Marketing and sustainability the twin drivers for consumer product packaging

Boxing clever

17 October 2008 00:00  [Source: ICB]

Retailers are now demanding packaging that will really market products in their stores. Consumers, meanwhile, seek products that are biodegradeable or recyclable.

PACKAGING HAS become thinner, lighter and less expensive, while also being safer for human health and more environmentally friendly.

This seems to be mostly what consumers want. A recent global survey by US-Dutch consultancy Nielsen on packaging showed that, on average, around half of consumers around the world would give up the convenience aspects of packaging, such as ease of transport and stacking and storing at home, if it benefited the environment.

On the other hand, only one-quarter to one-third would do without the hygienic and preservation advantages of packaging to help the environment.

Brand owners, retail chains, packaging producers and their raw material suppliers are endeavoring to respond to these consumer preferences while cutting costs, particularly those stemming from energy and fuel consumption.

ECONOMY COULD SPUR INNOVATION

The global economic downturn will be putting even more pressure on packaging and raw material companies to achieve greater cost effectiveness.

Despite the fall in oil prices, raw material prices still remain relatively high. Plastic converters in Europe reckon that polymer costs now absorb on average one-third of their revenue, compared with around one-quarter a few years ago.

As a result, demand for flexible packaging by consumer product manufacturers and retail chains is likely to continue to be stronger than that for rigid packaging. This trend will favor polymer producers because plastics are lighter and more versatile than the competing materials of paper, metal and glass.

Sales of flexible packaging in Europe, for example, have been growing at around 4-5%/year, according to industry sources. In Europe, flexible packaging has been gaining market share, comprising 21% of all thermoplastic applications in 2006, compared with 27% for rigid packaging, says UK market research firm Applied Market Information (AMI).

In some segments of flexible packaging, such as for shrink and barriers films, sales have been increasing at double-digit levels. Collation shrink and stretch films are replacing carton and board for transit packaging because they reduce transport costs.

AMI predicts that by 2012, the global market for pallet stretch film will increase by one-third, or an average of 7%/year. The company forecasts that by 2011, the pallet stretch film sector will account for 4m tonnes, representing 9% of worldwide demand for polyethylene (PE).

METALLOCENE SHRINK EXPANDS

The demand for collation shrink film, which also has logistical advantages because it can bring together products such as beverage containers in single packs, has boosted sales of polymers made from processes using metallocene catalysts.

AMI estimates that in the European market for collation shrink film, applications of metallocene resins have been rising by more than 60%/year. But in the packaging film sector as whole, metallocene polymers still account for less than 10% of sales.

Producers of metallocene polymers have been introducing new grades to extend the scope of the plastics. US major ExxonMobil Chemical this year launched a single-resin metallocene polyethylene (mPE) for making films for collation and pallet shrink, agricultural greenhouse films, heavy duty bags and for lamination applications.

Besides reducing inventory costs by replacing blends, the mPE facilitates faster film processing, lower extrusion temperatures and downgauging of more than 20%.

Netherlands-based polymers producer LyondellBasell has just introduced a metallocene-based polyolefin for use in transparent rigid packaging in segments such as foods and beverages, storage containers and CD/DVD cases. With the polymer, converters can achieve only 2% haze in a 1mm thick plaque. "Transparency at that level can now be compared to polycarbonate [PC] and other engineering plastics that deliver glass-like clarity," says Amit Gupta, LyondellBasell's global marketing manager for the new resin.

The clarity of metallocene plastics helps producers of metallocene polymers take advantage of the desire of brand owners, including retailers' private labels, to do more in-store marketing of their products through the packaging. Research shows that around two-thirds of buying decisions are made by consumers at the shop shelf, so the visual identity and appeal of the packaging can be crucial.

The quality of the design of the packaging and of its graphics is a major influence on shoppers. Also the transparency of the packaging material can trigger buying decisions because it makes the product itself visible.

Because of the need for eye-catching graphics, there is a rising need for surface-treatment technologies that improve the quality of printing on packaging substrates, such as carton board, which can be highly porous, or plastic film, on which adhesion of inks can be difficult.

Also there is a greater demand for pigments that provide striking colors and metallic and pearlescent effects, especially for packaging of products requiring high design standards such as cosmetics, personal care products and luxury goods.

"The use of colors and effects in packaging is becoming much more sophisticated," says Mike Yates, head of European business development for inks and printing coating effects at Switzerland-based Ciba Specialty Chemicals, a leading manufacturer of pigments and plastic additives. "With a shampoo product, for example, pearlescent pigments can be used in the plastic itself and pearlescent or metallic pigments printed on the label. Designers, printers, ink makers and pigment suppliers have to work closely together."

Visually attractive packaging has to be consistent with a growing consumer awareness of the need to protect the environment. "In more eco-aware markets, including the US, there is an increasing expectation of packaging with a minimal environmental impact," says Shuchi Sethi, Nielsen's vice president, customized research.

Consumer product companies are having to think of ways of both reducing costs and carbon footprints.

The packaging company Superfos, based in Denmark, highlights the lower carbon dioxide (CO2) emissions in the life-cycle of its polypropylene (PP) food containers in comparison to metal ones. "The switch from metal to plastic containers has led to weight reductions of more than 30%, and a more efficient use of storage capacity - factors that save both money and CO2 emissions in the product life-cycle," says Franck Bonfils, CEO of the French food company Un Air d'Ici, which now uses Superfos's PP packaging.

In the cradle-to-cradle life-cycle approach being adapted in the packaging supply chain, the ease of recycling is gaining greater significance. The Nielsen study shows that consumers tend to regard plastics as more difficult to recycle than paper, glass and metal.

Nonetheless, plastics such as polyethylene terephthalate (PET), which, as a material for bottles, can be sorted without much difficulty, have a comparatively high recycling level. Japan's Council for PET Bottle Recycling claimed a recycling rate of 66% in 2006.

Despite their limited availability, bioplastics, made mostly from corn starch, sugar, vegetable oils and cellulose, are popular among consumers, especially in Europe. Research indicates that people perceive them as being biodegradable and easily recyclable, as well as low CO2 emitters. Demand for bioplastics is growing at around 20%/year, mainly down to sales for packaging applications. European Bioplastics is Europe's trade association for bioplastic producers. It forecasts that global bioplastic production capacity will rise from 260,000 tonnes/year in 2007 to 1.5m tonnes/year by 2011.

BIOPLASTICS CAN PROVE DIFFICULT

In response to consumer demand, retailers are introducing bioplastics packaging. But they are finding that because of its low quantity, bioplastic packaging waste is not being accepted by recyclers. Mechanical recyclers claim that because of their different melting points to conventional plastics, bioplastics tend to clog up their equipment.

Some bioplastics, such as PE derived from sugarcane ethanol, are not biodegradable. Some biodegradable materials used in packaging, such as German chemical giant BASF's polyester-based Ecoflex, are not bioplastics. "Ecoflex is biodegradable and compostable, according to EN 13432, which is the European standard that exactly describes which products are biodegradable and thus compostable," says Jens Hamprecht, head of global business for biodegradable products, for BASF.

Nonetheless, many composting plants in Europe will not process any plastics, even those meeting biodegradability standards, because they can't afford the sensor equipment for differentiating one from another.

A major drawback for bioplastics in packaging is that they do not at the moment have the barrier strengths, moisture and temperature resistance of fossil-derived plastics. Consumers will have to wait for years before they are widely available in packaging.

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By: Sean Milmo
+44 20 8652 3214



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