I provide marketing and strategy consulting plus market intelligence. Significant and international experience from consumer packaging and the food & beverage industry. For more information please visit https://independent-intelligence.com/
Spending a working life dealing with packaging issues I have always been skeptical to the general idea of ”packaging free” or “edible packaging”. I think it doesn’t make any sense, at all. Wrapping something edible in, again, edible packaging normally creates a demand for yet more and properly protective packaging.
But I may have to reconsider and think out of my limited box.
First, I got to know about Saveggy, a company that have developed a concept of a protective and edible solution for fruit and vegetables.
They can offer a bio-based coating that does the same work normally done by using a plastic film and prolongs the shelf life of produce to minimize food waste. The plant-based coating, fully edible, is sprayed on fruit and veg to extend the shelf life and seems to do the same for a cucumber as a plastic wrap. Brilliant!
Another excellent, actually, usage of the ”packaging free” concept is the pod-like coffee system recently launched by Migros. CoffeeB is a fully compostable coffee ball without the usual aluminium pod. It’s simply coffee pressed to into a ball that fits in one of their CoffeeB machines. That is also the one downside, you have to buy yet another machine to squeeze in to your kitchen.
Well, that was two brilliant new products in an otherwise very dull segment. I wonder what comes next, and I am looking forward to being pleasantly surprised again.
You can easily say that, never before has so many EU-initiatives that concerns the packaging industry been active as right now.
Right now, we are looking at an intense mix of newly launched directives and updating of old ones, all with a direct impact on the packaging industry. Thereby also on the manufacturing industry in general and the food & beverage industry in particular.
You can speculate in why these initiatives are stacked so high at this moment, but it is right in time. Recycling, reusing and reducing packaging waste are the new normal and will not change in any other direction than, even more.
What we now see is an EU Commission pressing all buttons to quickly change the present situation and reach the rather ambitious goals. Goals that yesterday was increased to a 55% reduction of GHG by 2030. That is compared to the previous goal of 50%.
You could argue that 50-55% are within the margin of error but this demands a huge effort of the entire society of which the packaging industry is a part.
It is also this ambition that in the end, by 2050, to become a completely climate neutral continent that is the reason for the storm of initiatives initiated that involves the packaging industry. And their customers, the brand owners and fillers.
“The European Green Deal” is a major flag ship project launched last year. It contains a very ambitious set of policy initiatives regarding clean energy, toxic free environment and much more. In this bundle are two components that will have a significant impact on packaging.
Part of this initiative is “The Farm to Fork Strategy” which is much about food and beverages but contains parts that will affect packaging. You could summarise the goal to be “Sustainable food in sustainable packaging”.
The “Circular Economy Action Plan” is also a part of this huge initiative. A part where packaging is specifically named as a focus area. Key words are sustainability, reduced packaging and circularity.
These are new and you can say that about “The Single Use Plastic Directive” as well. This directive has from the introduction last year been hurried through the system and will be a reality next year. This with huge consequences for all involved when the use of plastic is limited and phased out with rules and fees.
Those were the new ones, then we have a few very well-established building blocks that are considered to need an update.
“The Packaging and Packaging Waste Directive” was introduced quite some time ago and has been updated every 10 years. Now it is time again, after only 5 years… This is an important part of the free movement of goods within the union and is much about promoting reuse and recovery.
Finally, it is time for a refreshing of “The Waste Framework Directive” which has been with us for a long time but is now due for an update. This is basically about the Extended Producer Responsibility and the Packaging Fees to finance the collection and processing of packaging waste.
This is together quite a lot and something of a perfect storm where separate forces are pulling in the same direction which promises real results. This is happening right here, right now and will have consequences within a period of 2-5 years. The result can be influenced but only now, before the train leaves the station.
It is now we have the chance to let the decision makers hear our voice in this. The Commission is welcoming input that we as an industry probably most efficiently can give them through our organisations. It is so important that we do this, a number of very important decisions are going to be made within short and it is crucial that these decisions are made on the basis of facts and science rather than on intuition and short-term gains. So, let them hear how things are, actually.
