Flexible Packaging Today and Tomorrow

Steve DeSpain

Vice President

Reifenhauser Incorporated

Steve.despain@reifenhauser.com

+1 847 669 9972

Today we are the largest extrusion system

manufacturer with a clear focus on this market.

Cast, sheet and extrusion coating linesBlown film lines

Nonwoven lines Components for customized lines

Core Business

Blown Film and Cast, Sheet Coating

Picture: Courtesy of LyondellBasell

Agricultural films

Consumer packaging Hygiene applications

Industrial packaging

U.S. Packaging Market

Flexible Packaging Second-Largest Packaging

Segment

▪ According to the 2018 State of the

Flexible Packaging Industry Report,

flexibles make up about 19% of the

packaging industry in the United

States—the 2nd-largest segment of

a $167 billion industry.

US Flexible Packaging to Reach $392 Billion by 2023

• Convenient packaging, excellent barrier properties, and sustainable

materials are all factors contributing to the continued growth of flexible

packaging in the coming years.

• Various end-user industries such as food & beverage, healthcare, cosmetic

& toiletries, and “others” (oil & lubricants, household products, agricultural

products, and sporting goods) have increased demand for flexible

packaging in recent years.

• In the United States, flexible packaging currently accounts for 19% of the

packaging market – second only to corrugated paper – and is expected to

have a growth rate of 3.9% CAGR and a value of $392 billion by 2023.

• The US food industry is the largest segment for flexible packaging. It was

an early adopter because of the convenience of packaging ready-to-eat

foods, snacks, cake mixes and frozen meals.

Source: PMMI business intelligence: Flexible Packaging Market Assessment 2019

US Flexible Packaging to Reach $392 Billion by 2023

▪ Baby food and processed fruit and vegetables are expected to exceed

average industry growth rates, due to convenience factors such as

innovative slider closures, fitments and pouch packaging for baby food,

and retort packaging for processed fruit and vegetables.

▪ Beverage and pharma are also seeing strong growth in certain areas.

Pouches have experienced the greatest growth within beverages as

consumers seek value and convenience, while rising demand for reduced

waste, shipping-friendly packaging, and greater product protection

characteristics drive medical/pharma growth.

▪ The emergence of sustainable and consumer-friendly packages has

propelled the growth of the flexible packaging market. Manufacturers are

shifting towards flexible packaging to produce less waste (due to lower

consumption of raw materials) and to take advantage of flexible

packaging’s excellent barrier properties.

Source: PMMI business intelligence: Flexible Packaging Market Assessment 2019

Global Growth

Industry Trends Impacting Flexible Packaging

▪ Rapid Adoption of Stand-Up Pouches

– The fastest growing segment of flexible packaging is stand-up pouches an

ideal solution for a variety of product types and industries.

– Pouches are on pace to grow 7-9% annually over the next 4-5 years

– They are durable and travel very well, resealable zippers keep products fresh.

– They print well with a near endless array of design options.

– They’re helpful for portion control and supporting a healthy lifestyle.

▪ Sustainability

– Eco-consciousness isn’t optional anymore, and consumers demand

responsible company practices and sustainable products and packaging.

Flexible packaging produces drastically less waste, and can even be made

with recyclable or compostable materials.

– Consumer demand for responsible practices by manufacturers is at an all-

time high, with more than 9 out of 10 consumers expecting it.

– Consumers are putting their money where their mouth is, as nearly 70% will

pay more to support sustainability.

Industry Trends Impacting Flexible Packaging

▪ E-commerce

– Shopping online for food and pantry items has

exploded in recent years, resulting in significantly

more (and more frequent) residential deliveries of

items that buyers used to only pick up at local stores.

– Flexible packaging can dramatically reduce shipping

weight and even increased the amount of product(s)

that can be shipped within the same volume

▪ The Demand for Convenience

– Our on-the-go society doesn’t have time (or patience)

for anything that complicates life.

– The end goal is to enjoy and benefit from the product

they’re using or consuming, and the demand for

everything about how that product is delivered (from

shipping to buying and transporting home to opening

and storing) must fall in line with that goal—and not

cause frustration.

Industry Trends Impacting Flexible Packaging

▪ Personalization and Short Print Runs

– “Flexible” doesn’t just describe the

physical makeup of the packaging but

also how agile flexible packaging

production can be to meet the needs of

a variety of industries and the demands

of customers. Small niche markets can

take advantage of economical short

print runs, and digital printing makes

customized and personalized designs

possible.

