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Sustainability key driver in beverage packaging

The beverage packaging market is still growing, due to population growth and consumer trends, such as personalization/convenience, and the preference for smaller formats. However, this market increase also leads to consumer and government concern about package end-of-life issues. Therefore, sustainability
has become increasingly important.

 

First of all, what are the major trends that shape the market in general and packaging design in particular? In 2016, Mintel published an interesting study which goes deeper into the drivers. The research agency identifies four underlying developments: personalization, clean/clear labelling, packaging mobilization and appealing to the senses.
Personalization, the effort to ‘connect’ major brands to a personal experience, is very much a design-issue, Mintel’s global packaging director David Luttenberger says. ‘There’s a parallel path between brands striving to engage customers on a more personal level and consumers’ expectations for packaging to deliver that experience.’

According to Mintel, this development has been fuelled by (information) technology which enables manufacturers to advance into the realm of mass customization. This means that the industry is able to deal with a tremendous increase in variety and customization without the corresponding increase in costs. The plus would be to create a ‘relationship’ with individual consumers which would go beyond the mundane. This also would translate in higher margins. Almost a quarter of Chinese customers stated they would pay more for personalized packaging (Mintel), and 61 per cent of US customers feel more positive about a brand when marketing messages are personalized (source: Forbes).
One of the most noteworthy personalized packaging campaigns has been Share a Coke, started in 2010 by Coca-Cola. Consumers were able to choose from a list of popular names which are printed on 8 oz-bottles in several major markets around the globe. The idea behind the campaign, Coca-Cola said, is to personalize but also to promote the sharing-aspect, hence the name of the campaign. Chris Deere, head of brand activation at Coca-Cola Great Britain, said in the Guardian (2013) that the campaign is about sharing: ‘We wanted people not just to find bottles with their own names on, but to surprise a friend or someone they love by seeking out a bottle with their name on it.’

Communicating through packaging

One aspect of beverage packaging which has been more relevant and important to consumers is cleaner and clearer labeling. With growing concerns about the health impact of (sugary) beverages and additives, consumers expect clarity and not a cluttered label with an avalanche of marketing messages. They want to assess the product as quickly and easily as possible by having a clear view on the most important product parameters: the ingredients and nutritional value, function and safety.

This consumer need for clear information can be facilitated/augmented by consumer help lines but also packaging could be used as a communication medium (packaging mobilization).
Several manufacturers are working with so-called “mobile-engaged packaging”. Based on proven technologies, such as Bluetooth LE or NFC (near field communication), manufacturers are able to incorporate small, ultra thin sensors into packaging labels that can connect to consumer’s smart phones. In 2015, Diageo introduced NFC-technology on its Johnnie Walker Blue Label-bottle. The prototype uses extremely thin, electronic sensors which can tell whether the bottle has been opened or not as well as its location in the supply chain.
And these sensors also mean Diageo can send information to customers who scan the bottle with their smartphones - and change that information, thanks to the sensors being “always connected”. For instance, Diageo could upload promotional offers while the bottle is in the shop but change that information to cocktail recipes when the sensors show the bottle has been opened at home.

Touch and feel
The final major trend identified by Mintel is appealing to (various) senses. This is not a recent development, the research agency admits, but a trend that has been in effect for some time. Basically, it implies that the visual stimulus remains important, but that other senses can also be stimulated in order to increase the consumer experience of the product/brand. The touch and feel of a packaging is especially interesting given the relationship between touch which is related to the orbitofrontal cortex area of the brain - and the willingness to purchase an item and, more importantly, to pay more for this item. As consumers, there are certain tactile qualities that we tend to associate with feelings of “luxury,” “quality,” “freshness” and more. Tactility can be translated into the world of beverage packaging by embossing, laser-etching, molded patterns or the use of specialty materials (new plastics blends, more about this later in the article).

Move way from CSDs
Besides the aforementioned packaging drivers, there are the underlying consumer trends that shape the beverage market. In general, there is a trend away from carbonated beverages towards water- and/or dairy-based drinks. According to forecasts from Canadean, the carbonated soft drinks (CSD) market currently amounts to 228 billion litres of consumed volume globally, and will grow to 243 billion litres by 2018. This growth, however, will be mainly realized by emerging markets. In mature markets, such as USA, carbonated beverages are losing market share with bottled water-sales slowly but surely rising. Bottlewater.org expects that by the end of this century bottled water will have overtaken CSD’s as the largest market. Also CSD-manufacturers, such as Pepsi, are noticing the changing tide in beverage consumption. In October 2015, Indira Nooyi, CEO of PepsiCo told investors that carbonated soft drinks are “a thing of the past” and said she expected the company’s snack and bottled tea  businesses to drive future sales.

Smaller formats
The above shift in beverage consumption indicates that health has become an increasingly important factor. Health as well as convenience and consumer need for variety - also are having implications on the packaging front, particularly in the downsizing of formats.
This trend away from large packaging formats towards smaller size is a change in the paradigm of supersizing, basically rewarding the purchase and consumption of large amounts of (sugary) beverages. “As you downsize packaging, you’re realizing, especially on the sugar side of things, that people want to limit their intake of sugar, but they still want a Coke”, said Brian Reed, principal of market structure at IRI Worldwide, on Fooddive.com. “They just don’t want a lot of Coke.”