The real effects on the packaging industry from the present virus crisis is hard to comprehend. But regarding food packaging in the short to medium term we will see online grocery shopping grow, more focus on hygiene and price without losing the grip of sustainable solutions.
The long-term consequences of a pandemic like this one is hard to have a strong view on at this stage. Likely short-term results appear to be a downturn in the overall economy with double digit declines of GDP’s and increased unemployment. Some of the hardest hit industries, so far, seem to be the hotel and restaurant industry, the travel and event industries and retail.
When it comes to retailing it is not anything like a general decline, the grocery retailing is in a much better position than capital goods retailing. Right now, people obviously stay more at home for eating and socializing. Going out is rarely an option and food and beverages are bought from stores rather than restaurants. Also, pharmacies are open for business selling medicines as well as personal care products.
Where is this possibly going then?
As a result, the pandemic is speeding up trends like remote working but also online grocery shopping and possibly other retail technologies. The effects of this pandemic for the retail industry could be an increased e-commerce business as well as growing interest in cashless stores, automated replenishment and cashier free self-checkouts.
And for food packaging?
Demand for food packaging as such will be up as people will eat more at home. Now when many restaurants and food-service outlets are closed this is obvious, but as the crisis opens for new behavior patterns some will stay, also when things get a bit more normal. There might also be some stockpiling and a new normal can very well be to have more than a few days of preserved food in the larder. This also goes for personal care and healthcare products.
Grocery e-commerce has so far been developing at very different paces in Europe. The UK is still in the lead according to Forbes (2018) followed by Czech Rep. and Estonia. As a result of the virus pandemic the habit of ordering online and receiving, or picking up, your shopping is fast developing and will get a boost from the extreme situation we are now experiencing. This is a clear step in consumer acceptance and adoption of the channel. New and better packaging solutions are being developed and innovative delivery methods are created.
I don’t think that sustainability will go away because of the shifted focus. The consumer demand is too strong, and the concept of sustainable packaging solutions has gotten ingrained in product and company positioning. Demand might temporary go down but if so, it will rapidly bounce back. It could however mean a changed view on initiatives such as the reusable cups introduced at certain coffee chains. People are also probably less interested in the packaging-free shops where you fill loose product in a bag of your own.
Sustainability is also related to the expected increase in general demand for hygiene. Packaging might even become appreciated by the consumers. It is visibly protecting and guaranteeing the freshness of the product. This could also be supporting the introduction of track and trace systems to a broader use. Blockchain technology is available, among other solutions, and is implemented as a useful tool in the distribution chain. This crisis could be a catalyst for increased use of technology for tracking and to guarantee the product origin and what it has experienced before consumption. An increased cost is hard to get around and can, in particular now, be a disadvantage.
It will take a while for the world to get back on track and increased unemployment and uncertain employments will make the average consumer more price sensitive than usual. The result comes as a shift towards a consumer demand for more value-products and private labels will have a field day. Converters and others in the packaging industry will not be spared the requirements for lower prices.
The future is right now not bright, but it is not a dark abyss either. We will have to adopt and be as agile as we can to survive and succeed also in the new tomorrow.
Making biocomposite materials entirely from renewable sources is great. Using waste material in the process is fantastic.
Last week Finnish UPM introduced a new fibre based biocomposite material, all made from forestry and renewable resources and even including using waste from existing pulp production. The material is called EcoAce and meets the desired sustainability requirements and can be widely used, including uses in food contact, personal care and consumer goods, made by injection moulding or extrusion. This is great and will save tonnes of GHG and I really like concept of finding practical use of stuff that would otherwise be waste! Splendid!
StoraEnso is at present busy with a trial of lids made from DuraSense, another biocomposite, together with Finnish dairy Valio. The lids are reusable and will be used on dairy product cups to test the wood-based biocomposite in food packaging. Valio sees it as a step not only towards a more sustainable packaging solution but also to less food-waste. With re-sealable packaging the content is protected, and an opened product lasts longer. Brilliant!
