A unique and updated report about the Swedish packaging industry is now available.
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.
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.
From volatile crypto currency to a solid system adding value for the supply chain. Blockchain technology can be the key to value chain transparency and a solution to the ever-growing problem with counterfeits.
What is it?
A Blockchain is a database of records, here called blocks. What makes the database special is that these records are interlinked, or chained, using a hidden code. This is useful in a supply chain involving transport and transactions that can be recorded as blocks. Each block contains a cryptographic link to the previous block plus information on when a transaction occurred, who was involved and much more.
This may sound slightly abstract, but it makes the Blockchain concept decentralised and transparent. A key element is that the process is spread out across multiple computers with the consequence that no one has ownership of the information on the “ledger”. A non-corruptible database!
Using a Blockchain you bypass the concept of a centralised organisation by giving everyone involved a complete and unalterable copy of the register of all transactions.
Blockchain technology relates to packaging as it can be used to:
Provide consumers information regarding a product’s authenticity and origin. The identity of a product can be verified as the packaging is read and recorded to the “ledger” when handled along the transport, all the way to the destination. As the records can’t be altered retroactively, it means that all information on the ledger is by default authenticated, but without the paperwork of today.
Track and trace products along the value chain. When the value chain (packaging converters, printers, raw material producers, fillers, brand owners, retailers, etc.) join up in a Blockchain and makes the process transparent they will all share the same picture of origin and handling of products. If a batch is contaminated it can then easily be traced. Traceability is a key aspect and an opportunity, in particular for the food and pharma industries.
Ensure brand protection and serve as anti-counterfeit technology. Consumers will be able to tell a fake product simply pointing their phone at the packaging and read the QR code. Blockchain will prove to be a useful tool for building brand trust as a neutral and immutable system.
The demand for transparency and traceability is increasing, driven by counterfeits troubling the pharma industry and recent food scandals that shook the industry. Using Blockchain technology the consumer with a smartphone can simply scan a QR code on the packaging to follow the product journey, from farm to plate.
Who are using it already today?
It might not be mainstream, yet, but the technology is already in use for mundane items such as milk and coffee. In the lead we find major food suppliers like Arla who are running a pilot project in Finland using Blockchain to provide transparency for milk products. Nestlé recently started up their pilot but in a larger, or even global scale involving milk and oil. Barilla is using the technology in Italy to certify fresh basil.
Also the retailers are also into this. Carrefour is leading in Europe using the technology on a number of categories like poultry, eggs, cheese, milk, oranges, etc. On the other side of the pond Walmart is demanding Blockchain traceability for selected vegetables.
Where is this going?
This is only the beginning. Driven by the main advantages’ security, decentralisation and transparency Blockchain as a tool will gain momentum and develop fast.
The technology might seem complicated to use, but the tools are available and new entrepreneurs are coming in with easy to use solutions. With a straightforward access we can expect to see a rapid adoption rate, with a variety of applications. The packaging industry needs to be ready to handle their part of the chain of blocks. Printing and packaging are keys for success.
Towards the end of any year we have an avalanche of Packaging Trends and annual summaries coming in through the mailbox. Then at the end of a decade the number of summaries is doubled as we get both the Greatest Hits from 2019 and Top of the Pops from the last 10 years.
Please misunderstand me correctly, I like lists like everybody else, it’s just that the structure doesn’t necessary bring more clarity. The industry is wide and diverse and it’s hard to find the distinct trends, without obvious and significant contradictions.
First of all it’s not easy to define trends that are so general that they cover the industry, but yet specific enough to be interesting. The packaging industry is a complex one with many examples of conflicting developments and where few lines point in one and the same direction. Some are for example moving from plastics for sustainability reasons, at the same time others are moving into plastics to minimise greenhouse gasses. All depending on perspective.
The below are examples of real trends that are happening right now and are both general and specific enough but even so containing contradictions.
Plastics We can conclude that the main trend is towards using less plastics. There is clearly an increased demand for no-plastic, less-plastic, some-plastic and bio-plastic solutions. The reasons vary and are unfortunately not always fact based. The trend has got quite some media coverage and the SUP directive was recently voted through in the European Parliament to be implemented already in 2021. This is leading to intense activity to find viable alternatives to single use plastic items.
