lower prices, lowering costs and enabling companies to make the shift from plastics to the more sustainable paper packaging, and thus possibly stimulating the use of paper and board in the growing packaging industry.
This year is the 120th anniversary of the corrugated box; the first was produced in the US in 1895, and up until then, all shipping was done in wooden crates. Having been left aside for a long time, cardboard is back and is being considered the material of the future.
The comeback of cardboard can be explained by how consumers and producers have changed their perception of plastic and its source ingredient: oil. When oil was abundant, inexpensive, and easily and peacefully available, plastic packaging was the obvious choice. This is no longer the case today. Recyclable paper and cardboard have become popular again, all the more so as newly developed bio-based barrier films can be added.
Tech-savvy brand-owners are incorporating new marketing techniques such as smartphone apps and QR codes. Corrugated converters now work with digital print specialists, developing technology to meet the demands of these types of interactive marketing tools.
Digital printing technology has established a beachhead in corrugated packaging, but it is clear the output of these products is not sufficient to gain the interest of mainstream markets. Digital printing is used by 10% of corrugated cardboard users, mostly by the high graphics sector. Digital printing may be perceived as an industry game-changer, but there are many other options a producer can choose from.
The success of corrugated packaging in the retail industry is most tangible in the discount sector: 90% of discounters' products use shelf-ready packaging compared with 40% of non-discounters'. The discounters make use of corrugated packaging's eye-catching designs and efficiency within the shelf-replenishment process. Supermarket discounters are the fastest-growing European retail sector.
German discount pioneers Aldi and Lidl are the two front-runners across the continent, enjoying increasing market share. The Schwarz Group, owner of Lidl, and the Aldi group are forecasted 5.0% and 3.5% growth a year respectively for the next five years, compared with mainstream retailers at less than 2.0%. At Lidl stores, an entire cross-section of food and household items is displayed in corrugated shelf-ready packaging.
Angelika Christ, secretary-general of the European Federation of Corrugated Board Manufacturers says: "Corrugated has become an integral part of the discounter retail business model because it's great for display and reducing cost. That's why it is, and will remain, the number-one choice for discounters."
Heavyweights of the industry
Despite the industry focusing on getting boards lighter while keeping strength similar to their heavier counterparts, there has been the introduction of new heavyweight products. The majority of lightweight boards are being used in western Europe, while eastern Europe has seen an increase in demand for heavyweight boards. Primarily targeted at replacing wooden packaging, some of these heavier products are also able to replace double-walled board with an overall lighter-weight single-wall substitute.
The use of a suitably strong corrugated product as a substitute for wooden packs brings significant weight reduction, improving logistics and handling, and providing cushioning for sensitive heavy products. This creates a more printable outer surface, and circumvents the regulations concerning pest and insect damage in wooden packs.
In terms of sustainability, Jori Ringman, CEPI's sustainability director, is clear on paper's benefits: "Paper-based packaging has a good environmental track record throughout its life cycle, starting from the fact that wood fibres are renewable and recycled to a high degree. In addition to being renewable and recyclable, it is also biodegradable and compostable."
The latest report from the European Recovered Paper Council (ERPC) shows that, at more than 81%, paper and board is the most recycled packaging in Europe. ERPC members are working together closely along the value chain to improve this rate even further in areas such as waste prevention, ecodesign and R&D.
"In Europe, all paper and board has a pedigree: we source from legal, sustainably managed forests and have traceability for the materials used in packaging," Ringman points out. "Paper-based packaging is really a product 'made in Europe', with over 80% of the raw materials coming from the EU. In Europe, paper is showing the way for other materials in traceability and recycling.
"We also are championing water recycling where water is reused several times, having made it possible to reduce water intake by half in the past two decades. In addition, 93% of water intake is now returned to the source in good quality.
"European paper and board has managed to de-couple economic growth from environmental impacts: we have dramatically reduced not only our carbon emissions but our overall environmental impact as well - and performance is still improving. Global food wastage amounts to as much as 1.3 billion tons, or a third of food produced worldwide," he adds. "Paper packaging can be part of a solution to alleviate this serious problem by minimising waste and food damage along the chain."
Corrugated packaging has become an integral part of people's daily life. A recent French study by Ifop showed that 94% of respondents thought cardboard was suitable for packaging and protection, with 90% claiming they regularly buy products packaged in cartons. Most people emphasised the practical aspects of boxes (87%), finding them easy to open (81%), solid (80%) and reusable (69%), and 70 -80% of consumers include the 'green' factor of a product in their buying choices.
Some consumers are even willing to sacrifice performance for a product that has taken the environmental impact into account, and this increasing concern over the environmental impact of packaging has pushed producers and brand-owners to reduce the amount of material used in the production of packaging.