Paper Packaging's sustainable future22 October 2018
Consumer demand and environmental challenges will drive the future for paper, says Dr Liz Wilks, APP European director, sustainability and stakeholder outreach, in this special feature.
Paper and board accounts for more than a third of the world’s growing packaging market, a global sector estimated to top $1 trillion by 2021. There are a number of drivers for this increase: rising demand in the developing world triggered by changing consumer behaviours, particularly around food and drink; brands looking to make the packaging for their goods work harder by offering a more premium experience or by building in personalisation and anti-counterfeiting measures; and crucially, consumers and retailers becoming more concerned with how packaging is manufactured and disposed of.
Concern around the environmental impact and sustainability of packaging production and disposal now dominates the industry as wider public opinion catches up with political debate about the effect waste is having on our world. Dutch supermarket Ekoplaza launched its first plastic free aisle in February, offering up to 700 plastic free products to choose from, while in the UK retailers like supermarket chain ASDA have announced action to reduce their plastic usage. At a regulatory level, the EU has committed to making 80% of packaging waste recyclable or reusable by 2030, while both the EU and the British Government have announced their intention to ban single-use plastic items such as cotton buds and drinking straws. All of this has of course been magnified by China’s decision to stop taking the rest of the world’s rubbish to recycle.
On the face of it this puts paper in a strong position to continue to grow as the packing material of choice and be the obvious replacement for all the plastic being removed from the supply chain. After all, many paper-based products can be recycled up to seven times. But paper still needs to prove its green credentials when it comes to both the production of products and the recycling and disposal of the huge amount of carboard and paper we consume.
Together the top 15 nations consumed over 301 million metric tons of paper and cardboard products in 2016. China consumed over 106 million metric tons alone, while the US used almost 71 million metric tons. However, the United States consumed much larger volumes per person at 229 kilograms per capita, while China used about 74 kilograms per capita. In terms of usage, the rest of the world trails in comparison to China and the US, with Japan consuming almost 26.5 million metric tons, Germany using over 20.5 million metric tons and the UK 8.6 million metric tons. By comparison emerging markets are even farther behind, with usage in India at 13.5 million metric tons, whilst Indonesia is 7.7 million metric tons.
The global green packaging market is anticipated to reach $237.8 billion by 2024, at a compound annual growth rate (CAGR) of 5.7% from 2016 to 2024. In terms of revenue, the recycled content packaging segment is projected to grow at a rate of 5.2% over the same period. The North American market is anticipated to exceed $70.4 billion by 2024, while Europe is projected to witness a remarkable 5.5% annual growth rate owing to increasing demand from the healthcare sector. Outside the US and Europe, Asian countries, especially India and China, are also expected to see strong growth in the coming years.
But the growing demand for paper and paperboard brings its own challenges, in terms of performance, recycling and disposal, as well as the environmental impact of producing the raw material. Take the food and beverage sector, for example, which dominated the global green packaging market in 2015 with a share of over 58.0%. Today that growth is being driven by the out-of-home food sector, with the home delivery and the fast-casual food market in Europe forecast to be bigger than the full-service restaurant industry by 2020. These new ways of dining have prompted restaurants and take-away food suppliers to consider how they present and transport their food, resulting in the development of more convenient, innovative and eye-catching packaging.
Besides ensuring the temperature and taste of the meal, out-of-home packaging is an important way of convincing customers they are enjoying a premium quality dining experience in their own home. As well as having attractive designs on their containers, the act of opening is considered an exciting part of the dining experience for diners, so innovative ways to open packaging help to reinforce brand identities. Quality packaging also helps create a healthier brand image that appeals to millennials, with customers willing to pay up to 40% more for their meal compared with traditional takeaways, so long as the delivery is quick and the dining experience is good.
Sustainability is an important consideration for this audience, with a 2016 consumer survey conducted by ORC International for APP finding that sustainability and environmental considerations, including the use of recycled materials in packaging, are extremely or very important to 50% of U.S. adults when grocery and food shopping.
