What opportunities does the shift from plastics to paper bring to the global paper and paper packaging industry?

Aug. 15, 2022

Maybe you've seen the difference in product containers on store shelves? Or noticed that your recent online purchase was wrapped in recyclable paper packaging? The shift from plastics to sustainable materials is taking over the market, and all of this is affecting the development of paper mills. As companies and brands move away from plastic packaging, more and more factories are adapting their production lines to accommodate the more profitable market for renewable materials, but how will this affect the paper industry?


   Infrastructure Transformation


   If you have read anything about the paper industry recently, you know that the market has been volatile over the past few years. Paper mills in particular have experienced difficult times: low profits, rising prices, fluctuating demand. Now, once again, sustainability, which has been discussed for many years, is sweeping the market. As the global warming crisis draws attention to the environment, consumers are becoming more aware of how the products they buy affect the world they live in. To meet consumer preferences, companies around the world are following suit.


   Paper mills have also noticed this. Many businesses have taken steps to go green and shift plastic packaging production to more sustainable packaging. Retrofitting these machines requires significant investment, time and innovative technology. When working with these new materials, manufacturers must take care to develop the right packaging solutions, provide recyclable replacement options, provide a lower carbon footprint, and create packaging with adequate barrier properties.


   Change packaging


  The rise of renewable packaging is attracting increased demand for paper and other alternative materials. More and more companies are adopting greener methods to replace plastic, using recycled materials for their products, even those previously sold as plastic. Today, plastics are being replaced by renewable materials such as: paper, corrugated, cardboard, compostable materials. But why is this market changing? Simple: sustainable packaging is a booming market.


   Sustainable packaging is expected to grow from $247 billion in 2019 to $348 billion by 2026. This coincides with the problems currently plaguing the pulp industry, particularly rising prices and depleted raw material inventories. Despite demand, supply was "so tight" that customers were unable to obtain raw materials. As demand for renewable materials increases, pulp and paper mills are transforming their machines to use packaging as a means of compensation. If we want to know where these changes are going, we should look at what is happening in Europe, because the European market tends to influence the direction of the markets in various other regions.


   Green Initiatives in Europe


   Over the years, the world has been shifting towards more sustainable options. Europe has been leading the way in these practices. Topics such as climate change and the severe impact of global warming are driving consumers to pay more attention to the everyday items they buy, use and dispose of. This increased awareness is driving companies to take greener initiatives through renewable, recyclable and sustainable materials. It also means saying goodbye to plastic.


   Have you ever stopped to think about how much plastic consumes your daily life? Purchased products are only used and discarded after one use. Today, they can be used for almost everything, such as: gift box , rigid set-up box , shopping bags , collapsible box , food containers, beverage cups, straws, packaging materials. However, the pandemic has led to an unprecedented surge in the production of single-use plastics, especially with the boom in e-commerce and D2C packaging.


   To help curb the continued growth of environmentally harmful materials, the European Union (EU) passed a ban on certain single-use plastics in July 2021. They define these products as "made in whole or in part from plastic and not conceived, designed or placed on the market for multiple uses of the same product." The ban targets alternatives, more affordable and environmentally friendly products.


   With these more sustainable materials, Europe is the market leader with a specific type of packaging – aseptic packaging. It's also an expanding market that is expected to grow to $81 billion by 2027. But what exactly makes this packaging trend so unique? Aseptic packaging uses a special manufacturing process where products are individually sterilized before being combined and sealed in a sterile environment. And because it's eco-friendly, aseptic packaging is hitting more store shelves. It is commonly used in beverages as well as food and pharmaceuticals, which is why the sterilization process is so important, it helps extend shelf life by safely preserving the product with fewer additives.


   Several layers of materials are laminated together to provide the protection required for sterility standards. This includes the following materials: paper, polyethylene, aluminum, film, etc. These material alternatives have significantly reduced the need for plastic packaging. As these sustainable options become more integrated into the European market, the influence is spreading to the United States. So, what changes have we made to accommodate this market change?


  America’s Turn to Sustainability


  Many U.S. factories have retrofitted critical machinery to accommodate the growing demand for alternative packaging. For example, PCA (Packaging Corporation of America) announced plans to permanently convert one of their paper machines to produce liner for corrugated packaging in 2021. The renovation took three years to complete and cost $440 million. Growing interest in sustainable products has caught the attention of paper mills, exemplified by PCA's shift to more sustainable materials replacing plastic packaging.


   In the sustainable packaging market, many US companies have been taking the initiative. Sustainability goals and development are a huge move for these brands, often driven by the eco-friendly packaging options they promote. An example is Boxed Water. As an alternative to commonly used plastic water bottles, Boxed Water became the first company to offer sustainable packaging for such single-use products back in 2009. Their brand is centered on providing "better solutions" to protect the planet through 92% plant-based packaging and reducing plastic waste. The packaging literally says "Better water in a box" because it's 100 percent recyclable and refillable, with a 36 percent lower carbon footprint. Products like Boxed Water are where we see a shift to packaged products.


   A company that embraces sustainable development


   Boxed Water is not the only company making progress in using sustainable materials. As consumers' buying habits continue to gravitate toward greener options, established brands are paying more attention. The 17 Sustainable Development Goals published by the United Nations are frequently cited by companies detailing their green initiatives. As far as packaging is concerned, it is mainly based on the following commitments: recyclable materials, reducing plastic waste, reducing greenhouse gas emissions, creating sustainability. In many cases, these changes revolved around new product packaging. Especially more sustainable options so that items can be reused or recycled. Here are some examples of how some businesses are changing their packaging to accommodate changes in sustainability.


   Nestlé has been researching trends towards more sustainable packaging, setting out goals to ensure their packaging does not end up in landfills or as litter. Their 2021 Shareholder Sustainability Report states that 74.9% of the company's plastic packaging is designed for recycling. Nestlé also discussed the hazardous materials they plan to eliminate from packaging in the coming years.


   As a German chocolate maker with a sustainability mission, Ritter Sport has been using "fully recyclable single-material packaging made of polypropylene". This recognizable, lightweight material helps reduce packaging compared to more traditional chocolate bar packaging. Although most of the primary packaging is still made of polypropylene, Ritter Sport is working hard on paper packaging.


   Walmart’s website has an entire page devoted to their fight against climate change, including their commitment to reducing unnecessary packaging, making better use of materials, and increasing reuse and recycling. Their Sustainable Packaging Handbook provides practice for "suppliers interested in improved and innovative packaging".


   As a global company, Driscoll's recognized the consequences of single-use plastics and started reducing the material in their own products. Their latest sustainable paper packaging in Europe has "98% and 94% less plastic" respectively. The material is made with FSC certified paper to better protect the product while continuing to promote sustainable solutions for consumers.


  Sustainability has created new opportunities for many companies to replace waste plastic with environmentally friendly materials. As this trend continues to grow, more paper mills are likely to shift their focus from labelling to producing renewable packaging. With fewer factories remaining, competition for production time is likely to intensify. What the final result will be, we can only wait and see.