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Waste Not
Recyclate – A New Lease on Life for Consumer Packaging?

Consumers appreciate recycled packaging as long as it doesn’t affect the quality, functionality and price of the product. But how do brands remain competitive in view of added costs for high-quality recycling and the low price of virgin plastics?

More and more packaging is made from post-consumer recycled waste. We are already used to bottles made of discarded plastic and packaging made of recycled paper or pulp. More recently, there has been news about food-grade packaging manufactured from chemically recycled mixed plastic waste for such renowned brands as Magnum ice cream, Knorr powdered stock and Zott Italian mozzarella.

Personal care and healthcare products are also being sold in consumer packaging made from discarded plastic. Soon, Tupperware will come out with a reusable drinking mug and straw; and Royal Philips is showcasing a prototype of its “Avent” baby bottle, all made from chemically recycled polymers.

For packaged goods companies, the motivation to use secondary packaging material is driven by a shift in consumer awareness and a rapidly changing regulatory environment.

While in the United States, recycling rates for scrap plastic are at 8 percent and sinking, quite the opposite trend can be observed on the other side of the Atlantic. A circular economy, including ambitious waste and recycling laws, will in fact be the number one priority of the “European Green Deal.” EU policymakers assert that all plastics packaging placed on the EU market need to be designed to be either reusable or recyclable — and in a cost-effective way. The goal is to push companies to use 10 million tonnes of recycled plastics in their packaging by 2025 — quadrupling the current demand. In the UK, the government has proposed a tax on the production and import of plastic packaging with less than 30 percent recycled content as from April 2022.

Net Zero: Aspiration vs. Reality in CPG & Retail

With thousands of consumer packaged goods (CPG) companies and retailers making net-zero commitments, but only 25% of them on track to meet them by 2035, there is a clear gap between aspirational thinking and reality on the ground. Join us as Capgemini and frog detail some of the tools, technologies, and shifts in mindset and skillset needed for companies to walk their talk and leave a legacy of resilience and stewardship for generations to come — Tuesday, Oct. 17 at SB'23 San Diego.

In response to regulatory pressure, 70 business organisations in February 2019 submitted voluntary pledges to produce or use more recycled plastics, with the aim to increase the market for recycled plastics by at least 60 percent by 2025. Six of the world's biggest users of packaging committed to increase the use of recycled plastic in packaging fivefold, going from an average 4 percent recyclates in 2018 to 22 percent in 2025.

Towards a new normal

These combined efforts go in line with the trend that consumers are increasingly concerned at their role in contributing to the plastic crisis. They are starting to take the environmental impact of their purchasing decisions into account and are motivated to engage in recycling because they care for the planet.

In its April 2019 Omnibus study of more than 21,000 US households, Nielsen found that products that are environmentally friendly and use recycled packaging resonate most strongly with consumers overall. According to a survey by GFK, consumers expect manufacturers to take the first action and help them consume more responsibly by providing them more eco-friendly products. Finally, a DS Smith survey in July 2019 reveals that nine in ten respondents would choose a product packaged in less plastic when offered a choice between two goods of the same quality.

These recent findings indicate a significant market potential. Since the buying public perceives product and packaging more and more as an entity, they see it as contradictory — or even as an act of greenwashing — if a product that is declared to be sustainable comes over-packaged or in unsustainable packaging. From this perspective, products with recycled packaging are considered in line with consumer expectations and part of the mainstream market, rather than a “green” niche.

Make or break

While some companies are more compliance-driven, others are taking a lead with circular business models in hope of reaping the benefits of cost savings, increasing brand valorisation and — eventually — increased market share. For these pioneers and their customers, packaging must be fully circular — a tough challenge, considering the low market price of virgin plastics. An example for this forward-looking approach is Werner & Mertz, a producer of eco-friendly cleaning agents and sanitary products for both private and professional users in Europe, the US and Japan. The company is best known for its Frosch product line; according to Reader’s Digest, it is the “most trusted consumer brand” today in the household cleaner category in Germany.

