March 19, 2018
The SPC made an appearance in Amsterdam this March to attend the Packaging and Converting Executive Forum (PACE) Europe, an annual event that brings together hundreds of senior level packaging professionals to discuss innovation, technology, and challenges facing the European packaging market. While the focus of the conference was not sustainability, this topic took the center stage at PACE as well as the call to integrate product, package, and digital experience through smart packaging applications. Future European packaging promises to be both smart and sustainable.
Plastics in the Circular Economy
Europe has led the way in formalized discussions on implementing the circular economy with the introduction of its Circular Economy Package in 2015. In January of this year, the EU published its new Plastics Strategy as part of these efforts. This strategy sets plastics management objectives for the region and served as a central backdrop to many of the conversations occurring at PACE.
Notable tenants of this strategy include:
1) All plastic packaging in the EU marketplace must be either reusable or recyclable in a cost-effective manner by 2030,
2) Recycle 55% of plastics by 2030,
3) Develop strategies to integrate plastics value chains to promote market development (QC Polymers is a great example),
4) Remove recycling-hampering substances from products,
5) Develop standardized eco labeling criteria
6) Consider policy tools to better manage marine litter
To this end, the EU has made billions of euros available for research and development for plastics through its Horizon 2020 program, the European Fund for Strategic Investments and Structural Funds. Some individual countries have made their own moves, with the Netherlands recently opening the first “plastics-free” grocery store and the UK set to follow suit.
Needless to say, business has mobilized in Europe to respond to this momentum. In fact, European Plastics Manufacturers have made a commitment to have 60% of plastics recycled by 2030, above the proposed level in the EU plan. Some of their priorities include:
- Increasing the collection and recovery of flexible plastics. FLEXPAK Europe, which represents the flexible packaging industry in the region, presented a strong case for the circularity of flexible plastics at PACE, emphasizing their contribution to resource efficiency by optimally protecting products with minimum materials and preventing waste through barrier protection and portioning, as prevention is the largest tiered strategy in Europe’s resource efficiency hierarchy. However, recycling still remains an issue. The group’s project CEFLEX aims to tackle this – noting that the majority of EU flexible plastics (70-80%) are technically ready to recycle and the first critical step is to ensure all packaging is collected. Sorting and recycling solutions in the EU remain among the best in the world, but further improvements are still needed for multi-material/flexibles. These solutions can be relevant globally.
- Increasing the use of recycled content and compostable packaging: Danone acknowledged obstacles it faces meeting the EU objectives for its majority polystyrene packaging and the need to move to recyclable alternatives like PET & PP, with a strong eye towards recycled content for PET, which could be met by a nearly commercially scalable chemical recycling progress for PET in the next few years. Futurepak is also a promising project to scale up chemical recycling and recycled content in Europe. In the long term however, many brands have set their sights on compostable plastics. Brands noted the need to collaborate with recyclers and even with direct competitors to develop this infrastructure. Talk of backyard compostable packaging and even edible packaging offered some aspirational future scenarios – acknowledging the need for clear labeling to avoid confusing claims. Indeed the EU Commission plans to propose harmonised rules for defining and labelling compostable plastics and helping consumers see through false claims.
Global Data identified intelligent packaging as top trend in the European packaging market and the topic was reinforced several times over by suppliers and brands alike throughout the conference. The trend is tied closely to the rise of ecommerce and the accelerated pace of change in the digital space. Globally, we are seeing a rapid decrease in concept-to-market time for products, with the need for companies to innovate quickly, supported by a system of smart logistics that optimize supply chains, security measures to protect brand integrity, and quality consumer analytics that enable targeted marketing campaigns and consumer engagement.
2.3 billion people worldwide have smartphones and by 2020 there will be 35 billion connected devices, from cars to fridges. Online shopping is mainstream, with most consumers checking prices online before purchasing in stores. While this is a nearly universal phenomenon, it is particularly relevant for Millennials and Generation Z. According to Cambridge Design Partners, 70% of under 25 year-olds want to be connected everywhere 24/7, so called FOBO – fear of being offline. How can smart packaging ride the wave of digital market opportunity?
- Supply chain optimization: Smart packaging is already used widely in warehouses where RFID (radio-frequency identification) systems have become proven technologies for inventory management and shipment tracking, which has in turn led to decreasing costs for this technology. This technology is quickly eliminating the need to scan barcodes for every pallet coming in to a warehouse, replacing it with connectivity solutions like readers at warehouse gates. Innovative European packaging companies like Stora Enso are starting to offer this as a fully integrated data service.
- Brand and product protection: For consumer facing packaging, the dominant present focus for ‘smart’ packages is in high end products where theft & counterfeit protection is particularly important. Brand and product protection remains a top concern for brands in the world of ecommerce where measures to ensure items are delivered tamper-free and online markets avoid fictional products is growing in importance. As costs of RFID technologies decrease, there is promise for their use in a wide variety of products and packaging and cheaper versions are starting to emerge.
- Consumer engagement: In it’s newest manifestation, smart packaging becomes a portal to communicate with the consumer. Brands see the opportunity to increase consumer involvement through this kind packaging. For pharmaceutical products for example, smart packaging can provide information on safety, options to chat with an online representative, video instructions, and advice – replacing the archaic drug script, says GSK Consumer Healthcare. Absolute drinks is testing ‘connected’ bottles for Malibu and Jameson lines to gain consumer insights and develop brand loyalty by creating individualized experiences. Using Near-field communication (NFC) embedded in bottle sleeves, the company provides opportunities to win prizes like trips, participate in competitions, or find nearby bars when the user taps the NFC tag with their phones, which now are mostly all NFC-enabled. This helps develop brand loyalty by supporting the customer’s experience with the product. It also allows the brand to learn customers’ behavior – like how long a bottle sits on shelf and how it is consumed. Smart packaging could support emerging subscription models – like the Amazon dash button, where shopping baskets are automatically replenished based on buying patterns and a ‘reminder’ message that is sent out to trigger repurchase.
Sustainability may be an afterthought in the smart packaging conversation, but there are certainly important implications. Currently, NFC tags are permitted in European recycling systems and do not disrupt them. Beyond that, they could also serve a role in communicating package material content with MRFs and provide added value to packages that enables their re-use – such as the RFID enabled refillable Coke bottle in UK schools to reduce waste.
The possibilities for sustainable, resilient and data driven packaging systems are enormous and the European market is helping to trailblaze the way.