INSIGHT: Social change shifts PET bottle market

05 December 2008 16:45  [Source: ICIS news]

By Nigel Davis

LONDON (ICIS news)--“Bottled water’s 15 minutes are up, the marketing scam is exposed, and it is time to go back to the tap,” said Joe Cressy, campaigns coordinator for the Polaris Institute, a Canadian environmental watchdog group, this week.

Toronto on Wednesday became the largest city to ban municipal purchases of water bottled in polyethylene terephthalate (PET), according to the PI. The decision was made as part of a plan to boost waste diversion.

Consumers in the developed world have become so used to plastic packaging that it is not surprising there is some backlash against it. I’d include the polycarbonate baby and sports bottle bisphenol A scare earlier this year in this category.

Most consumers like what they see - greater convenience, clever new packaging. The packaging sector argues that its products help preserve freshness, extend shelf life, even provide a ‘greener option’ because they help save weight and hence fuel consumption during transportation.

But the green angle on most plastics packaging is a difficult argument to make.

Recycle and re-use has become a buzz phrase. Certainly, some plastics, PET among them, can be recycled. But certain molecules are more easily reformed than others. And there is always the argument - as made so strongly in Toronto: do we really need this stuff?

Suffer the overcrowding of any of the major London airports and try to find water on tap as opposed to expensively bottled water. The bottled water business, particularly, is a marketing exercise run riot.

The problem for the PET, purified terephthalic acid (PTA), dimethyl terephthalate (DMT) and the paraxylene producer is that production growth is determined on the back of studies that foresee still strong demand for polyester textiles and fancy packaging.

The decline in textile demand for polyester in the developed world has been taken up by strong growth in the PET bottle resin market. It now accounts for just over 30% of global polyester demand.

The growth has come mainly from the replacement of glass in soft drink and mineral water bottles. But the polymer has found applications in more niche markets such as sports drinks, fruit juices and food products.

Crystalline PET is finding relatively new use in the packaging for pre-cooked ready meals.

Convenience may mean a great deal to the well heeled consumer but the recession is biting into PET sales. Demand is weaker, alongside that for most polymers. And it became apparent not so long ago that PTA demand was much reduced globally.

One of the factors, it was suggested, was that US consumers were buying more soft drinks in large containers and eschewing the smaller, convenience bottle. A couple of slugs of a well-known fizzy drink, it seems are not enough - it pays to buy in bulk.

The swings in market demand driven pure economics are one thing. The more fundamental shifts in polymer demand growth driven by changing social mores are another. Forget water. Perhaps packaging beer in PET bottles is the next big thing. It is popular in Russia and for sporting events but the attractions are not great. 

The polymer will continue to be essential in use for the packaging of larger volumes. But the top end of the market is likely to suffer in the downturn and from the cry from environmentalists and others that enough is enough.

Plastics are great in that they make life so much easier. In parts of the world the use of plastics to help deliver water may mean the difference between life and death.

Developing world demand for polymers such as PET will continue to grow for textile and for packaging use.

PET is relatively easy to recycle once you have separated it from other plastics and the recyclate is finding lots of new uses. The soft drinks maker Coca-Cola plans to recycle 30% of PET bottles by 2010 and eventually 100%.

UK retail chain Marks & Spencer staff uniforms are made from recycled PET. These are examples of how the industry could fight back on green credentials.

But the small PET water bottle vendor has, perhaps, taken a step too far. In Toronto “back to the tap” is a cry from the heart.

For more on PET visit ICIS chemical intelligence
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By: Nigel Davis
+44 20 8652 3214

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