POUNCING ON PLASTIC – INTERNATIONAL

The packaging used by consumer products companies is made up in large part by plastic coverings.  Proctor & Gamble and Unilever are big users of plastic.  And, of the millions of tons of packaging that Nestle puts out each year, around one-third of it is plastic substances.

The material is said to assist in prolonging the shelf-life of goods, while at the same time allowing see-through packaging that tends to bolster sales – customers like to see what’s inside the packages they purchase.  I happen to be of the opinion that I’d rather take the word of the manufacturer and have opaque cardboard packaging rather than to have to wrestle with the almost-impossible to defeat plastic packaging – but, clearly, I’m in the minority on this score.  However, I might be assisted in my cause by the fact that China, importer of 45% of the world’s plastic trash for decades, has banned imports of low-grade and single-use plastic containers for 2019.  And the European Union has also banned single-use plastic in food and drinks by 2021.  Consumer goods companies currently spend 5-10% of revenues on packaging – this is expected to rise as they attempt to meet the needs of packaging their products without the use of plastic.  Nestle, Unilever and Coca-Cola have all committed to making their packaging 100% recyclable by 2025.  This will likely increase the cost of goods, as the price of “better” packaging is passed on to the consumer.   And, in the U.K., for example, with the Extended Producer Responsibility, companies could wind up paying the full cost of disposing of plastic packaging rather than the 10% they pay currently.  As a result, companies like U.K.’s Costa (purchased by Coca-Cola last August) has offered to pay a 150% supplement to the $63 market rate for recycling a ton of discarded coffee cups.  All of these extra costs could also create business for other companies, like International Paper or DS Smith, who are currently negotiating with companies that are planning on switching from plastic to paper.  Brands that don’t comply with the “change scenario” are likely to risk their reputations through “Plastic Attacks,” where shoppers pay for groceries but leave packaging for the stores to deal with.  Good luck on that with most plastic packaging these days – One would have to carry around a small chain saw to intrude on most of the plastic wrappings on goods!  Regardless of consumers’ reactions to packaging, the issue will likely be front-and-center during 2019 as environmentalists and others of the touchy-feelie persuasion choose to make it so.

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