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Sustainable Food Packaging Grows Despite Economy

solid-waste-recoveryWhile many food and beverage companies are embracing recycled and sustainable packaging options, the sector faces its own challenges in economic sustainability because of the global economic slowdown and how that affects recycling prices. Yet market leaders like Wal-Mart are having a large impact on the use of sustainable packaging options throughout the supply chain.

Despite the challenges, the nearly $35 billion U.S. market for food and beverage packaging has ample opportunities for growth in sustainable packaging options, according to a new report on paper, plastic, metal, glass and flexible packaging for the food and beverage industries.

“Sustainable (‘Green’) Packaging Market for Food and Beverage Worldwide” from SBI Reports shows that, by weight, 43 percent of containers and packaging generated in municipal solid waste were recycled in 2007.

Prices for many recycled products achieved  all-time highs in 2008, yet the downturn in the U.S. economy brought precipitous declines in recyclables pricing, the report notes.

Some recyclable prices fell as much as 90 percent. For example, mixed paper and cardboard prices fell from $105 a ton to just $25. Plastic bottles that fetched up 25 cents a pound fell to 2 cents. And aluminum can pricing went from 80 cents a pound to 40 cents.

The world market for food and beverage packaging is about $310 billion, with the U.S., Europe and Asia accounting for 90 percent.

Wal-Mart

One of the largest drivers in sustainable packaging is Wal-Mart. Its sustainability initiative should help the company reduce overall packaging 5 percent by 2013, resulting in savings in both shipping costs and carbon emissions.

Wal-Mart’s Packaging Scorecard, introduced in 2006, rates its global suppliers and helps the retail giant guide its buying decisions. The company says the initiative will result in $3.4 billion in direct savings and $11 billion across its supply chain.

Paper

At 83 million tons, paper and corrugated makes up 33 percent of U.S. municipal solid waste, and also the biggest recycling opportunity. Containers and packaging comprised 40 million tons, or 16 percent of all municipal waste, according to the report. These figures include 500,000 tons of milk cartons, 4 million tons of folding cartons, and 1.4 million tons of miscelaneous paper-based packaging.

United States 2008 exports of $2.6 billion in recovered paper materials represents an increase of
18 percent since 2004, the report states.

Compared to exports, U.S. imports of $65 million in recovered paper materials were minimal. Still, such imports have grown 20 percent since 2004. Unbleached kraft paper (paperboard/corrugated
paper/paperboard) accounted for $47 million.

Metal

Aluminum and steel recycling remains an attractive area because of its low cost relative to new production. Recycling aluminum requires 95 percent less energy than production from raw materials. Meanwhile, for each ton of recycled steel, 2.5 tons of iron ore and half a ton of coal is saved, the report notes.

For consumers, recycling of aluminum is another matter. Aluminum recycling rates peaked in 1997 at 67 percent. By 2003 the rate had dropped to 50 percent. Now, the rate has rebounded slightly, with 54 percent of aluminum cans being recycled, according to figures from the Aluminum Association, the Can Manufacturers Association and the Institute of Scrap Recycling Industries.

The Environmental Protection Agency, which does not include imports and exports in its figures, has a slightly different take on the situation, according to SBI Reports. EPA reports that, in 2007, 49 percent of aluminum beer and soft drink cans were recovered. Additionally, EPA says recyclers recovered 10 percent  of aluminum foils and closures used in containers, along with about 65 percent of steel food cans.

By 2015, the Aluminum Association aims for 75 percent of all beverage cans to be recycled.

Glass

While costly to transport, glass containers offer benefits in that they can reused numerous times before recycling.

A primary destination for recycled glass is building insulation, which can contain up to 40 percent recycled glass. The North American Insulation Manufacturers Association reports that about 300,000 tons of recycled glass annually goes into producing thermal and acoustical insulation.

Plastic

Here are some charts detailing the market for recyclable plastics.

plastic-bottle-recycling-uses

recycled-pet-uses

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2 thoughts on “Sustainable Food Packaging Grows Despite Economy

  1. Great post. I love hearing that people are finally trying to reduce the ridiculous amount of packaging that we do (or rather, overdo). Wal-mart surprises me though, I never thought a big company like that would be so willing to try for sustainability.

  2. Walmart management knows that sustainability, like quality can be the most meaningful form of cost savings that can be pursued. The principle of continuous improvement is a fundamental keystone to quality and will be too for sustainability. Once companies get turned on to the savings, sustainability will gain momentum (although there will also be room for companies making changes due to an underlying Social Conscience present in some leaders).

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