Pouch Growth

▪ The flexible packaging market is segmented into

aluminum, pouch (either stand-up or lie flat), blister

and strip packs, plastics, and paper.

▪ The plastic pouch segment is expected to grow 20%

by 2022, followed closely by stand-up pouches (19%).

▪ Pillow pouch and stand-up pouches are flexible, easy

to carry, and light weight, and advances in pouch

characteristics (e.g., resealable closures, spouts and

tear notches)

▪ Pouch manufacturing technology (e.g., machinery

with increased line speeds) will continue to lower

production costs, making pouches more competitive

with other forms of packaging, like cartons and cans.

Pouch Growth

▪ Pillow Pouch Growth

– Versatility in design that can easily accommodate

liquid, solid, and powder products.

– Rising dairy consumption (e.g., milk, curd, yogurt,

and cream products) as well as processed food and

beverage industry.

– Rising shipments of packaged food products,

particularly from developing markets in the

Asia/Pacific region.

▪ Stand-up Pouch Growth

– Expanding consumption of food & beverage, dairy,

and cosmetics products.

– Rising consumption of over-the-counter products

in the healthcare industry.

World Flexible Packaging Market

2018 Total $86 Billion

COUNTRY /

REGION

% Flexible

Packaging

Market

Population in

Millions

% World

Population

Per Capita

Consumption in

US $

Europe 17 742 10 19.70

N America 29 363 5 69.09

Total-Developed

Countries46 1103 15 35.87

C & S America 6 648 9 7.99

Asia Pacific 43 4545 60 8.14

Africa / Middle East 5 1256 16 3.42

Total-Developing

Countries54 6447 85 7.20

Source: PCI Wood Mackenzie estimates per Flexible Packaging Europe Presentation at 2018 FPA Annual Meeting, Population Reference

Bureau and Flexible Packaging Association

Packaging as Part of the Lifecycle of Food

Production

Process

Preparation and consumption

Raw Material Packaging

How product packaging affects buying decisions

▪ 60-70% of buying decisions are made in the store.

▪ On-spot decision making about choosing among alternatives is

influenced by product perceptions (through the packaging design)

▪ Packaging is directly related to the quality of the product. It also

affects whether a product is noticed on the shelf.

The Global Middle Class and Global

Flexible Packaging

▪ 1.8 Billion People in the Middle Class

▪ 3.2 Billion Expected by 2020

▪ 4.9 Billion Expected by 2030

▪ 66% of Global Middle Class Represented by Asia

▪ 1 Billion Chinese as Part of Middle Class by 2030

By The Numbers

Source: FPA

How packaging trends develop in emerging

markets?

1. Growth of modern retail and pre-packed food go

hand in hand

- Need for flexible packaging

- Scalability in sizes starting from single-use

- Cost and distribution efficiency

- Low-cost protective packaging from recycled

materials

2. Food-to-go grows with average disposable income

- Need for foodservice packaging

Sustainable packaging helps customers meet their

goals

– The main environmental

function of packaging is to

protect food product from

getting spoiled

– To reduce resource usage

and food waste

– To lower health risks

– To improve economic

efficiency

– Need to innovate and renew

packaging – Taking weight out

from the packaging

– Introducing new, renewable

materials

– Making recyclability easier

– This is more and more important as

more people live further away from

the places where food is being

produced

| 20

Circular economy

→ recycling and reuse plastic materials

→ reduce plastic waste in natural systems

→ decouple plastics from fossil feedstock

Environmental Impacts of Biopolymers

• Biopolymers are biodegradable, and some are also compostable.

• Some biopolymers are biodegradable; they are broken down into

CO2

and water by microorganisms.

• Some of these biodegradable biopolymers are compostable; they can

be put into an industrial composting process and will break down by

90% within six months.

• Biopolymers that do this can be marked with a 'compostable'

symbol, under US Standard ASTM D6400 or European Standard EN

13432 (2000).

• Packaging marked with these symbols can be put into industrial

composting processes and will break down within six months or

less.

Compostable Bio-Plastics

Certified compostability

Specifications with Pass/Fail Criteria

BNQ

Canada

ASTM D 6400D6868

USA

EN 13432

Europe

GreenPla

Japan

Polymer Types

Characterization of Biopolymers

• Biopolymers are much more versatile than conventional polymers.