Industry experts foresee this downsizing trend to continue, fuelled by demographics around the world, such as ageing populations in established markets, the rise of smaller (one-person) households and the increased mobility among younger consumers in emerging markets, such as India and China. Another reason is the gain in profitability for the industry as the price per litre increases in smaller formats. The variety within the smaller-size range is also a way to keep consumers interested in beverage brands. Variety is the spice of life, also in beverages apparently.

Environmental impact
The above increase in smaller packaging formats, however, also has a downside: the impact of (beverage) packaging on the environment, which is likely to increase as the amount per packaging material per litre will likely go op. With the increase awareness of the growing presence of plastic waste in the aquatic environment, consumers - mainly in established markets - are more sensitive to and critical of plastic packaging materials, especially food packaging given its visibility and ubiquity.

These concerns have to addressed and dealt with by the industry, with other stakeholders such as NGO’s, governments and other players including plastic recyclers and/or plastics manufacturers/compounders. One path is to recycle existing packaging formats, which is customary with aluminum cans, glass, carton or PET. Recycling, however, is only effective if these materials can be brought into a loop. Several countries have set up plastic collection and recycling schemes that are very effective. For example, the Plastic Heroes-campaign in the Netherlands, directed at several plastic types, including smaller-size PET-bottles, has proven to be quite successful. With PET-recycling, it is technically possible to breakdown the PET into monomers with which new PET-bottles can be made in a blend with virgin PET. Other packaging types, for example cartons, are made up of several materials, typically laminates to protect the product content. This in turn makes recycling a costly process. Ideally, monomaterials would paint a rosier end-of-life picture for these packaging types.

bioPE for PE
Tetra Pak, for example, has indicated it strives towards 100 percent renewable packaging. For its chilled packaging portfolio it aims to use biobased plastics - bioPE - to replace fossil-based HDPE and LDPE. High Density Poly Ethylene makes up the lid, whereas Low Density Poly Ethylene is used in the two, separate laminates which are applied to the outside and the inside of the carton. By using biobased plastics, Tetra Pak is able to lower its CO2-footprint for its materials because BioPE (Braskem) is made from renewable material (sugar from sugar cane) which stores CO2 during its “life”. The use of a drop-in - bioPE being chemically identical to fossil PE - enables a seamless transition, the company says. No adaptations are needed for the production lines of Tetra Pak’s customers.

For its ambient beverage packaging line, Tetra Pak is being faced with the ‘aluminum-challenge’. This barrier material is necessary for the oxygen- and light barrier properties, needed for fruit juices or UHT-dairy drinks. ‘We are investigating the possibilities of replacing the aluminum layer of 6 microns by a biobased material’, a spokeswoman for Tetra Pak states. ‘I cannot go into details at the moment. The aluminum we use now is separated during the pulping process. Unfortunately, the aluminum cannot be used for food applications due to food safety regulation. Therefore, this material is being downcycled for use in other applications.’
 
BioPET
PE (HDPE and LDPE) has bio-PE as a ‘greener’ alternative. For PET (Poly Ethylene Terephthalate), bio-PET and PEF are (partly) biobased alternatives, the former being available while the latter is still under development. BioPET is already maturing with a projected market size of $12.6 billion (€11.3 billion)by 2020 according to Radiant Insights, bottles will take up roughly 75 percent of this volume. The research agency states that the “growing preference of biopolymers in numerous applications coupled with favourable government regulations supporting sustainable packaging is likely to drive bio-PET market demand. Adoption of protocols such as Kyoto and Montreal in countries like Japan, Canada and the U.S. is expected to reduce dependency on products contributing towards carbon emissions.” Major companies also are interested in biobased drop-ins, partly because of marketing objectives, partly because of potential “pricing on carbon”.

New alternative material
PEF (poly ethylene furanoate) is not a drop-in, like bio-PET, but a new polymer which has been developed by Avantium. The Dutch company works closely with various parties across the value chain, including Coca-Cola, to polymerize PEF into a 100 percent biobased bottle. The plus side of PEF, compared with PET, are its barrier properties that especially come into play with smaller size packaging formats (< 33cl). ‘Avantium’s research has proven that PEF bottles outperform PET bottles in many areas, particularly barrier properties (the ability of the polymer to withstand gas permeability through the bottle)’, the company’s website says. ‘PEF’s ability to seal out oxygen, for example, results in longer-lasting carbonated drinks and extended shelf life.’

These benefits make PEF into an interesting proposition, not only from an ecological but also economical perspective. In terms of end of life, PEF can be recycled into PEF. PEF can also be recycled into PET without impacting the mechanical and physical properties of PET, Avantium claims.
Biobased materials such as bio-PET and PEF are likely to replace fossil-based plastics. Of course other factors come into play, such as the oil price and price levels for virgin plastics. With current oil prices, it is very difficult for biobased alternatives, especially drop-ins, to compete on price. For the longer term, however, biobased materials seem like the way to go.


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