June 7, 2011
by George Guidoni, Editor
Many of us are not too young to remember when making or working with paper used to be a virtual licence to print money.
And while the pulp-and-paper industry’s glory days of the 1980s and early 1990s may now seem like ancient history—given the relentless widespread shift from print media to online publishing and other technological marvels of the Internet age—rumors of paper’s death as a valuable consumer commodity have been greatly exaggerated.
There may well be no way for paper products like newsprint and office paper to return to their former heights of gung-ho profitability and continuos mega capital investment, granted, but it’s a far less foregone conclusion when it comes to paperboard and corrugated packaging products.
In fact, in light of the growing public and corporate emphasis on packaging sustainability worldwide, the improving global market demand for paper products like folding cartons, produce shipping carriers and paper-based protective packaging is already making the long-term market picture more of a glass half-full scenario at long last.
“Sustainability is definitely a major game-changer that has vastly improved the market prospects for paper packaging in relationship to plastic packaging,” according to Frank Perkowski, president of paper industry consultancy BDA (Business Development Advisory) in Marietta, Ga.
“While we are still in the early stages of this movement, this is a whole new dynamic that has already slowed the historic shift in market-share gains for plastic packaging at the expense of paper,” Perkowski stated in his keynote address at last month’s ICE (International Converting Exhibition) USA trade show in Orlando, Fla. “For the first time, we are already seeing new packaging products being developed—things like paper-based cans, bottles, closures, pouches, blister-packs, etc.—that are all paper-based.
“This shift is also complemented by growing demand by retailers for lighter-weight packaging materials and better utilization of packaging materials, which is why we are seeing growth in retail-ready packaging, tray-packs, and other packaging formats that provide good opportunities for paper converters,” added Perkowski. “There are also great market opportunities for paper to displace metal, glass and other forms of rigid packaging materials, which is again driven by sustainability concerns as they relate to transportation and other supply-chain efficiency issues.”
According to Perkowski, packaging papers already account for 25 per cent of the flexible packaging market in North America and a 15-percent share of all food packaging, with both numbers projected to trend upwards in coming years.
“There are major issues that have arisen as a result of years and years of using plastic packaging—not the least of them these massive ‘islands’ of discarded plastic packaging products floating about in the world’s seas and oceans and finally coming to shore, and while it may not have yet registered strongly in public consciousness, at least in the U.S., it is bound do so in the next few years,” Perkowski predicts. “A lot of major CPG (consumer packaged goods) manufacturers already understand this, with just about every major one of them having identified the need to reduce their use of plastic packaging as a key objective.
“It will still take some major technological improvements for paper to displace plastics to a greater extent—better barrier protection, clearer paper warps, more tear and burst strength, etc.—but there is already good progress being made in all these areas,” Perkowski observes. “The important thing is that consumers become better aware of the advantages of paper-based packaging as a more sustainable solution, and as that awareness continues to grow, paper will continue to become better-positioned to gain market share from plastic in flexible packaging and other key packaging segments.”