Since 2014, the company uses 100 percent recyclate for its packaging, mainly bottles made of PET and HDPE. Pursuing cradle-to-cradle principles, plastic is taken from domestic waste streams and kept in a closed material and production loop. To make it work, Werner & Mertz initiated the “Recyclate Initiative,” taking on board the key partners of its supply chain. The company uses a modern laser technology developed to fine-sort PET granules and flakes in a way that only transparent particles remain. The subsequent extrusion process eliminates residual impurities resulting in recyclate that is turned into transparent plastic bottles. Compared to PET made of crude oil, this process requires two-thirds less energy, cutting CO2 emissions by half.

However, given the higher costs for collecting, sorting and recycling, the implementation of a genuine cradle-to-cradle packaging model doesn’t come for free. At the same time, the consumer expects the end product to be of uncompromised quality, functionality and value for money — down to the packaging. That is why Werner & Mertz had to make sure that their re-designed PET bottles appeared unchanged — thus fully transparent — while maintaining the product’s retail price.

“For us, it’s not about selling ‘green’ products at a premium but providing sustainable consumer products of superior quality at a competitive price,” explains Timothy Glaz, Head of Corporate Affairs. From his experience, customers care about the fact that the product they are buying is eco-friendly as a whole, and doesn’t have a negative impact on the environment — as non-recyclable, hard-to-recycle, or virgin plastic might have. “This is what our clients expect and this is what our brand stands for.”

The company wants to be part of the solution, rather than the plastic waste problem. Consumers don’t necessarily want to learn about the recycling process in technical detail. The positive effect this experience has on buying decisions came to the fore when, in 2018, the company ran an on-site information campaign in a local retail outlet, where shoppers could actually touch and feel the recycled PE and PET plastic flakes the bottles are made from and learn how much plastic waste they could help avoid. As a result, the company recorded a substantial increase in sales in this particular outlet.

New regulatory stimuli ahead

To stimulate the demand for recyclates, and for circular packaging models to become competitive, the relative market price for recycled compared to virgin plastic would need to be brought down on a stable basis. On the consumer side, there is the growing desire to take an active part in reducing the waste of virgin resources and to grasp the positive impact of this behaviour on the environment. Who wouldn’t appreciate to know that every ton of plastic bottles recycled keeps 3.8 barrels of crude oil in the ground and eventually out of the atmosphere? But the challenge remains in how to communicate the positive impact of sustainable packaging in an effective and trustworthy manner, without it being perceived as greenwashing. The trust in labels is low — due to their proliferation, lack of comparability and doubts about their validity.

For this reason, product labelling is currently under review by the EU and we can expect to see action to tighten the rules. A good starting point for this would be the ongoing work by the European Commission on the Product Environmental Footprint (PEF) method, which measures the life-cycle environmental performance and relevant impacts of products, including CO2 footprint and the depletion of natural resources. Official ecolabels based on a PEF would provide consumers with comparable and trustworthy information on eco-performance; while digital-enabled solutions such as QR codes, for example, could link to more specific details online. And why not introduce an international label certifying the use of 100 percent secondary packaging material? This would be of interest not only for consumers but also for “green” public procurement.

Sustainable packaging on the upswing

In the past, many circular initiatives had a supply-side focus. For the transition into a circular economy to be successful, consumer demand also needs to be understood. Active engagement in changing consumption patterns is critical. Recent surveys confirm that more and more consumers perceive sustainable packaging as positive, but feel poorly informed about the recyclability of packaging in general. Knowing that a product comes in a sustainable packaging with a lower environmental impact has a positive effect on buying decisions and brand loyalty. It is appreciated as long as it doesn’t affect the quality, functionality and price of the end product.

From that perspective, more sustainable packaging is no longer a choice for brands, but a corporate necessity. For many companies, however, this is a tough challenge, considering the low market price of virgin plastics. To facilitate the uptake of recyclates in packaging at competitive prices, ways need to be found to compensate, or help finance the costs of re-designing and high-quality recycling. Whilst providing such incentives, a level playing field needs to be maintained through ambitious recycling goals and tougher laws on waste and packaging waste. This combination of incentives and a clear regulatory framework will lead towards more circular packaging models.


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