How nimble packaging companies can flourish in a quickly shifting market
By Rich Radford
The packaging business is rapidly changing. Open source software can help packaging companies use flexibility technology to capitalize on market opportunities.
Earlier generations sought convenience and ease of use in packaging. Today’s consumers are increasingly aware of waste and emissions in plastic package manufacturing.
2020 is the year Starbucks plans to complete the elimination of single-use plastic straws from its more than 28,000 owned or licensed stores.
By making a strawless lid or alternative-material straw options available, Starbucks projects the initiative will eliminate more than one billion plastic straws per year.
Plastic is more omnipresent than most of us are aware. Cars and planes manufactured now are approximately 50% plastic by volume. 340 million metric tons of plastic are produced annually and Modern Materials Handling reports that 91% of plastic ever created has not been recycled. The United Nations launched a “war” to eliminate micro-plastics in cosmetics and single use plastics.
For decades, the growth in plastic usage meant growth for companies making plastic packaging. The Ellen Macarthur Foundation reports that the share of plastics in packaging grew from 17% in 2000 to 25% in 2015.
How are brands responding to the plastic backlash and how is this impacting packaging companies?
After five years of development, in November 2019 Colgate-Palmolive Co. completed development of a recyclable toothpaste tube. Colgate-Palmolive is willing to share the new packaging development with competitors. The company currently uses approximately 20 billion tubes annually, all of which are incinerated or end up in landfills. Their Tom’s of Maine brand will completely transition to the new tubes in 2020.
Tom Heaslip, worldwide director of global packaging at Colgate said, “Our goals here aren’t to have a tube that’s different than the industry and supposedly better than other people’s tubes. Our goal was to establish a new standard that everybody can be a part of. It won’t be recycled if everybody is not a part of it. We want and encourage all of our competitors to join the journey.”
Unilever - the owner of Ben & Jerry’s, Vaseline and Dove soap - announced in October 2019 its plans to reduce use of plastic packaging by 100,000 metric tons a year by 2025. Unilever will use refillable packaging, smaller containers and plastic that is reusable, recyclable or compostable.
Nestle recently opened a lab to research the development of what Nestle calls functional, safe and environmentally friendly packaging.
In April 2019, a zero-waste platform called Loop was launched in Paris and New York by a consortium of major consumer product makers including Procter & Gamble, Nestle and Pepsico. The products are packed in durable packages for delivery and consumption then returned back to the manufacturers for cleaning and refilling. Because consumers pay a fee to use Loop packaging and Loop’s launch was delayed in London due to brand logistics challenges, Loop may not be able to scale universally.
Can manufacturers turn the plastic backlash into opportunities for improving competitive advantage? Häagen-Dazs is working on it. Häagen-Dazs collaborated with Loop creator TerraCycle to make a refillable stainless steel ice cream tub. It offers buyers a better consumption experience because it keeps the ice cream cold longer.
Tipa is a company in Israel that believes packaging should work like an orange peel. Oranges are packed by nature in a protective multilayer peel. When discarded, the peel decomposes and leaves no toxic residue. With the peel in mind, Tipa developed a compostable flexible plastic film made of bio-materials that can package everything from pasta to granola bars.
The plastic backlash and the rise of eCommerce is fueling growth in corrugated packaging production. Corrugated offers proven durability as packages are handled up to 20 times or more in eCommerce logistics chains from distribution center to home delivery.
96% of all corrugated boxes produced in the US in 2018 were successfully recovered for recycling. The average corrugated box in 2018 was made from 50% recycled content.
Fit-to-product (FtP), also called box-on-demand, systems are increasingly used at large eCommerce marketers like Amazon. The systems support production of packaging for the exact size of product being shipped.
America’s 2nd largest packaging company, the $15 billion annual revenue WestRock, bought Plymouth Packaging to capitalize on this. 70% of Plymouth’s sales are from box-on-demand systems and corrugated fanfold.
Among fanfold’s advantages are that no waste is created in the feed direction of the material and any activity focused on the feeding side of the equipment is minimized. With the ability to custom print brand messages on fanfold, the packaging becomes a mobile billboard.
For answers to how open source technology can help improve your business processes, call us at 855-877-2377 or email us at firstname.lastname@example.org.
See how our experience across the accounting discipline helps rightsize the recommendations and solutions for your company.