Packaging
As the consumer-packaged goods (CPG) market quickly evolves to suit the intersection of increased consumer convenience and e-commerce selling, consumer packaged goods brands and their supply chains are rapidly evolving to develop the packaging of the future.
This packaging must meet the needs of consumers as well as balance the desire for brick-and-mortar shelf presence with the needs of massive, automated fulfillment centers and the rigors of their unforgiving supply chains.
These market factors are driving packaging toward efficient and resilient materials that are fit for purpose and often times uniquely complex. However, consumers and governments are also demanding materials that have lower carbon footprints, reduce impact on the ocean, and create less waste. For example, plastics, which currently account for most new packaging introductions, provide unmatched carbon benefits, but they also face low recovery rates, are increasingly found in the environment and are routinely portrayed as a scourge on the environment in the media and by NGOs.
The opportunity for innovation and investment in the packaging and packaging recovery is substantial.
The opportunity for innovation and investment in the packaging and packaging recovery is substantial. While the world’s brands will continue to be pressured to use packaging that extends the life of its products and reduces the use of raw materials, it must also find a way to develop and sustain a “circular” flow of materials – that is to say, ways to keep the molecules of packaging “in motion” in order to preserve energy, reduce carbon, and reduce our dependence on virgin raw materials. The current recovery numbers for plastics speak for themselves - In 2014 over 33 million tons of plastics were produced in the United States while only 3 million tons were recovered according to U.S. EPA estimates.
There is massive room for innovation and investment in order to reduce brands’ environmental risks and footprints, support customer and consumer needs, and increase consumer trust in those brands. Take the Ellen Macarthur New Plastics Economy pledge, a voluntary commitment that over 400 multinational organizations have signed. The pledge commits those brands -- brands with revenues in excess of over $4 trillion-- to remove problematic packaging, develop more reusable and recyclable packaging, and integrate more recycled materials in order to reduce dependence on fossil fuel resources.
These sustainable materials and their supportive circular systems present opportunities for investment in 3 major areas:
Material-specific innovations
Material-specific innovations could impact the existing world of packaging materials – most notably traditional plastics, paper products, glass, and metals. Start-ups worldwide continue to invent and design new materials that reduce carbon footprints, make use of renewable resources, and provide superior product protection. New material companies like Avantium, Living Ink Technologies, and Mango Materials are just a few of the material technology innovators that could provide pathways to more sustainable material solutions.
Package-specific innovations
Package-specific innovations include the companies that are seeking to transform the way consumers receive, consume, and interact with consumer products. These companies seek to disrupt current packaging formats by means of optimizing e-commerce delivery, designing packaging that reduces product spoilage, and by seeking to introduce re-use service models to replace existing single use packaging formats.
Just as PET bottles replaced glass bottles and flexible pouches replaced glass jars, these companies will seek to disrupt the formats of future product introductions. The Loop platform by TerraCycle (an innovative re-use model supported by Unilever, P&G, and others) and Procter and Gamble spinoff technology start-up, AeroFlexx, are just a few of the companies looking to disrupt the packaging format and service space.
Recovery Technology innovators
Recovery Technology Innovators are working to more efficiently and effectively recover a wider spectrum of materials for beneficial re-use to assist brands with their own packaging sustainability goals. New technologies are highly clustered around plastic recovery, and companies like Loop Technologies, who are working to more effectively recover PET plastics through chemical recycling technology, PureCycle Technologies, and even existing brands like Erema GmbH are developing more effective and efficient machinery and technologies that will process a growing spectrum of plastic materials.
Striking a balance between packaging innovation and the need for sustainable management of materials will be a constant challenge, but as consumers and governments demand solutions to protect our climate, lands, and waterways, capital will continue to flow to technologies that minimize impact, reduce use of fossil resources, and keep molecules in play for future use. It is critical that start-ups understand and develop strategies to exploit their products’ environmental benefits and mitigate environmental risks in order to attract a new investor class looking for environmentally and socially conscious investments.