By substituting plastic and polystyrene packaging with paperboard alternatives, out-of-home packaging is already well on the way to becoming more sustainable, but the use of paper for food packaging does pose technical challenges. Recycled paper stock can be contaminated by mineral oils or polymer coatings that are used to make disposable paper containers waterproof, so for food safety reasons, recycled pulp is unsuitable for use in food packaging. To improve the recyclability of paper pulp for food packaging, new sustainable coatings are being developed, such as the water-based coating used in APP’s Foopak Bio Natura Cup, which was launched last year.
Suitable for hot food and beverages, Bio Natura Cup uses a biodegradable water-based coating instead of traditional petroleum-based coatings and is 100% bio-degradable and recyclable. This eliminates the need for expensive plastic separation in the recycling process, which many recycling facilities cannot handle. Testing by the Isega Institute in Germany found that the Bio Natura Cup’s paper stock can completely break down by decomposing in a matter of 12 weeks and it can be composted in either an industrial facility or home compost pile.
APP’s 2017 Paper and Packaging Consumer Trends Report found 45% of U.S. consumers surveyed want restaurants and food product brands to offer packaging that is biodegradable as an alternative to food packaging that cannot be made recyclable. Just over half (52%) of all respondents ranked biodegradable as an important attribute of food packaging products.
The Foopak range is APP’s premier portfolio of food contact packaging designed for use by food and beverage customers across manufacturing and retail, including stores, take-aways and delivery operations. Alongside the Bio Natura Cup, the range also includes Foopak Baking Paper, a high density smooth coated paper that comes in various weights and can be converted into cupcake papers, die-cut shapes and sheets. It can also be used for liners in frozen food packaging, bakery products and baking sheets for professional kitchen applications.
The Delipac the range is award winning in the UK, being named 'One to Watch' Best Eco Product in this year’s Global Good Awards, as well as being awarded Best Sustainable and Innovative Packaging in the EcoPack Challenge in 2017.
APP also offers Sinar Kraft, a premier multilayer packaging board range, consisting of pure bleached hardwood kraft fibres with an inner unbleached kraft fibre layer. The combination of excellent printability with a minimum guaranteed brightness of 83%, along with strength and moisture resistance qualities, makes the board ideally suited to high quality dry and frozen food packaging, along with applications across cosmetics and pharmaceutical packaging. In-keeping with APP’s commitment to sustainability, Sinar Kraft is certified by Programme for the Endorsement of Forest Certification (PEFC).
Another area of growth and challenge in packaging is in luxury goods. APP’s report into the sector, “Paper based packaging trends to 2019”, produced with Smithers Pira in 2016, put the value of global market for luxury goods packaging at £9bn in 2014, forecasting an increase of 19% to £11.2bn by 2019. In 2016, cosmetics and fragrances accounted for 43% of sales of luxury goods and have continued to be the main driver of growth within the sector, growing at around 6% per annum. Regionally, APP estimated the growth of luxury goods at 3% per annum in Western Europe and North America, rising to 6% in the emerging consumer markets of Asia-Pacific, and as much as 9% in South and Central America. We are about to run that research again so it’ll be interesting to see just how much it has grown.
Consumer demand, particularly in emerging markets, and the globalisation of brands, is driving the growth of luxury goods. Packaging needs to provide a premium feel, as well as incorporating innovations such as anti-counterfeiting measures, along with personalisation and features to interact with digital technology. The proliferation of 3D printing, for example, enables manufacturers to transform designs into products within hours, allowing brands to quickly develop short runs of new items to test with consumers.
Here again, consumers, and therefore the brands they are buying from, also expect their packaging to be made from sustainable materials and to be recyclable. According to APP’s 2017 Paper and Packaging Consumer Trends Report, only 18% of US shoppers indicated they either strongly or somewhat agree that buying online is better for the environment than shopping in stores. Half of all consumers agree that the packaging of delivery items is often much larger than the item itself (52%), and that stores need to do a better job of sending delivery items in packaging that better fits the product’s size and reduce waste (48%).