• Chemists follow a huge number of different process routes for production.

• A large number of chemical groups results in a variety of properties.

Biopolymers characterized by their origin:

Category 1: Polymers extracted from biomass

cellulose, potato starch, corn starch

(hydrophilic, crystalline, excellent barrier properties)

Category 2: Classical chemical synthesis

from renewable bio based monomers

(PLA = PolyLactic Acid)

Category 3: Produced from micro-organisms (fungi / bacteria)

(PHA = Poly-Hydroxy-Alkanoates)

Environmental Impacts of Biopolymers

• Consumes less energy, fewer

natural resources

• Generates less CO2

emissions

• Results in higher package to

product ratio

• Requires fewer trucks to

transport, using less fuel and

creating less emissions

• Provides consumer conveniences

• Extended shelf life

• Easy storage

• Reclosability

• Microwaveable

Source: Sustainable Packaging Coalition “Lifecycle Approach to Sustainability”

Applications - Examples

Source: www.european-bioplastics.org

Service Packaging

Important Issues producing bio materials

• Change of process = from HDPE long neck to short neck

• Low temperature compared to HDPE and LDPE

• Bubble stability and how to increase productivity and

quality

• Steam / Odor control

Improvements Through Stretching

• Down gauging 10 to 5µm

stretched bio films (cooled

screw and dual layer die)

• Stretching biofilm gives higher

strength and stiffness

• Improved conversion of the film

• Film thicknesses that are

extremely difficult to be

obtained using conventional

methods

• More conventional feel (tactile

response and touch preference)

Biodegradable plastic: The unintended

consequences

▪ In an effort to reduce plastic pollution, many

governments have outlawed conventional plastic bags,

allowing only the use and production of biodegradable”

bags. Nonetheless, to limit leakage and damage to the

environment, the presence of sound waste

management systems are as relevant for the so called

bio-degradable options as for fossil fuel based plastics.

Often “biodegradable” plastic items (including single-

use plastic bags and containers) break down

completely only if exposed to prolonged high

temperatures above 50°C (122°F). Such conditions are

met in incineration plants, but very rarely in the

environment. Therefore, even bioplastics derived from

renewable sources do not automatically degrade in the

environment and especially not in the ocean.

Trends That Make It Easier to Recycle Plastic

Packaging

Metal (steel) is currently the most recycled material however plastic is

forecast to show the highest levels of growth to 2023, with 19-24% of

plastic being collected and reused. Other materials such as paper and glass

have relativity high collection rates but show signs of little growth.

Trends That Make It Easier to Recycle Plastic

Packaging

▪ Manufacturers, brand owners and retailers are now looking to shift toward

a circular economy in which no material is wasted, but is used multiple

times.

▪ The circular economy and climate change

– Before recycling became popular, packaging waste was traditionally

buried in landfill sites or incinerated

– A shift is beginning from a linear ‘take, make, waste’ economy – where

materials are used just once before disposal – to a circular one, which

minimizes the use of raw materials, energy and water and reprocesses

materials into new products rather than simply throwing them away.

▪ Legislation and recycling targets

▪ Voluntary agreements

▪ Environmental campaigning

Circular economy

Consequences for Blown Film

▪ Mono-Material Packaging

– Pouches: Pure PE or Pure PP

– Barrier: No PA, EVOH in small amounts

▪ Recipes

– Five instead of three-layers in order to

incorporate recycled resin

▪ Machine Technology

– Stretching will become more important

for mechanical properties

Why is Reifenhäuser

integrating the MDO

into the haul-off?

| 34

The more amorphous

the film, the more

efficient is stretching!

Pure PE pouch for easy recycling

100 % PE

100 % PE

Film stretched 110 µm -> 20 µm

100 % PE

100 % PE

100 % PE

Easy to use, hard to destroy

▪ Plastics make products lighter, cheaper,

easier to assemble and more disposable.

They also generate waste, both at the start

and end of their life cycles

▪ The biggest domestic use by far for plastic

resin is packaging (34 percent in 2017),

followed by consumer and institutional

goods (20 percent) and construction (17

percent).

