Think inside the paper box

Consumer demand and tighter legislation are just two factors that will boost the market share of paper-based packaging, while rising raw material costs have moved sustainability to prime position on every packaging manager’s agenda. Converting Today takes a closer look at how sustainability in carton and board is developing in leaps and bounds.

Every day, more companies decide to invest in eco-friendly packaging such as paper. Of the recycled packaging materials available, paper and board account for 34% of the market share, behind flexible and rigid plastics with 37%. The importance of packaging sustainability will continue to grow over the next two years and is expected to become more of a factor than cost, which is currently companies’ major challenge.

Paper-based packaging offers a versatile and responsible solution for manufacturers, retailers and consumers. Since paper is biodegradable and recyclable, it is often seen by the final consumer as a preferred packaging material. Improving paper’s barrier properties is seen as a critical step in increasing its viability as a packaging material. To adhere to food-safety regulations, water-based technology is gaining acceptance. Water-based coatings can be formulated to meet the requirements of a wide range of food packaging.

In a 2012 study by the Confederation of European Paper Industries (CEPI), more than 80% of European consumers preferred paper-based packaging and labels, believing paper packaging to be more convenient, and thought that manufacturers and brand-owners should embrace it with greater fervour. Almost every news article on sustainability mentions that there is a growing awareness of environmental issues among consumers, although food safety remains the main concern.

Government regulations that mandate packaging recycling rates have helped boost the paper market as companies aim to increase their resource efficiency by collecting more recycled material. While companies still invest in developing new types of sustainable packaging such as plant-based plastic or bio-plastic, the word biodegradable has become tainted amid discussions questioning its definition and its properties.

Large quantities of biodegradable packaging end up in landfill where they are deprived of oxygen, decompose and end up generating methane, the potent greenhouse gas. Landfill is the third-largest source of man-made methane emissions in the atmosphere; if packaging weren’t biodegradable, landfill would be less of a nuisance to the environment.

One way companies are dealing with stricter regulations is to decrease packaging size and weight, allowing them to save on transportation costs and reduce their carbon footprint.

The global consumer packaging market is valued at about €300 billion, of which the paper and carton industry accounts for a third.

The future promises to be bright for the paper and carton industry with a predicted growth of 5% annually until 2018. This will result in a global market of more than 30 million tons with an approximate value of €50 billion. Global demand is evenly spread across the BRICS markets, the Americas and Europe with nearly a third each. Oceania and Africa account for the small remainder, according to a Forest Stewardship Council (FSC) report. Paper packaging sales in Europe have increased only slightly, although France is an exception: it saw a decline in sales in 2013 after failing to adapt the selling price of final products to the rising costs of raw materials.

China’s middle class – made up of about 150 million people – is expected to reach 500 million within the next ten years, equalling the current total population of the EU. With Asia’s steady 7% annual economic growth and its middle-class population growing, brands are focusing on how to attract new consumers and keep them. As long as the paper packaging industry has not solved the various barrier limitations problems, plastic will continue to grow on the global market.

For developing countries, rigid plastic materials have rapidly taken a strong market share as the processing industry for those materials requires significantly less capital than glass, metal or paper. As wealth in developing markets grows, we will see a rise in recycled packaging consumption. Since food packaging makes up a large chunk of municipal solid waste, companies may look at recycled paper packaging as a way to reduce their landfill waste.

Colouring perception

Innovation in the food industry has prompted greater demands for paper packaging. Paper packaging is increasingly being used as a substitute for polystyrene. The paper packaging industry has been developing barrier-coated boards and papers, helping the industry to close the gap with the plastic packaging industry, which is also expected to grow.

While sustainability design used to be limited to brown packaging, earthy colours and textured paper – and all three are still very popular – these days, brands have dared to move away from the clichés. Companies often remain loyal to their brand-colour scheme to reap the benefits of recognisability. Demographic targeting and enduring packaging are also incredibly important, as Lotte Krekels, packaging manager at Carrefour Belgium, explains: “We have our Carrefour Kids line of products, which has its own website and product designs. We are collaborating with a local Belgian children’s book illustrator who has illustrated the well-known Danish Cookies tin in a Polish design style after the illustrators’ one-year stay in Poznan. We hope that consumers will keep the tin and use it after the cookies are gone.”