Power from the forest! Swedish Ligna Energy came up with another use for wood from the forest. They have developed a fibre based battery for storing of energy made from forestry waste material. Ligna Energy plan to convert ordinary paper machines to manufacture batteries based on organic electronic polymers and biopolymers from the forest. It wood be nice if this could make a difference for storing energy!
Some podcasts are for fun and other are for news and updates. And then there are “industry pods” aimed for people with very particular interests looking for inspiration and information. Like for instance, packaging pods.
I try to squeeze in a podcast whenever I have a minute to spare. There is plenty to choose from and I am sure that we all can find pods that cover our very special interest. This includes the packaging industry which is covered in the quite impressive and completely overwhelming flow of pods.
And here I mean pods, not webinars, that are reasonably regularly occurring broadcasts and here are a few to bookmark to the pod platform of your choice.
Below I have listed a few English speaking pods that are focused on the packaging industry and current packaging issues.
Packaging Strategies, the American trade magazine, is running a pod under the name Packaging Perspectives. They are interviewing industry experts and are covering industry news to keep us “up-to-date, informed, and entertained.” Not very frequent but in total 6 episodes during 2019.
Flexible Packaging is a related magazine who are offering the Flexible Packaging Podcast. The same concept as above but a bit less frequent, 3 shows during last year. And with a focus on flexible packaging.
People of Packaging Podcast is also an American podcast where people in the packaging industry are discussing current issues with Adam Peek and Ted Taitt and is a part of the Business and Bourbon network.
Shelf Impactors is about branding and packaging design. Blue Nectar Design, a British design agency is behind the show. It might have a slightly sporadic schedule but there are interesting things to dig out from archives.
FoodBev Media are behind the FoodBev podcast. Focus is more on news updates rather than interviews and is a weekly podcast, at least until November last year. It has been quiet since, but we hope for a soon return.
Packaging Europe, the magazine, is distributing a podcast every now and then. 7 shows were recorded last year and already two are available for this year. Various topics and interviews.
Turn up the volume and enjoy. Or why not make a pod of your own!
Now there is a report entirely about this, the Swedish packaging industry. Until now there hasn’t been an updated compilation of the current status available. The packaging industry is often, when it comes to statistics, consolidated with other industries and therefore “invisible”.
The report explains the packaging industry and how it has developed during the recent 5 years from a revenue, profitability and employment perspective. There is also a description of some of the forces and trends that will shape the industry, both on short and long term.
Food waste is a major challenge involving the entire value chain. The main culprit is however and without doubt found at consumer level.
This is a complex problem but part of the solution lies in using better and more suitable packaging.
We simply can’t afford the current level of food wasted. Exactly how much is wasted is impossible to say, but a global estimate is more than 1 billion tons of food that is somehow lost or wasted on a yearly basis. That is about one staggering third of the global food production! Better adapted packaging is part of the solution.
The problem This loss and wastage occur on all steps in the food supply chain but if we stay in the developed world a whole lot of food is wasted in the end of the road from the famous farm to the fork. The main culprit seems to be found at the final consumption stage, in our homes. But also, the other steps along the chain are involved in this.
A very recent report from Swedish Naturvårdsverket is mapping out the current Food Waste situation in the country. And it is not pretty. In 2018 about 1.3 million tons of food waste was generated in Sweden. This is an average of 133 kilos of food waste per person. As the graph clearly illustrates the main problem lies in the hands of the end-consumers in the households.
The problem isn’t easily pin pointed and solved as it involves all engaged in the consumption, production and distribution chain. But packaging is part of the problem and therefore also part of the solution.
The packaging link This is a waste we can’t afford when we are going from 7 billion people to become 10 billion of us, not in Sweden but on the planet, in 2050. If we instead of increasing food production and cultivate vast new areas could save a third of what we today produce, we would in theory solve the problem to feed the growing world population.
The massive waste of food in the households has many reasons. Too little shopping planning and lack of pantry and fridge management to start with and perhaps food is too cheap and available. But as much as 20-25% of consumer food waste could be related to packaging.
The packaging is a part of the problem when ineffective packaging is used.
This could be about size, too big or a multi-pack, simply too much product and more than you can or want to consume.