At the same time Amazon makes a shift from fibre-based shippers to plastic bags. A decision that could inspire and set a trend for the rest of the industry. Amazon refers to environmental benefits to back the decision, reduced consumption of energy and natural resources during production, reduced CO2 emissions, and fewer vehicles required during transportation.
Less Packaging The general trend is in one way towards using thinner material and less material, to save both the environment and cost. Some consumers are loudly demanding less packaging, but consumers are also increasingly shopping online.
E-commerce is fast growing on a global scale and is bringing on change for all involved in FMCG trading. One of these changes is that products are often distributed as single units or in combination with random other products. As opposed to traditional retailing when products are safely sent around in a tray or case sitting on a pallet. The result is that products in general needs more and protective packaging to arrive safely to destination.
Recyclable Or reusable or refillable or returnable, or even compostable…? We are certain that we want more recyclable packaging to be used. But first of all, we need the infrastructure to collect, handle and recycle the used packaging. Then it is really up to the individual consumer to use the system.
An alternative to throw away packaging waste is to return and refill the emptied packaging. Just like in the old days and Loop is a new concept on this path. Here a few of the leading global food and beverage manufacturers are joining forces with global recycling organization TerraCycle to create a circular shopping platform.
Consumers order products that get delivered in a shipping tote instead of a box. Goods arrive in durable, reusable or fully recyclable packaging made from materials such as alloys, glass, and engineered plastics. Once the products are used, customers place empties back into the tote, schedule a free pick-up, and the system makes sure the products get automatically replenished. Brilliant.
Packaging is a traditional industry, that needs fresh ideas. In contradicting times, in particular, you need a steady stream of fresh ideas. Standing still is probably the worst option.
So, I wish you all a very happy and fast moving 2020.
The SABMIller/AB-InBev deal seems to go through. This is great but will obviously trigger a few consequences and produce both relative winners and losers. The packaging industry doesn’t necessary have to be one of the latter but it will definitely make things a bit more challenging.
Now this consolidation of the industry is in combination with a micro/craft brewery trend that grows seemingly all over the world creates a market place with two extremes.
The polarisation of the field will give the packaging industry a headache. On the one side we have a few really large customers with an impressive leverage and with logistical and geographical demands never seen before. On the other side we have the really small but rapidly rising producers with limited reach that each demands very few but special bottles/cans/kegs at the time.
These opposing customer demands will have to be addressed and solutions must and will be found. The craft breweries are growing and they have aggregated formed into a significant and fast growing market for kegs and bottles and an even faster growing number of cans. It would be a mistake to not support them with suitable packaging solutions that meets their needs. Even if all the action seems to be in the other end of the field right now…
Why trust your senses when it’s more fun with technology? We use for instance thermochromic ink to tell us if our beverages are cold yet. It is fun and a great way to interact with consumers. Measuring is exciting and there is a small control freak inside of us all.
Now this thingy is really cool. You put this stick into your beverage and hey presto you get a reading of your drink status. Israel based Valiber has developed a hi-tech “spoon” that can measure not only the temperature but also the sweetness of a beverage. This is great but why stop here?
Their spoons will actually soon be able to provide a measurement for other taste sensations such as how sour, how salty, and how bitter your drinks are.
This is fascinating from more than one perspective. I like the idea of new technology supporting every day life and even improving the way we enjoy consumption.
It also fits so well with our obsession to measure and calculate our other activities such as walking, running, sleeping and more. We could probably live without a fitness band, but why take the risk.
The measuring spoon comes handy when you want to know more about your thirst quencher. But you can on the other hand just as well trust your senses and read the label on the packaging…
Material is central for packaging. Packaging research is a good deal about materials where new sources are constantly explored. Renewable sources like corn, wheat, pine trees, shrimp shells and many more are explored for polymeric qualities. This is an exciting field of research with a promising outlook and an industry looking for renewable alternatives.
Gerben Stouten at Delft Technical University has taken this one step further. He has found a microorganism that purifies water, and makes bioplastic in the process. He is using waste water from a Mars plant to feed bacteria that can be used to make bioplastic and at the same time the process purifies the water. This result could actually be used to wrap a Mars bar. Brilliant.