▪ Less than 10 percent of discarded plastics

entered the recycling stream in the United

States in 2015, compared with 39.1 percent

in the European Union and 22 percent in

China. Fifteen percent of U.S. plastic waste

is burned in waste-to-energy facilities. The

remaining 75 percent goes to landfills.

These figures do not include any dumping

or illegal disposal.

As Costs Skyrocket, More U.S. Cities Stop Recycling

▪ With China no longer accepting used plastic and

paper, communities are facing steep collection

bills, forcing them to end their programs or burn

or bury more waste.

▪ Recycling, for decades an almost reflexive effort

by American households and businesses to

reduce waste and help the environment, is

collapsing in many parts of the country

▪ With fewer buyers, recycling companies are

recouping their lost profits by charging cities

more, in some cases four times what they

charged last year.

▪ Recycling had been one of the least lucrative

parts of their business, trailing hauling and

landfills. Many waste companies had historically

viewed recycling as a “loss leader,” offering the

service largely to win over a municipality’s

garbage business.

Things to think about

▪ The U.S. reliance on single-stream recycling

systems, in which all recyclables are placed in

the same receptacle do not work. This approach

is easier for consumers but produces a mixed

stream of materials that is difficult and

expensive to sort and clean at recycling

facilities. The entire infrastructure is not setup

today to efficiently handle flexible packaging.

• Be smarter on packaging use and design

Things to think about

▪ For all the benefits and advantages that

flexible packaging has to offer, these

same attributes contribute to

the difficulty in the recycling stream.

▪ The entire infrastructure is not setup today

to efficiently handle flexible packaging.

–MRF’s do not want it

–Consumers are confused on what to

do with it (mixed messages)

–Amazon shipping bag

▪ Is “incineration for generation” the answer?

–Waste to energy

▪ Government imposed fees/taxes the way

to go?

Plastic Mismanagement: the future cost

Source: UNEP (2018). SINGLE-USE PLASTICS: A Roadmap for Sustainability

Disposable carryout bags (DCB).

▪ An increasingly popular environmental policy has been the

regulation of disposable carryout bags (DCB).

– Approximately 242 local governments in the U.S. adopted

DCB policies between 2007 and 2016, across 20 states and

the District of Columbia

– Most DCB policies in the U.S. prohibit retail food stores

from providing customers with thin plastic carryout bags at

checkout and require stores to charge a minimum fee for

paper and other reusable carryout bags.

– However, all remaining types of disposable bags are left

unregulated (e.g., trash bags and waste bin liners).

– Given DCBs can be reused as trash bags before they are

disposed, this asks the question: Do bans on plastic

carryout bags cause consumers to increase their purchases

of unregulated plastic trash bags?

Source: Elsevier Inc.

Disposable carryout bags (DCB).

▪ In California, the elimination of 40 million pounds of plastic carryout bags is

offset by a 12 million pound increase in trash bag purchases—with small,

medium, and tall trash bag sales increasing by120%, 64%, and 6%,

respectively. In addition 12–22% of plastic carryout bags were reused as

trash bags pre-regulation and show bag bans shift consumers towards fewer

but heavier bags.

▪ With a substantial proportion of carryout bags already reused in a way that

avoided the manufacture and purchase of another plastic bag, policy

evaluations that ignore leakage effects overstate the regulation’s welfare

gains.

▪ According to a UK Environmental Agency (2011) study, a shopper needs to

reuse a cotton carryout bag 131 times to have the same global warming

potential (measured in kilograms of CO2 equivalent) as plastic carryout bags

with zero reuse, while that same cotton bag needs to be reused 327 times if

all plastic carryout bags are reused as bin liners.

Increase in Retail Trash Bag Sales

Disposable carryout bags (DCB). Not all is rosy!

▪ Plastic carryout bags are particularly

problematic because they are lightweight

and aerodynamic, which make it easy for

them to blow out of waste streams (even

when properly disposed of) and into the

environment and waterways.

▪ While plastic bags and films represent only

2.2% of the total waste stream (CA Senate

Rules Committee, 2014), plastic carryout

bags and other plastic bags are the eighth

and sixth most common item found in

coastal cleanups

▪ Once in waterways, plastic bags do not

biodegrade, but instead break into smaller

pieces, which can be consumed by fish,

turtles, and whales that mistake them for

food

The controversy of reusable bags

▪ There are many types of reusable bags

available on the market. They are often

produced using different materials that are

heavier and durable to give the bag added

strength.