It could be the lack of possibilities to re-seal the opened packaging and the content gets exposed and destroyed.
It could be packaging that can’t be shut tight enough and oxygen, light or something spoils the product.
Not clear enough instructions about storage, with the result that a product is kept too warm too cold, is part of the story.
Packaging that is hard to empty or confusion around the date labelling of a product.
Or it could be too ambitious light weighting that can lead to packaging that simply isn’t good enough to withstand a bumpy ride to the destination. To mention a few. Much of the above comes to structural design of packaging but a lot of food is wasted because of the confusion about “best before” and” use by” date labels. One day we will have dynamic best before dates with built in sensors showing the actual best before date rather than a fixed one. But we are not quite there yet.
The solution Apart from consumers improving their fridge management and doing more organized shopping the packaging industry can offer better packaging solutions. And food producers can use it…!
So, what is more effective packaging then? What I mean is packaging that is
Re-sealable. That is a screw cap, a zip-lock or something that enables the consumer to save product for later.
Easy emptying. Think of how to make it easier to empty the pack. It can be instructions on how to or a packaging feature like a collapsible container.
Modified or Controlled Atmosphere (MAP/CAP) these are technologies used to keep fresh food fresh for longer and adds real value by extending shelf-life.
Barrier materials. Use packaging with good enough barriers to oxygen, light or whatever is breaking down the content. The result is again extended shelf-life and less food waste.
Portion packages. This is a low hanging but effective fruit. By using smaller portion packs, the small household gets a better control of usage.
Smart packaging solutions of various kinds are helpful. Smart labels indicating time or temperature, ripeness for fruit, freshness for meat, fish, etc.
Technology is developing enabling new and better packaging solutions. Sensors are coming down in price and new creative concepts are brought forward by entrepreneurs. But it hasn’t all have to be hi-tech, a cucumber has a “best before” life of 3 days and by wrapping it in plastic it increases by almost 5 times, to 14 days. Portion packs may require more packaging material but will probably save food from being wasted.
And the greenhouse gas emissions or GHGE related to food packaging is typically small, typically around 5%, relative to the emissions associated with producing and processing the food itself.
The craft brewing scene is booming also in Sweden with a big number of small brewers and glass bottles are the dominating pack type. Glass bottles represents tradition and premium, two of the impressions that you as a craft brewer work really hard to convey to your consumers.
When you are selling a product at a price three times above your industrial brewing competitors, you have to work hard on your image. But something is happening…
What is it with craft beer and cans? I have noticed an increased interest in beverage cans from the local craft brewers, or microbeweries, here in Sweden. One after the other launch new products in beer cans, not in glass bottles. Glass bottles used to be the standard for this premium beer segment.
The craft brewing scene is booming also in Sweden with a big number of small brewers and glass bottles are the dominating pack type. Glass bottles represents tradition and premium, two of the impressions that you as a craft brewer work really hard to convey to your consumers. When you are selling a product at a price three times above your industrial brewing competitors, you have to work hard on your image. But something is happening…
The power of glass The beverage can is in many consumer’s eyes a packaging used for mass production that does not necessary contain very sophisticated brews. The craft brewers have mostly been true to glass bottles for their precious drops, and that for a few sound reasons.
A craft brewer with self-respect have a large number of creative varieties of beer available and need flexibility in production. To use only one container and vary the label is efficient in a low volume production of several product varieties.
It is also cost effective as you can get away with rather basic equipment when filling bottles on a small scale. And it is often also simply impossible for a small brewer to purchase the amounts of decorated cans needed to reach the lowest order level.
Last but not least, the positioning of the product. Glass stands for quality, premium and tradition. These are images you very much want to reflect on your craft brew.
Incredible growth Most of the above is still valid but the trend is clearly towards using more cans for the most premium products and for very small product batches. The numbers speak for themselves, in 2019 the volume craft beer in cans increased by 2.5 times, for the second year in a row! An increase from 8% of the craft beer volume to 17% in three years. In 2017, 12 brewers made 35 beer products available in cans. In 2019 70 brewers offered more than 400 products in cans. That’s an improvement!
