The Impact of Sustainability on the Food Packaging Chain

|Mar 25, 2021

Over the years the importance of and interest in sustainability has grown significantly. Not surprisingly since the environment is under enormous pressure, customer needs and demands are changing and increasingly stringent rules and regulations in support of sustainability are being set.

The EU Single-Use Plastics Directive
This changing landscape also applies to the food (packaging) industry where sustainability tops the agenda. From food production to food packaging, the full value chain is being pushed by rules and legislation toward sustainability and by consumers who increasingly critically review “unsustainable” production and packaging of food. The European Union (EU) for example, is strongly committed to tackle the waste caused by single-use plastic, as this type of waste makes up 70% of all marine litter. The EU set a ‘Single-Use Plastics Directive’ stating that this year, EU members are required to ban products like disposable plastic straws, plastic cotton buds, plastic stirrers, and single-use plastic cutlery and plates.

Additionally, by the end of 2024, it will be mandatory in the EU for caps and lids to remain attached to beverage containers with a capacity of up to three liters as part of the new Single-Use Plastics Directive. This small design adaptation is expected to prevent 10% of the plastic litter found on European beaches.

Changing customer expectations
Consumer demand is driving change as well. An Accenture survey of 6,000 consumers in 11 countries across North America, Europe and Asia concluded that nearly three-quarters (72%) of the respondents said that they currently buy more environmentally friendly products than they did five years ago. Additionally, 81% said they expect to buy more of these products over the next five years. Increasingly consumers want to ‘do good’ and take responsibility. Consequently, niche brands with sustainable propositions are gaining market share.

It is not that food manufacturers and suppliers on the other side are resting on their laurels. An increasing number want to lead with purpose and use sustainability as a driver of competitive advantage. Frankly, it is a changing landscape requiring different needs for all stakeholders involved.

For now, let us focus on the impact for food packaging suppliers since they have an important role to play.

Challenges for packaging suppliers
Annually, 300 million tons of plastic are produced and half of that is only used one time. Specifically, plastic used for packaging represents about 40% of the total plastic produced and most of it ends up in a landfill. As such, packaging suppliers are reconsidering their materials and methods and are looking into new recycling techniques. They are at the forefront of a significant transformation. More sustainable packaging, less plastic and more recycling. Some leading companies are already offering sustainable packaging alternatives and/or production lines.

However, adoption of these innovative and sustainable solutions requires investment from food manufacturers. Investments that can be perceived as requirements to comply with sustainable rules and regulations and next to food safety fundamentals for continuing business. While most of the food manufacturers are very willing, limited budgets and margins often make adoption challenging – but not impossible.

The potential of financing for food packaging
No stakeholder involved doubts the necessity of rethinking and transforming food packaging. All are strongly committed to take responsibility and answer customer demands. However, change, innovation and adoption require investments.

Financing can help the packaging industry with their go-to-market strategy and make their sustainable portfolio more attainable for food manufacturers.

Let us therefore be in this together and explore how financial solutions can benefit the adoption of sustainable packaging and help grow your business. James Ferguson, Global New Business Manager, can answer any questions about how financing can support your food business, or needs of your customers, please contact him, or check out our website for more information.