Online shopping is getting ever bigger, with analyst eMarketer estimating that global retail e-commerce sales rose by 23.2% to £1.7 trillion in 2017, accounting for one-tenth of total retail sales worldwide. With companies like Amazon being criticised on social media for using up to 45ft of paper packaging to protect a wall calendar, retailers have to optimise the amount of packaging material used and reduce their footprint with sustainable solutions such as right-size packaging.
Whilst retailers and converters play a vital role in understanding the consumer’s needs and creating packaging that performs well and addresses concerns around sustainability, companies like APP need to show leadership in what’s possible for the production of paper and pulp.
This year APP marked the fifth anniversary of its landmark sustainability commitment, the Forest Conservation Policy (FCP). The policy, which was developed with the assistance of NGOs, committed APP to achieving a deforestation-free supply chain and become a more sustainable business. The company has invested $300m in initiatives such as landscape restoration, peatland research and community engagement. This has resulted in the ending of natural forest conversion by our pulpwood suppliers and transitioning to sourcing 100% plantation fibre for production, as well as ensuring our supply chain continues to be free from deforestation.
As global awareness increases of the need for a more sustainable way of producing and recycling the things we use, along with ever-growing consumer demand, paper remains in a strong position to become the best material for the world’s packaging needs. But this needs to be achieved by companies such as APP working closely with everybody in the supply chain, from the creation of the trees that provide our pulp, through to the converters that create the packaging, and the brands and retailers who sell the products.
APP China Perspective – Box out
Kevin Zhu, General Manager of Corporate Affairs, APP China
1. How is APP China is addressing local requirements to move away from plastic in packaging?
To echo the regulation and market demand to move away plastic from packaging, APP China is actively working together with Industry Associations and relevant standards makers at the regulatory level. In the meantime, our mills, such as Jingui Mill in Guangxi Province, are proactively working on R&D, to ensure we have sufficient quality products to meet the market demand.
In the marketplace, since 2017, we also collaborate with major Order Delivery companies in China to promote our paper packaging for the Food Delivery sector. The ultimate target is to replace the plastic packaging with paper packaging.
2. As the number of mass producers of paper starts to diminish (because unsustainable, uncertified), how is APP managing to stay competitive, innovative and sustainable, without losing ground or market share?
As the market demand for certified sustainable paper products grows, APP has made significant investment in sustainability in line with its Forest Conservation Policy commitments. This includes conducting High Carbon Stock and High Conservation Value assessments across all our suppliers, implementing a Supplier Evaluation & Risk Assessment process to secure the supply chain, and establishing programmes to protect our forests and plantations from fires and illegal deforestation.
APP has also invested in research and development to produce more sustainable paper products and upgrading technologies within our mills to allow us to do more, faster. We are also embracing improved forestry processes that maximise output by reducing loss from waste and inefficient processes. This will allow us to make more efficient use of limited plantation land.
Together, these actions have helped us to stay competitive, even as we rise to meet more stringent sustainability standards.
3. On innovation, the plastics industry is constantly updating their ability to retain or reuse plastics. Paper is the most widely recycled material worldwide but only comprises 30% of the packaging mix. Can paper do more and be more ubiquitous?
Paper is not always the correct answer to packaging challenges, but it can certainly play a bigger role than it currently does. New paper solutions must continue to promote, not hamper, recyclability, which means research and innovation to produce better, more sustainable paper-composites.
One example of the sort of development work is the FooPak Bio Natura range which eliminates the use of plastic lining in paper food packaging. Without the lining, the packaging is much more easily recycled and also biodegrades more quickly.
As more innovative paper packaging solutions come to market, paper's share of the packaging mix will ultimately grow.