Why is this? The trend is clear and seems unstoppable. The movement is founded on a few obvious facts and some a bit more hazy.
* Some of the craft brewers have simply expanded their markets and volumes and are ready to invest in cans and a can filling line. * Others have managed to get one single and specific product on a national distribution and can take the leap with that one product. * Some who not yet have those volumes use blank cans and attach a unique label to maintain the flexibility.
Then it helps that the suppliers of cans have spotted the opportunity in craft beer and are lowering the bar for the smallest order. Finally, but not least, consumers appreciate the product.
Environment and quality All brewers I have heard comment on this argue the environmental benefits and the improved quality of the product. A sealed can is an airtight space and it is completely dark inside which maintains the quality. A can is easily recycled in this country with an efficient deposit scheme in place. As a matter of fact, 85% of the distributed cans are returned and recycled.
Marketing by packaging They just do it! And they do it within the very narrow space that is left due to the current and very strict regulations around all alcohol promotion. They build their brand using the means that are available, except from the product itself what is left is basically, the website, the shop and the bar. At the point of sales there is nothing else you can use than the packaging itself. This is a clean case of marketing by packaging. The pack type, size, design and decoration are key to positioning and sales of a beer product in this market.
They utilize the packaging very well with brilliant graphic design, creative fonts and inspirational product names. And of course, a great product with a high and stable quality is very helpful when you want to convince consumers.
An inspiring industry This is a small scale industry with very limited resources that is constrained by square and rigid laws. They have still managed to turn the opinion and make something considered as a very basic packaging into a premium container. And successfully claiming a price three times the “normal”. This is quite an achievement and well worth to celebrate. Why not with an unfiltered, hoppy and hazy beer? From a can, plenty to choose from…
Yes, what do we want instead? We can’t always replace plastic with a renewable material. Then what about recycled plastic, more sustainable plastic that is efficiently recovered and that comes from an organised collection system? Does that sound a bit better?
Coca-Cola is in the news with their new line of bottles entirely made from recycled PET. Fantastic! Coca-Cola Sweden is during 2020 switching to only use PET bottles with 100% recycled material for their leading brands, Coca-Cola, Fanta, Sprite and Bonaqua, 40 SKUs.
This is not a small thing as using recycled material in food contact is a complex mission surrounded by of rules and regulations. The Swedish deposit system really helps here as it makes the recycling stream of PET bottles relatively pure. Beverage bottles, and cans, are here collected and recycled separately and can in theory be turned back into new cans and bottles. Today around 85% of the distributed bottles are returned and recycled. Normally recycled PET tends to be cloudy due to unintended mixes and potentially tainted by other random plastic in the recycle process. This is avoided in a controlled stream like this.
In a recent report from McKinsey, “The drive toward sustainability in packaging—beyond the quick wins”, this is discussed, among other things. The report concludes that to successfully address the recyclability and waste challenges more collaboration is needed along the value chain. To manage increased recycling new infrastructure needs to be built and more closed system must be employed.
A closed and dedicated deposit system clearly makes recycling more efficient as it is separate and, closed. The Swedish deposit system is managed by Returpack, an organisation owned jointly by retailers and fillers together. When the deposit system was created also packaging converters were involved which makes it a good example of an efficient recycling structure.
Another brand owner who is blazing new trails in this field is Nestlé. The company is seriously investing in the development of new packaging concepts in their effort to have 100% of its packaging recyclable or reusable by 2025. The newly inaugurated Nestlé Institute of Packaging Sciences is unique and aims to support the process. The Institute is going to do its bit of development of functional and environmentally friendly packaging solutions and to address plastic packaging waste.
Nestlé is now investing a staggering €2 billion to explore the possibilities to widen the market for food-grade recycled plastics. The Institute will be involved but the main investment will be in driving the market for food-grade recycled plastics by boosting demand and by being ready to pay a premium. They are now demanding 2 million tons over a period of time and are willing to pay for it, to create a market. Brilliant!