With the European recession expected to last until the end of 2017, managing cost is vital to a company’s survival. At a time when China’s double-digit growth has lost a digit, global demand for paper pulp is lagging. On top of that, South America has become an important pulp and paper-producing continent. Its capacity expansion is enabled by an increase in agricultural productivity: arable land mass is being used with short-rotation eucalyptus and shorter-rotation pine, which are unavailable in colder climates. Producers will put 30 million tons of chemical pulp into the global market up to 2020.

Despite increased demand for sustainable packaging on the consumer side and the fact that over two million tons of paper capacity has been shut down in Europe since 2012, producers’ demand has fallen. Pulp overcapacity is likely to result in lower prices, enabling companies to make the shift from plastics to the more sustainable paper packaging and, thus, stimulating the use of paper and board in the growing packaging industry.

This year is the 121st anniversary of the corrugated box: the first was produced in the US in 1895 and, up until then, all shipping was done in wooden crates. Having been left aside for a long time, cardboard is back and is being considered the material of the future. The success of corrugated packaging in the retail industry is most tangible in the discount sector: 90% of discounters’ products use shelf-ready packaging compared with 40% of non-discounters. The discounters make use of corrugated packaging’s eye-catching designs and efficiency within the shelf-replenishment process. Supermarket discounters are the fastest-growing European retail sector.

German discount pioneers Aldi and Lidl are the two front-runners across the continent, enjoying increasing market share. The Schwarz Group, which owns Lidl, and the Aldi group are forecasted at 5.0% and 3.5% growth a year respectively for the next five years, compared with mainstream retailers at less than 2.0%. At Lidl stores, an entire cross-section of food and household items is displayed in corrugated shelf-ready packaging.

Angelika Christ, secretary-general of the European Federation of Corrugated Board Manufacturers says: “Corrugated has become an integral part of the discounter retail business model because it’s great for display and reducing cost. That’s why it is, and will remain, the number-one choice for discounters.”

Despite the industry’s focus on lightening the weight of boards while maintaining their strength, there has been the introduction of new heavyweight products. The majority of lightweight boards are being used in Western Europe, while Eastern Europe has seen an increase in demand for heavyweight boards. Primarily targeted at replacing wooden packaging, some of these heavier products are also able to replace double-walled board with an overall lightweight single-wall substitute.

Pest control

The use of a suitably strong corrugated product as a substitute for wooden packs brings significant weight reduction, improving logistics and handling, and providing cushioning for sensitive and heavy products. This creates a larger printable outer surface, and circumvents the regulations concerning pest and insect damage in wooden packs.

Jori Ringman, CEPI’s sustainability director, is adamant about paper’s benefits: “Paper-based packaging has a good environmental record throughout its life cycle, starting from the fact that wood fibres are renewable and recycled to a high degree. In addition to being renewable and recyclable, it is also biodegradable and compostable.”

The latest report from the European Recovered Paper Council (ERPC) shows that, at more than 81%, paper and board is the most recycled packaging in Europe. ERPC members are looking at all steps along the value chain to improve this rate even further, paying attention to waste prevention, eco-design and R&D.

“In Europe, all paper and board has a pedigree: we source from legal, sustainably managed forests and have traceability for the materials used in packaging,” Ringman says. “Paper-based packaging is really a product made in Europe with over 80% of the raw materials coming from the EU. In Europe, paper is showing the way for other materials in traceability and recycling.

“We also are championing water recycling where water is reused several times, having made it possible to reduce water intake by half in the past two decades. In addition, 93% of water intake is now returned to the source in good quality. European paper and board has managed to de-couple economic growth from environmental impacts: we have dramatically reduced not only our carbon emissions but our overall environmental impact as well – and performance is still improving.

“Global food waste amounts to as much as 1.3 billion tons, or a third of food produced worldwide. Paper packaging can be part of a solution to alleviate this serious problem by minimising waste and food damage along the chain.”

Corrugated packaging has become an integral part of people’s daily life. A recent study by Ifop in France showed that 94% of respondents thought cardboard was suitable for packaging and protection, with 90% claiming that they regularly buy products packaged in cartons. Most people emphasised the practical aspects of boxes (87%), finding them easy to open (81%), solid (80%) and reusable (69%), and 70 -80% of consumers include the green factor of a product in their buying choices.

Some consumers are even willing to sacrifice performance for a product that has taken the environmental impact into account, and this increasing concern over the environmental impact of packaging has pushed producers and brand-owners to reduce the amount of material used in the production of packaging.