A few dynamics are making a big impact on the future of fiber packaging: consumer expectations, geographic supply and e-commerce.
Those are three dynamics that Tom Stigers, executive vice president of corrugated paper solutions at Atlanta-based WestRock, focused on in his keynote presentation titled The Importance of Packaging on Oct. 23 at the Paper & Plastics Recycling Conference. Stigers offered WestRock’s perspective on the future of the packaging industry and how recycled content fits into that.
He said the packaging industry has been changing rapidly in recent years, adding that he thinks the future of packaging will be focused on sustainability.
“The pace of change and demand by consumers will get faster—there’s no escaping that,” he said. “The world of sustainable packaging is here to stay—the landscape has changed and those who innovate will survive.”
Dynamic 1: Consumer expectations
Consumer expectations are changing, and sustainable packaging is a key consideration for consumers when they purchase products today. Stigers said WestRock occasionally surveys consumers, packaging experts and brand managers to learn their preferences and expectations for packaging. Based on a 2018 survey WestRock conducted called Packaging Matters, Stigers said the company learned the following details:
- 82 percent of consumers regard paperboard and fiberboard as good for the environment;
- 59 percent of consumers perceive sustainable packaging positively; and
- 57 percent of consumers are more likely to purchase a brand as a result of their sustainable packaging.
“The world is looking for sustainable packaging alternatives—that is the voice of the consumer. That is consumers’ expectations and demands,” Stigers said.
He added that more and more brands are responding to the consumer demand for sustainable packaging.
“Big brands are making decisions driven by the voice of the consumer,” he said.
In 2018 alone, dozens of companies announced sustainable packaging commitments. For instance, Dunkin’ Donuts announced in February 2018 that it would eliminate foam cups globally by the end of 2020. Aldi announced in March 2020 that its private brand packaging would be recyclable, compostable or reusable by 2022. In addition, Nestlé announced in April 2018 that it aims to have 100 percent recyclable or reusable packaging by 2025. Other companies that made announcements like this in 2018 included McDonalds, Waitrose, Tesco, IKEA, Starbucks, PepsiCo, Johnson & Johnson, Kellogg’s, Danone, Mondelēz International and Kroger to name a few.
Dynamic 2: Geographic supply
The geographic supply of fiber to be used in packaging is changing. In the past, Stigers said China consumed the majority of recovered fiber and old corrugated containers (OCC) and it produced most fiber packaging products. Yet that landscape is changing as China has dramatically restricted its imports of recovered fiber, he said.
Stigers said Numera Analytics has forecasted that Chinese containerboard demand will be very flat through 2022. Yet with less recovered fiber being imported by China, the nation will likely have a deficit of recovered fiber needed to produce containerboard products. He added that China will be unable to close that gap from domestic sources, as well. Stigers concluded that fiber will need to come from somewhere—the nation will need to find alternate sources of recovered fiber or increase containerboard imports to meet packaging needs.
He noted that China is importing more containerboard from the U.S. to meet packaging product needs; however, he said the nation also is importing more of its containerboard from other Asian nations.
Dynamic 3: E-commerce
E-commerce has changed dynamics for recovered fiber and packaging, Stigers said. The recovery rate of OCC from brick-and-mortar stores has typically been about 96 percent, while the recovery rate of OCC from e-commerce packaging is only about 48 to 50 percent—and that OCC typically ends up in a single-stream recycling program with decreased quality.
Stigers said WestRock has been working to respond to the e-commerce dynamic in recent years by investing in equipment such as optical sorters that can better sort OCC from residential recycling programs. He added that inbound quality evaluations also can help to ensure better bale quality for paper mills.
“We audit [our suppliers] on a regular basis and audit material as it comes into the plant,” he said. “We measure prohibitives, moisture in bales. We gather data and make decisions based on that—decisions on who we’ll do business within the long haul. The suppliers who send us the best material that is the best for our process are the ones we will do business with over time.”