Plastic is at present needed, especially in the food industry to minimise food waste, and it is possible to create a circular economy also for plastics. To get there a system for collecting and recycling plastic must be in place. But there needs to be a corresponding demand as well. Today it is more expensive to use recycled materials than virgin. But with a higher demand and larger volumes the price should go down and thereby generate more demand. Hopefully a process that creates a virtuous cycle spinning us towards a circular and healthy economy.
These are great examples of steps in the right direction to increase demand for recycled plastic materials. This will also drive the development of efficient systems for processing. But, in the end, the consumers are going to do a big part of the job. We must not forget to inform and motivate to sort and return the empty packaging through this efficient system.
E-commerce will continue to grow, and that at the expense of traditional retailing. Online shopping will soon be the norm for shopping. The supply chain needs to adjust to this.
One man’s convenience is another man’s stress One of the consequences of us shopping from home, or on-the-go using the phone, is a stressed logistics system. The result is visible, congested traffic and overloaded bottle necks. The logistic system supporting online shopping can be divided in two steps. The first leg is from producer to a Customer Fulfillment Centre or CFC. The second is from the CFC to consumer. This is a very different supply chain from the traditional and we have all noticed the growing number of lorries on the roads. New innovative delivery methods are invented and tried out. Robots, drones and electrical vehicles of all kinds, self-driving and not. These solutions are mainly focused on the last mile delivery, that is from the customer fulfilment centre (CFC) to the consumer. This “last mile” transport can be organised in various ways, it can be home deliveries or to a pack-station at offices, supermarkets or in train stations.
Remarkable last mile solutions
Drones Amazon introduced the concept of drone deliveries in 2016 and shared a few months ago a project update. They are still developing the concept and now showed us an increasingly sophisticated flying vehicle capable to deliver up to 90% of the packages they are delivering today. And safely too. Wings has a similar solution but with a different spin. They offer the same service, drone deliveries, but instead they link consumers to a range of local stores. An order is placed, and the drone picks up goods from the specified shop and delivers, all the way home. On trial in Australia, Finland and in the US.
Robots Some drones are instead found moving around on the ground. In the UK, Tesco has started to deliver groceries using robots. A pilot test is located to Milton Keynes where Tesco is working with Estonian based robotics company Starship Technologies. A low 6-wheeled cart carries parcels, meals and groceries delivering to homes within a 3 km radius. In the US Kiwibot is doing very much the same, home deliveries using robots, but in this case the 4-wheeled carts are bringing food from local restaurants. Also this is a concept in the building but it is inspiring to see all the creativity coming out to meet the demand for fast home deliveries.
The first leg of the supply chain The above are solutions for shorter distances, the second leg of the supply chain. To get the goods from the producer to the CFCs lorries, train and boats are used, creating traffic overflow. That is until now. Until we heard of Magway.
British Magway has come up with the idea of building a network of pipes around the country. This planned grid of tubes, with a diameter of 90 cm, is supposed to carry goods, beneath and above ground. Instead of using trucks on the road, cargo will be sent around in pods in these tubes fitted with rails and powered by magnetism. An electric current will run through a track in the pipe, creating a magnetic wave that will drive the packed pods at speeds of 80 km/h.
Magway is an example of sustainable new thinking for a new era where consumers want their goods and that immediately. The normal distribution chain with goods-in-cases-and-on-pallets will with increasing online shopping soon not be the norm anymore. Online shopping means that products are sent on their own or together with random other products. New methods are needed, and Magway has come up with a radical e-commerce delivery system that will reduce traffic on the roads and ease traffic congestion. The system promises reliable and predictable deliveries to CFCs and to a lower cost.
The first route planned is an 80 km route from northwest London to Milton Keynes, where large numbers of distribution centres are located. Already this year a 2 km test track will be built and tested.
This is an interesting period in time when online shopping is growing very fast and shoppers are expecting immediate deliveries. New solutions are really needed to gear up the supply chain for the new needs with lots of room for new thinking and developing of new concepts. All the above mentioned enterprises are going to be exciting to follow and I will absolutely keep an eye on all of them.
Coca-Cola is in the news with their new line of bottles entirely made from recycled PET. Fantastic! Coca-Cola Sweden is during 2020 switching to only use PET bottles with 
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