Packaging in the 2020s: New Opportunities Battle Enduring Challenges

By John Blake | August 04, 2020 | 0 Comments

Supply ChainPower of the Profession

Entering the decade with aspirations of new hopes and opportunities, we were suddenly stricken with a global pandemic.

COVID-19 has posed many unexpected challenges in all aspects of life around the world, but it has also shown the great resiliency and willingness of individuals and organizations to adapt, survive and in some cases thrive in these challenging times. The coronavirus may have lasting effects, but it’s too soon to know for sure what those effects might be.

Conversely, the paradox of (plastic) packaging, with its protective properties and low costs being offset by its destructive impact on the environment, has been decades in the making. This decade marks a breaking point, as production of packaging and plastics is expected to continue to grow to unmanageable levels if not addressed. A billion tons of plastic will be added to the Earth by 2040 unless drastic action is taken. With limited infrastructure and poor recycling rates, that plastic is destined for our oceans, beaches and drinking water. Microplastics have already been detected in locations including the Alps, the Arctic and remote islands.

Driving this environmental crisis is consumers’ appetite for packaged products having greatly outpaced the global infrastructure’s ability to manage, contain and reuse these materials. Unfortunately, the packaging industry has gotten so good at producing packaging that it is more cost-effective to throw packaging away after a single use than it is to reclaim it.

There has been some progress. Sustainable packaging initiatives saw dramatic growth in the past few years, with emphasis on measurable packaging improvements. Organizations like the Ellen MacArthur Foundation (EMF), which was founded in 2010, have brought awareness to the use of packaging and the harmful effects of the mismanagement of packaging and plastic waste. EMF and other organizations, foundations and consortiums have been platforms for setting aggressive sustainable packaging goals and to join forces to solve some of packaging’s most difficult challenges.

Notable progress was made from 2013 through 2019, although the baseline was very low or non-existent. The year 2013 saw the first gathering of experts under the Circular Economy 100 Summit led by the EMF. In 2017, over 40 industry leaders endorsed a global action plan on plastic packaging, including some of the most well-known brands in the consumer packaged goods (CPG) and food and beverage industries. In October 2019, the EMF and the United Nations Environment Programme published the first annual New Plastics Economy Global Commitment progress report. In one year the number of members of the signatory group grew from 250 to more than 450. This group includes six of the top 10 global fast-moving consumer goods (FMCG) companies, seven of the top 10 global plastic packaging producers and five of the top 15 global retailers.

Public announcements of sustainable packaging goals have become common in the highly visible CPG industry and are now being taken up in other sectors. Goals primarily target recycling, reuse and reduction. Targets are set for 2025 and 2030, but despite these ambitious goals we are still producing excessive amounts of packaging and the infrastructure cannot handle the volume and scale. Still today, many materials that are 100% recyclable have low single- and double-digit recycling rates.

One key challenge is a lack of global infrastructure to collect, process and reintroduce post-consumer packaging back into a circular economy. The economics are just not there. Without government and industry funding, virgin materials will still be cheaper and easier to process than reclaimed packaging.  The lack of scale is so bad that several brands with strong commitments for recycled content are taking stakes in startups to assure they can get access to the materials they need to meet their needs.

Plastic films remain one of the most challenging packaging formats. The material is not compatible with existing recycling equipment. If introduced, it binds up equipment, causing shutdowns for cleaning and removal. A pilot launched in 2019 and funded by Materials Recovery for the Future has one recycling facility in Pennsylvania testing equipment upgrades to process thin film plastics. This is only one of more than 600 recycling facilities in the United States that would also need equipment upgrades. All this can prove the ability to process thin film plastics — but we still need an aftermarket for the recycled materials. Ultimately, economics will drive any significant progress in this area.

The COVID-19 pandemic has not only impacted economies and created a health crisis. It has changed the landscape of how packaging is used and what packaging is used. During the pandemic, the packaging megatrends of e-commerce and convenience have seen unprecedented growth — leading to increases in packaging consumption and plastics to meet hygiene concerns. We see governments and industry extending great efforts and sparing no expense to get the pandemic under control by developing testing and vaccines.

Packaging waste has been an issue ignored for decades. It will continue to spread its destructive impact, polluting our planet and putting public health at risk unless it is taken as seriously as the pandemic.

John Blake,
Senior Director Analyst,
Gartner Supply Chain


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