When it comes to sustainability in beverage packaging, consumer sentiment has changed dramatically. The ground beneath beverage packaging producers is shifting, and many are shifting along with it, making investments into recycling facilities, and innovating new ways of packaging drinks.
Many producers have taken hard looks at the full value chain and are now taking decisive action to make their businesses and products more sustainable.
The beverage packaging industry is in the midst of a sea change, where consumers are demanding recyclable, recycled, and convenient beverage packaging. And this has set up a challenge that packaging producers are rising to.
It started with bags
This change in consumer sentiment gathered pace after all Australian states and major territories (except New South Wales) banned single-use plastic bags for shopping. Coca-Cola Amatil (CCA) Australian beverages managing director Peter West tells PKN that when supermarkets stopped giving out free plastics bags, it made for a dramatic change in the psyche of Australians.
“It is, by far, the most dramatic change we’ve seen in consumer sentiment,” he says. “So,
CCA last year switched to using 100 per cent recycled plastics in its single-serve plastic bottles, meaning seven out of 10 bottles are made of recycled material. West says that switch was part of a strategy to move incrementally to more sustainable packaging.
“Rather than trying to be perfect and get the whole portfolio, we executed what we knew, which was below one-litre, which is seven out of ten of our packs,” he says. “The reason we’re not using 100 per cent recycled material in our larger bottles, is because of the sheer amount of pressure that is in the bottle – it’s equivalent to three times the pressure of your average car tyre.
“This a good first step, but one of the key things that consumers would ask now is, how do we find a way to change that to a closed-loop solution within the Australian market. We import the rPET today – that is 16,000 tonnes of material that was a bottle before that we make into a bottle again, but we need to turn that into a solution in Australia.”
Mal Karmelich, key account director at Tetra Pak, agrees that consumers started looking at packaging differently as a result of the plastic bag ban.
“Our 2019 Tetra Pak index tells us consumers believe we’re reaching a tipping point. They see themselves as being directly responsible for the world around them. Consumers are looking to make more informed choices around packaging – they’re looking for packaging made from renewable and recyclable materials every time they walk down those supermarket aisles.”
But, Karmelich points out, there are two contradictory trends in the market. “On one hand, consumers are demanding convenience and premiumisation, and we know that they’re willing to pay for things that make their lives easier. But these products usually come with more processing and packaging, which is the opposite of the other trend: people are saying they don’t want processed food in more packaging, they want things that are as close to natural as possible. It’s a paradox, and it’s a real challenge for manufacturers.”
Geoff Parker, chief executive officer, Australian Beverages Council, tells PKN sustainability has risen as a priority in consumer sentiment research recently, and beverage companies have responded with ambitious ways to address concerns and to turn sustainability – which includes greater use of recycled material – into not just a unique selling point, but part of a company’s DNA.
“Today, much of the industry is manufacturing containers from recycled material, some of which is being supplied through container deposit schemes. In many instances, the recycled content of the average plastic bottle is edging above 50 per cent which is great news and a step in the right direction to support governments in their respective broader waste management policies,” Parker says.
“While these initiatives demonstrate positive progress, clearly, there is more work to be done to increase the recycled content of all containers across the industry. The industry must continue to support this recycled content agenda and aim for 100 per cent in the years ahead, helped largely by a better functioning recyclable waste framework which is currently being developed.”
Away from plastic
While plastic recycling is a front-of-mind issue for many consumers and businesses, beverage packaging is also moving in other directions, away from plastic.
Parker says, “It’s likely we’ll see some niche, and not so niche, packaging made from bio-degradable materials. As manufacturers get to grips with the challenge of creating a more sustainable future, a portfolio packaging mix that involves many material types will almost certainly be part of the solution.”
There has also been an uptick in aluminium can production. Orora Packaging, in its most recent half-year results, reported growth in can volumes, which contributed to an EBIT growth of 1.8 per cent in Australasia, despite what the company calls “cost headwinds”.
Brian Lowe, Orora’s CEO, says, “From a growth perspective, we’re seeing that some products transition from other packed formats into cans – whether that be from plastic or even glass. We’re also seeing growth [in demand for cans] within segments, such as craft beer.”
Lowe also notes that there has been growth in different sizes of cans, such as slimline cans. “We’re also seeing a lot of variety in the products, such as sparkling water in cans,” he says. “The growth in the small format cans has continued.”
Lowe says, in the Australasian operations, glass volumes were flat over the first half of the past financial year. “Glass volumes were in line with the first half of last financial year, mainly we saw some impact from wine exports. These impacts were partially offset by gains in beer and increases in other beverages such as kombucha,” he says. “Over the coming period, I expect our current glass volume to be pretty steady.”
In a statement to PKN, Orora says glass and cans both offer an infinitely recyclable option to producers, customers and consumers.
“Increasingly, cans are also viewed as a package that offers purity of flavour, quality of product, and are environmentally sustainable. They also provide new and innovative ways to differentiate products on the shelf, with brand and marketing teams able to maximise advertising space across the surface of the can.”
It is not just in traditional beverage markets the market is moving towards cans, for Orora, at least.
“In addition to the growth of carbonated soft drink and water in cans, our global customers are also exploring options for canned wine, caffeinated, and functional health drinks,” Orora says.
The importance of sustainability is a rising tide everywhere, not the least in the beverage packaging industry. Many manufactures and bottlers have made commitments and substantial moves towards more sustainable operations. There are more sustainable materials, and there is a growing emphasis on recycling and reusability. These moves have been generally in response to rising consumer concern, and the result will be a better, cleaner environment for everyone.
This article first appeared in the PKN – Packaging News March/April 2020 print edition.
