As companies and brands move away from plastics, the remaining factories are converting their production lines to accommodate more profitable renewable materials.
But where does this the label industry end up? With label material grades in decline, paper mills are choosing to meet the need for sustainable packaging instead. Will this lead to problems for the supply volumes of labels that are still trying to meet demand?
A change in infrastructure
If you’ve read anything about the paper industry recently, you’ll know that the market has been fluctuating over the past few years. Especially paper mills have gone through a difficult period: low profits, rising prices, fluctuating demand. Now an idea that has been debated for years is finally conquering the market: sustainability.
With the global warming crisis drawing attention to the environment, consumers have become more aware of how the products they buy are affecting the world they live in. To meet consumer preferences, businesses around the world are following suit. And the paper mills are realizing it.
Many have taken steps to go green and shift the production of standard plastic packaging to more sustainable packaging. Converting these machines is an undertaking of large investments, time and innovation. When working with these new materials, manufacturers need to be aware of:
- Develop the right packaging solution
- Offering recyclable replacement options
- Offering a lower carbon footprint
- Creation of packaging with sufficient barrier properties
Now the industries that use these mills, such as the self-adhesive label industry, have to compete for the use of these machines. And time is money. So, if plastic is thrown out of production, how are the machinery used in these mills?
Two words: renewable packaging. These alternative and environmentally friendly materials are flourishing in the current global market.
A modification to the packaging
The rise of renewable packaging is attracting greater demand for paper and other alternative materials. Instead of plastics, more and more companies are taking a greener approach with recyclable materials for their products, even those that were previously sold in plastics.
Today, plastic is being replaced with renewable materials such as:
But why is this market changing? Simple: sustainable packaging is a booming market.
Sustainable packaging is projected to grow to $ 348 billion by 2026, up from $ 247 billion in 2019. This coincides with the problems currently plaguing the pulp industry; in particular higher prices and depleted stocks of raw materials.
For example, Northern Bleached Softwood Kraft (NBSK), a key supply in label production, increased in mid-April to its all-time high price of $ 1,665 / ton, according to RISI. Despite the demand, the supply is “very limited”, to the point that customers cannot take orders.
With increasing demand for renewable materials, paper mills and paper mills are converting their machinery to use packaging as a way to compensate. This takes a lot of time from manufacturing items such as self-adhesive labels, which are already in short supply.
If we want to know where these changes are going, we should look no further than what is happening in Europe. This is because the European market tends to influence the direction the US market takes.
Europe’s green initiative
To understand where the US paper industry is heading, we should take a look at the policies Europe has adopted. How come? Because we are on track to follow suit. For years, the world has shifted to more sustainable options, and Europe has been at the forefront of these practices.
Topics such as the critical impact of climate change and global warming are driving consumers to pay more attention to the everyday products they buy, use and dispose of. This increase in awareness is driving companies to take greener initiatives through renewable, recyclable and sustainable materials. It also means saying goodbye to plastic.
Do you ever stop to think about how much plastic your daily life consumes? Products purchased only to be used and thrown away after a single use.
And nowadays they are used for practically everything, such as:
- Water bottles
- Shopping bags
- Food containers
- Glasses for drinks
- Packaging materials
However, the recent pandemic has caused an unprecedented surge in single-use plastics production, especially with the boom in e-commerce and D2C packaging. To help stem the continued increase in environmentally harmful materials, the European Union (EU) approved a ban on specific single-use plastics in July 2021.
They defined these products:
- “Made entirely or partially of plastic and which is not conceived, designed or placed on the market to be used multiple times for the same product.”
The ban concerns products for which cheaper and more eco-friendly alternatives are available. Thanks to these more sustainable materials, Europe has become the market leader with a specific type of packaging: aseptic packaging.
Think back to the middle school days when lunch was served. Remember those iconic milk cartons they served you? If so, know about aseptic packaging! It is also an expanding market, 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 sterilized separately before being combined and sealed in a sterilized environment. And because it’s environmentally friendly, aseptic packaging is finding its way onto more store shelves.
It is commonly used for beverages, food and pharmaceuticals, which is why the sterilization process is so critical – it helps extend shelf life by safely preserving the product with fewer additives.
Different materials are layered together, providing the protection needed by aseptic standards. This includes materials such as:
These material alternatives significantly reduce the need for plastic packaging. As these sustainable options become more integrated into the European market, influence is gaining momentum in the United States. So what changes have been made to accommodate this market shift?
The United States is moving towards sustainability
Many US factories have converted key machinery to meet the growing demand for alternative packaging. For example, PCA (Packaging Corp. of America) announced plans in 2021 to permanently convert one of its paper machines to produce cardboard for use in corrugated packaging. The conversion would take three years to complete and cost $ 440 million.
The shift to replacing plastic packaging with more sustainable materials is one example, with interest in these products growing causing paper mills to notice.
Many US companies have taken the lead in the sustainable packaging market. Sustainability and development goals are big initiatives for these brands, often driven by the environmentally friendly packaging options they market.
One example is Boxed Water. An alternative to the commonly used plastic water bottle, Boxed Water was the first company to offer sustainable packaging for this type of single-use product in 2009.
Their brand is all about providing “a better solution” to help the planet with 92% plant-based packaging and a reduction in plastic waste. The packaging literally states “canned water is better”, as it is 100% recyclable and refillable with a 36% lower carbon footprint. Products like Boxed Water are where we see the shift to packaging products growing.
Companies that embrace sustainability
Boxed Water is not the only company to make progress in the use of sustainable materials. As consumer shopping habits continue to lean towards greener options, big brands are taking notice. The 17 Sustainable Development Goals published by the United Nations are often cited by companies detailing their green initiatives.
For packaging, these may seem like commitments to:
- Recyclable materials
- Reduction of plastic waste
- Reduce greenhouse gas emissions
- Sustainability produced
In many cases, these changes focus on the packaging of new products. Especially for more sustainable options so that items can be reused or recycled.
Sustainability is creating new opportunities for companies to trade wasteful plastics for environmentally friendly options. As this trend continues to grow, more and more paper mills are likely to shift their focus from labels to producing renewable packaging. With fewer mills left, competition for production time is likely to increase.
Ultimately, we are watching the current market change before our eyes.