18 November 2011 18:42 [Source: ICB]
By 2020, Coke's PET bottles will all be renewable-based
Bioplastics are no longer a curiosity but a proven feedstock. Multinationals brand owners such as Coca-Cola, Pepsico, Nestle, Danone, Ford, Toyota, Mazda, Procter & Gamble and AT&T already use bioplastics in their products or packaging, and with supply chains growing and governments worldwide instituting policies to encourage their use, more firms in the consumer products sector are expected to adopt them. The immediate benefit to these companies is a continuous improvement in their sustainability profile, notes Jim Lunt, managing director at US consulting firm Jim Lunt & Associates LLC.
"This also translates into improved sales volumes and increased market share," he continues. "Today, I do not believe this leads to increased profits, although it could do so over time," he adds.
Coca-Cola cast an influential vote of confidence in bioplastics with the launch in late 2009 of its own PlantBottle packaging for several branded bottled products. PlantBottle is chemically identical to the polyethylene terephthalate (PET) used widely by the bottling industry, but the monoethylene glycol (MEG) that accounts for 30% of its mass is derived from sugarcane, rather than oil. Petroleum-based terephthalic acid (TPA) contributes the remaining 70%.
Coca-Cola's Scott Vitters, general manager for the PlantBottle Packaging platform, says the company already has the technology to produce 100% bio-based PET, but the challenge is to make it commercially viable for people who buy billions of bottled beverages every day. Coca-Cola expects that it will have used a total of 10bn bottles composed of PlantBottle between its launch and the end of this year, and the company intends to use PlantBottle for all of its PET needs by 2020. Vitters also expects for Coca-Cola to have a commercial solution on 100% plant-based PET by 2015-2016.
"What we've been doing is building an efficient global supply chain for PlantBottle in terms of ingredient sourcing," he says. "Only one facility exists today for the bio-based component of PlantBottle, but we expect that there will be many more plants in the next couple of years." Coca-Cola currently ships the bio-based MEG to its PET producers worldwide.
"Yes, there are premiums that Coca-Cola is paying today to be able to use the PlantBottle, but that premium is largely the result of duties and taxes, not because the technology can't compete," Vitters states. "As we are building our ingredient supply chain, we believe that it will be cost-competitive or even better with traditional PET in the near future."
He adds: "Part of the advantage of manufacturing PlantBottle, from a cost competitive point of view, is that most of our PET supply value chain remains the same."
COMPANIES CATCHING UP
Vitters notes the adoption of PlantBottle packaging by US food company H.J. Heinz as part of Coca-Cola's supply chain expansion plans. Heinz started using PlantBottle in all of its 20-ounce ketchup bottles in June.
Vitters also points out two brand owners that recently announced the use of 30% by weight sugarcane-based PET - Japanese car maker Toyota and US communications firm AT&T. Toyota said in October that it is now using bio-PET plastic in the seat trim, floor carpets and other interior surfaces of its Sai gasoline-electric hybrid sedan being sold in Japan. Toyota has already been using the bio-PET in the trunk lining of its Lexus CT models launched in January.
AT&T announced in September the use of bio-PET in AT&T-branded wireless accessories, which includes most device cases and power accessories. Neither company disclosed the name of its bio-PET supplier.
In March, Coca-Cola's top competitor, PepsiCo, announced its own plans to produce a 100% biobased bottle identical to its petroleum-based PET beverage containers. PepsiCo developed the "green" bottle using biological and chemical processes, says Denise Lefebvre vice president, global beverage packaging at PepsiCo.
PepsiCo's bottle, currently produced at laboratory scale, uses biomass feedstock such as switch grass, pine bark and corn husks. PepsiCo aims to have pilot production of the new bottle in 2012 and upon its success, to move directly to full-scale commercialization, although no timeline was disclosed. The company's goal is to also broaden the feedstock resources to include orange peels, potato peels, oat hulls and other agricultural byproducts from PepsiCo's food business, says Lefebvre.
"PepsiCo is in a unique position to ultimately source agricultural byproducts from our food business to manufacture a more environmentally-preferred bottle for our beverage business. The ability to manufacture our green bottle via a closed loop system is unique to PepsiCo," she adds.
PepsiCo believes its streamlined R&D process will also help the company use the bottle at a price point acceptable to consumers, notes Lefebvre.
Biobased PET is not PepsiCo's first venture into biobased packaging. US snack food subsidiary Frito-Lay began using polylactic acid (PLA) plastic produced by US-based NatureWorks for its SunChips brand packaging in 2010. When consumers complained about the noise produced by the new package, Frito-Lay reformulated, and quieter 100% compostable SunChips bags were rolled out in February.
Other brand owners currently using NatureWorks' Ingeo PLA include yogurt firms Stonyfield Farm in the US and Danone in Germany; electronic equipment firms Canon and Fujitsu; Japanese cosmetic firm Shiseido; and car makers Mazda and Toyota. Steve Davies, NatureWorks' global marketing director, says demand for Ingeo PLA has grown 20-30% annually for the past several years (see related story on page 34).
