By: The Working Forest Staff
Author: Pirita Huotari
FOREST2MARKET — The global conversation surrounding sustainability and the ways in which we can incorporate more sustainable initiatives into our lives has accelerated in recent years, and it is poised to become increasingly important. Individuals and companies are beginning to assess the ways in which their actions contribute to environmental footprints, which presents a golden opportunity for the pulp and paper industry when it comes to developing innovative, sustainable packaging substitutes — specifically, fiber-based food packaging.
With several major food corporations like McDonalds making the commitment to transition to 100% fiber-based packaging by 2025, a whole range of new opportunities has opened up for the P&P industry; several additional companies are expected to make conversions as well.
One of the most favorable factors that come with the switch to fiber-based packaging is that it improves upon corporate sustainability initiatives. Corporate sustainability is a growing concern amongst companies of all sizes, and it is rooted in creating a “green” strategy aimed toward environmental stewardship as well as social, cultural and economic concerns.
Many consumers are also beginning to favor fiber-based packaging over plastic packaging. This could be a great new opportunity for the P&P industry because most consumers have historically demonstrated an unwillingness to pay more for fiber-based packaging over unsustainable, yet cheaper options. However, studies are being published indicating that consumers are ready to start paying more for sustainable products, as the environmental benefits outweigh previous cost hesitations. For example, Nielsen found that 66 percent of consumers surveyed worldwide are willing to pay more for goods from brands that demonstrated social commitment.
Not only are consumers and manufacturers supporting and promoting this changeover in food packaging, but many developing legislative regulations are actually accelerating this conversion as well. Certain regions across the globe are now adding plastic taxes on non-recyclable plastic and enforcing bans on fluorochemicals and single-use plastics. It’s also expected that these bans and regulations are going to increase in prevalence as more and more municipalities begin to recognize sustainability as a top priority.
Along with the obvious environmental benefits, an increase in the production of fiber-based food packing could potentially put many of the machines that were idled due to COVID-19 back into use for new packaging projects in a burgeoning segment that is poised to explode. If suitable technology for barrier coating is available, this would provide an injection of new business for certain segments of the P&P industry, as many mills have curtailed or shuttered as a result of the pandemic.
Substitution Volume and Value
While many plastics can technically be recycled, some plastic types are more difficult to recycle and biodegradability remains problematic, which is the perfect opportunity for the paper industry to present substitute alternatives. As seen in the figure below, production capacity of paper food packaging in Europe has been trending higher annually since 2013.
While these are great opportunities for both the environment and the P&P industry, there are still relatively large barriers to be overcome, which will slow the implementation of these technologies at scale. In order to be a successful substitution, fiber-based packaging needs to outperform the competition and be cost-competitive, and many companies are currently developing strategies, products, prototypes, etc. These large-scale innovations and market disruptions won’t happen overnight, however, the compelling advances being developed by the P&P industry will go a long way towards meeting sustainability guidelines now and in the future.
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