Counterfeiting is a growing problem, no doubt, and it’s not only about expensive bags, perfume and alcohol. This is also very much a concern for the pharmaceutical industry where dodgy imitations slip into the system. Today the situation is the same or worse for all the above categories, and it’s getting nastier…
The forging and faking is breaking new grounds and is sliding down the price curve. Nothing is sacred and there are fake soft drinks to be found, as there is fake olive oil, not to mention fake milk and wine. The other day a production site for fake alcohol was found in the UK. A plant making fake brand-name vodka was raided in Derbyshire. We are especially grateful these imitators were stopped as they were fortifying their product with anti-freeze…
Europol has during the last couple of months been busy coordinating efforts to curb counterfeiters and have as a result seized a staggering 2500 tonnes of fake food products. The damage is not only to the brand name but forged products can be harmful in other ways as well. Obvious when the product is topped up with anti-freeze or similar.
It not easy to spot the real McCoy as the crooks are rather sophisticated. Not all are though, some of the taken vodka bottles were giving it away with obvious spelling mistakes on the label. What to do then if you want to take the risk and go further than to your micro brewed beer and locally produced produce?
The problem needs a good solution and that as fast as possible. A fake can seldom be spotted just by looking at the product. There are many suggested ideas for how we can distinguish the bad apple. It seems to be hard to agree on a standard so it better to find a solution that fits your product category. If it is printed electronics, holographic prints, RFID technology, security ink, product numbering, watermarks or invisible printing. It’s not cheap but the alternative is worse.
You will have to add something to the packaging that is hard to copy to make it more difficult or even impossible to copy. Last week Diageo and Thin Film Electronics presented a “smart bottle” with a printed sensor tag. The tag can be read using a smart phone and will convey any information the producer adds to the tag. The read tag will confirm the origin and of course give other interesting information to the consumer. Brilliant.
This is all new and the tag will be properly introduced next week at the electronics conference in Barcelona. This is good news as we need many solutions to this growing problem spreading across food categories. It doesn’t mean that I will stop supporting my local micro brewer but it will make life easier and safer for the consumers of the world. More ideas to make faking brands harder, please.
I am thinking of the idea of using legislation to control consumer packaging decoration. The power of packaging design has to be restrained to make a product less attractive and hold the consumers back. I am of course referring to tobacco and the ongoing discussions about neutralising the design of the entire category. This says a lot about the power of packaging and of and how graphical design communicates. Australia was first out and this is at present also discussed in Europe.
Tread carefully when making packaging design decisions. Nestlé is in court meeting a producer of coffee capsules made to work with Nespresso machines. The argument is about the design of the capsules and the functionality of the machines. Without going into details, it’s again about the inherent power of packaging to make or break. This time a little bit of diplomacy probably would have smoothed things a bit. Playing with packaging is playing with fire.
People apparently care and react to what they think is not quite right, also when it comes to packaging. Glad Wrap has been forced to rework their new packaging design after an uproar of public backlash from unhappy customers. Their mistake was to move the cutter from the base of the box to inside the lid. Shock horror. The consumers didn’t like the change and let Glad know, they got the message and changed things back to “normal”.
Packaging matters and design is over again proving to be a powerful tool.
There are loads of textbook examples describing successful brand extensions. I would say that the Virgin enterprises of today will serve as a good example of a successful branching out from the original Virgin branded vinyl recordings. Coca-Cola famously extended the brand to include also Diet Coke in 1982 and IKEA is also the number one Swedish exporter of food products.
Artist and designer Peddy Mergui takes the concept of brand extension further than this and to a new level. In an amazing, challenging and also made up series of cleverly designed packaging solutions for famous brands. Famous brands that today are active far away from the here suggested categories.
In a design museum in San Francisco the entire line of exciting andthought provoking packaging was displayed. Peddy gives us his view of what milk from Apple would look like, or a salami from Louis Vuitton and how yogurt from Tiffany could be packed. If you ever wondered what pickles by Gucci would look like, go to the exhibition web site.
A brand is expressed through its packaging and this artist will support us thinking out of the box and straight into the container.