Given the megatrend of urbanisation, packaging is simply an everyday essential of modern living and an asset to development, according to Jane Bickerstaffe, director of INCPEN, the Industry Council for research on Packaging & the Environment.
“The human race could not exist today without packaging,” she says. “Over 50 per cent of people (70 per cent in Europe) now live in urban areas, so food and other products have to be produced remotely and, protected by packaging, transported to them.”
Placed in this wider sustainability context, negative perceptions about packaging impacts are just plain wrong, argues Nicholas Mockett, head of packaging M&A, at Moorgate Capital. “It is a fallacy that packaging is bad for the environment. Packaging is a green technology,” he says. “For example, packaging makes food live longer and typically has only a fraction of its carbon footprint. Moreover, most packaging can be recycled.”
The key is for brands to make more environmental choices easy to adopt and part of an enhanced service, which also delivers cost-saving and other tangible benefits
However, it appears the public is not listening. Increasingly conscious of the most visible impacts of packaging waste on local and marine environments, namely street litter and ocean plastic, consumers demand more or rather, less.
That is not to say they practise what they preach, in terms of recycling. Growth in kerbside collection levels has slowed. So, despite the fact 98 per cent of local authorities offer a collection service, barely more than half the 500 plastic bottles used every year by the average UK household actually get recycled. According to RECOUP, that means 15 million bottles a day fail to make collection.
Nevertheless, waste is essentially still a blame game and packaging a soft target. Producers remain under pressure to respond to client concerns about rising reputational risk, says Richard Coles, director of Emagine Packaging. “A growing number of brands are adopting sustainability strategies to meet current and future needs of increasingly eco-aware consumers, particularly millennials,” he says. “These businesses recognise sustainable packaging plays an important role in communicating ecologically and socially responsible brand values that can be critical for competitive edge.”
Sustainability is effectively one of the success factors in the added-value mix, agrees Dr Chris Thorpe, director of Intelligent Design Associates and leader of the new circular economy group at the Royal College of Art. “There is already an openness on the part of the consumer towards more sustainable options, as evidenced by the emergent reusable cup phenomena in the coffee sector,” he says. “The key is for brands to make more environmental choices easy to adopt and part of an enhanced service, which also delivers cost-saving and other tangible benefits.”
Figures from Forum for the Future research into scaling disruptive innovation in sustainable packaging support this view, with 69 per cent of people surveyed considering sustainable packaging a top concern when grocery shopping, ranking it slightly higher than animal welfare and genetically modified organisms. Some 68 per cent would even consider switching beverage brand for one with better environmental credentials, but only if taste and price were the same – and there is the kicker for sustainable packaging.
The question is, does the business case add up?
On one side of the equation sits the packaging sector – a huge and growing, resource-hungry industry, forecast by Smithers Pira to reach a global market value of almost $1 trillion ($997 billion) by 2020, yet responsible for 156.9kg of waste a year from each and every European Union inhabitant. On the other side is found the circular economy, which could itself deliver overall benefits of €1.8 trillion to the EU by 2030, according to figures from the Ellen MacArthur Foundation.
Doing a simple sustainability sum seems to suggest that balancing the two sides could create both significant environmental benefit and substantial business opportunity.
Unfortunately, just because that opportunity is big and clever, does not also make it easy, observes Christina Välimäki, chemicals senior director at Elsevier. “Sustainability is a more complex issue than it initially appears,” she says. “When it comes to packaging materials, manufacturers often face multiple competing resource demands and need to make a judgment call. These decisions are further complicated by knock-on effects, so mapping environmental impact is tricky at the best of times.”
Any resultant uplift in product price still presents a potential sales risk, though, maintains Mr Mockett. “If the end-consumer will pay a premium for the ‘sustainable’ packaging, the brand owner can justify the higher costs and the packaging manufacturer can be rewarded for investing in innovation,” he says. “But, it is a big ‘if’. Consumers, when surveyed, may say they will pay more, but results can be quite different.”
The good news for sustainable packaging is that material innovation seems everywhere, including solutions that are biobased and biodegradable, reusable, refillable and recyclable, collectable and compostable, even good enough to grow or eat. Options range from mushroom-based Ecovative protection for shipping computer hardware; via plantable gift wrap from Eden’s Paper embedded with vegetable seeds; to six-pack Saltwater Brewery beer rings that double as fish food.
It is one thing to be innovative, however another to be disruptive. Innovation needs scale to become a game-changer and, for Mr Coles, such market transformation calls for collaboration to brainstorm and bankroll development. “The funding and scaling of ‘breakthrough innovation’ packaging solutions should be a strategic collaborative partnership enterprise, involving key stakeholders, such as brand owners, packaging manufacturers, material suppliers, resource recovery organisations and investors,” he says.
Mr Coles cites examples such as the Synvina joint-venture between chemicals giant BASF and Avantium, in partnership with Coca-Cola, Danone and ALPLA, as well as Tetra Rex, to produce the world’s first fully renewable drinks carton for chilled milk. Biobased plastics used by Tetra Pak in combination with Forest Stewardship Council-certified paperboard are produced by Brazilian chemical company, Braskem, sourcing feedstock from sugarcane. Support from Finnish dairy Valio proved vital to the early commercialisation of the concept, with sales of 100 million units now forecast this year.
Of course, the usual assumption with sustainable packaging is that it is all about renewable material choices and reducing resource-use in production. Traditional, organic and low or no-tech options often tick the eco-box best.
The new frontier of sustainable packaging, however, is arguably active and intelligent, says Andy Hobsbawm, co-founder and chief marketing officer of internet of things smart products platform EVRYTHNG. “The definition of a modern product and its packaging is a combination of three elements: hardware, software and real-time data,” he says. “While there are many hardware innovations in materials technology, the biggest sustainable innovation opportunity is in the intangibles of software and data.”
According to Mr Hobsbawm, once smart packaging connects to the cloud, it can generate and capture real-time product data to help optimise use, efficiency and, ultimately, disposal.
Digitally connected products also become a brand-controlled communication channel. This new media platform empowers companies to inform, educate and inspire consumers towards more sustainable behaviour. For example, clothing could tell you how to care for it by washing at lower temperatures or direct you to the nearest recycling centre at its end of life.
It is this additional digital dimension to packaging that will really enable mainstreaming of sustainability. Mr Hobsbawm concludes: “Sustainability was a niche consideration for most packaging companies five years ago; today it’s a central part of their positioning, solutions and go-to-market strategies. Most probably don’t do this out of eco or ethical principles, but because they are responding to market demand.”
For sustainable packaging, the business case just got real.