Coca-Cola also uses Ingeo PLA for the coatings of its fountain drink paper cups. "We are looking at PLA for other potential film and laminate applications within our business," says Vitters. "We did a lot of initial work on PLA, but from a beverage container standpoint, we decided to focus on PET as PLA has challenges not only in functionality needed for beverage containers - especially shelf life - but also in recycling infrastructure."
This year, Coca-Cola began using 100% bio-based high-density polyethylene (HDPE) for its beverage bottles under the Odwalla brand. The sugarcane-based HDPE is made by Brazilian chemical company Braskem. Other companies that use Braskem's sugarcane-based polyethylene (PE) include Danone, Shiseido and US consumer products companies Johnson & Johnson and Procter & Gamble. In August, Swiss company Nestle started using Braskem's biobased PE in bottle caps for Nestle's Brazilian milk brands Ninho and Molico.
Nestle said it is currently involved in over 30 projects to introduce bioplastics in its product packaging portfolio worldwide.
"In terms of growth, Braskem's bio-PE seems to be the leader, as it is flying off the shelves and brands are eagerly adopting it into existing product lines," says Andrew Soare, analyst at US consulting firm Lux Research. "When it comes to picking bioplastic molecules, brand owners have to be careful to avoid any unforeseen performance issues. It is important to note that performance trumps bio-content, and the SunChips issue is a great example of this when the noisy bags forced sales down by 10% at that time," he adds.
THE BIOPLASTIC CHALLENGE
Cost is also an issue when it comes to using bioplastic, says Lunt. He estimates the Coca-Cola PlantBottle to cost over 20% more than conventional PET because of the cost of bio-MEG. "Braskem's PE costs up to 30% more than oil-based HDPE, but they do not approach commodity markets," he adds.
Soare says Braskem is selling bio-PE into niche markets, which are more suitable to the company's relatively small capacity - at 200,000 tonnes/year, only a sliver of the global 100m tonne/year PE market.
He adds: "In some cases, bioplastic premiums can be passed on to the consumer, often for functional reasons. In other cases, a seemingly large premium is a negligible part of the overall cost of a product such as a $4 coffee using a 3-cent bioplastic lid instead of a 1-cent petroleum-based plastic lid."
Converters/compounders are also often squeezed when it comes to using bioplastics, says Lunt. "Between the brand owner and the material supplier, converters/compounders find it difficult to make money from these new bioplastics. Initially, brand owners will pay premiums as high as 30% if they know this will come down with volume. Brand owners will not pay more over the longer term unless they can pass on the cost or significantly increase their market share against competitors and so drive volume," he adds.
Pepsi will start pilot production of its green bottles in 2012
Bioplastic suppliers have been announcing capacity increases to drive costs down. NatureWorks is planning to build in Thailand its second PLA plant, scheduled to start in 2015. Braskem is planning a second Green PE plant in Brazil with a capacity of around 400,000 tonnes, to start in 2014 or 2015.
Pepsi will start pilot production of its green bottles in 2012
This year, US-based Dow Chemical has partnered with Japan chemical firm Mitsui to produce green PE in Brazil. The 350,000 tonne/year plant, in Minas Gerais, is expected to start in 2015. It will be vertically integrated with a 240m liters/year sugarcane ethanol plant that will start in 2013. Brand owners are eager to provide consumers with packaging made from bioplastic because the use of these materials offer several potential benefits, says Jeff Wooster, Dow's global sustainability leader in performance plastics.
"If a bioplastic offers meaningful environmental benefits and improved performance in use, then it may certainly command a premium in the marketplace. Drop-in replacements that minimize capital investment across the value chain are in particularly high demand," he adds.
Another issue that needs to be addressed is sustainable feedstock supply says Coca-Cola's Vitters. Coca-Cola says it spent a year looking at sustainable feedstock options before launching PlantBottle, and it is continually looking at biomass feedstock options such as wood waste, stover and bagasse.
"For our initial step, we decided to use Brazilian sugarcane and [or] molasses that could provide a sustainable starting point that would not compete with food streams [and which would] deliver better environmental performance. We do not think that you can grow a renewable program based off of materials that not only will compete with food but also with agriculture land, which is an even more important focus for us," says Vitters.
He muses: "Given the importance of sugarcane in our products, the quickest way for me to lose my job is to run the sugar prices up."
The most promising and plentiful biomass sources today, says Lunt, are lignocellulosics from food crop waste and from wood pulp. "I believe it will be at least two to three years before we see truly commercial plants converting biomass to a range of chemical intermediates which can be converted to different bioplastics," he adds.
Lunt is organizing a one day workshop entitled "The Future for Bioplastics Feedstocks" to be held in February 2012 in Florida, at which he expects experts from firms including Coca-Cola, NatureWorks and footwear company Nike to address the question: When will brand owners be able to use biomass products instead of food use materials to make bioplastics?
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