▪ More environmentally friendly than traditional

single-use plastic bags?

▪ Depending on their composition, reusable

bags might have to be deconstructed in the

recycling process to separate the different

materials.

▪ In many cases reusable bags are not recycled.

This means that millions of reusable bags,

currently displacing conventional plastic

shopping bags, will end up in landfills at the

end of their useful life.

Source: Controversy and recyclability, 2011

Food for Thought

▪ Reusable bags will not abolish the need for conventional plastic

bags for household waste and unexpected purchases

▪ Conventional plastic bags, although designed to be single-use,

can be multi-purpose and used as carry bags but also for

instance, to manage household waste or pet waste. In Canada for

instance, like in several countries around the world, many people

re- use the conventional plastic bags beyond the one time that

they serve to transport groceries home from the supermarket.

The Grocery Bag Controversy, Silverhill Institute for Environmental Research and Conservation, July 2011.

FEEDING THE WORLD

▪ The United Nations estimates that 25,000

people all over the world die from malnutrition

and related causes every day. And nearly 1

billion of the world’s 7 billion people go to bed

hungry.

▪ Food Access: We produce more than enough

food to feed the planet today, yet hundreds of

millions starve while others struggle with obesity

and nutritional imbalance.

▪ Food Safety: Even with significant advances in

technology and distribution, food contamination

is still a large problem with fatal consequences.

▪ Food Waste: We throw away billions of tons of

food a year that rot in landfills and release

methane gas into the atmosphere.

Food Waste and How Packaging Helps

▪ Imagine for a moment all the time, energy, and resources involved in

growing, protecting, delivering, preparing, and serving our food. And then

imagine simply throwing away up to 40 percent of it. And then think

about the accompanying impact on the environment (not to mention the

people who need it).

▪ Packaged fresh goods have a smaller environmental footprint than

unpackaged food (even if the packaging is not recycled)

▪ Packaging prevents food spoilage, ensures food quality and safety along

the supply chain and at home.

▪ Increases shelf-life and provides portion sizes answering the multiple

needs of consumer lifestyles and demographic changes.

▪ Even though more packaging is being used, less food is being wasted,

leading to a lower overall carbon footprint.

Plastic Packaging’s Role

▪ Plastic packaging’s inherent characteristics, lightweight yet tough, result

in a lighter environmental footprint than alternatives.

▪ Ultrathin plastic film helps block transmission of oxygen, increasing shelf

life of fresh meats to 21 days or more, and plastic vacuum packaging

prevents discoloration of meats and extends shelf life 10 times longer

than store-wrapped meat, resulting in 75 percent less food waste.

▪ “Active” plastic packaging can help preserve food freshness by various

means, such as capturing a reduced-oxygen air mixture in the package,

controlling the exchange of oxygen and carbon dioxide, and incorporating

antimicrobials.

▪ Factory sealed plastic containers and bags help preserve the flavor,

texture, and nutrients of food by locking out air, preventing absorption of

nasty odors and flavors, and averting “freezer burn,” all of which lead to

food waste.

Plastic Packaging’s Role

▪ Why on earth wrap a cucumber or an

apple in plastic film? Because it can

greatly increase shelf life to help reduce

food waste.

▪ And think about it: can you even imagine

life without airtight plastic zipper bags? A

go-to packaging for keeping leftovers

fresh.

▪ So as we work to prevent wasted food, to

save money or to help the environment,

let’s remember how plastic packaging

actually can help us do both. Plastic

packaging actually can be part of the

solution.

Better Shelf Life

Conclusion

▪ The U.S. demand for produce packaging is forecast to increase 3.3% per

year to $5.7 billion in 2019

▪ Plastic containers will experience the fastest gains among major produce

packaging types.

▪ Although bag and liner demand is expected to increase at a slightly faster

pace than the overall produce packaging average, faster growth will occur

for breathable bags in fresh-cut produce uses.

▪ Heightened demand is anticipated for pouches, which, in addition to being

less expensive than rigid containers, are valued for being display-ready and

offering good aesthetics

▪ Machinery, materials, and people will need to keep pace and adapt to grow

with these trends.

▪ Spread the word on the good things plastics are used for and don’t believe

everything you hear!

Source: “Produce Packaging” from The Freedonia Group.