Drinks Biopackaging Report

zenithinternational

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specialist consultants to the food and drink industries worldwide

Zenith Report Drinks Biopackaging February 2010

STRATEGY & MANAGEMENT  MERGERS & ACQUISITIONS  COMMERCIAL & MARKET  OPERATIONS & TECHNICAL  WATER & GEOTHERMAL  ENVIRONMENT & CARBON  PACKAGING & DISTRIBUTION

Contents Executive summary & introduction

3

Definitions

9

Packaging industry

17

Packaging in the 21st century

18

Plastics

19

Regulation

20

Sustainable packaging

22

Market analysis

26

West Europe & North America volume (2006-2015)

27

West Europe & North America volume growth (2006-2015)

28

West Europe & North America value (2006-2010)

29

West Europe & North America value per litre (2006-2010)

30

Regional bioplastics review

31

Key & feature brands

34

Category drivers & challenges

38

Market drivers

39

Market considerations

41

Š Zenith International Ltd 2010

zenithinternational specialist consultants to the food and drink industries worldwide

Contents Key suppliers

46

‘Compost compromise’

51

Partial/alternative solutions – with examples SWOT, future

52 57

SWOT

58

Outlook and development

61

Specimen brands (21)

© Zenith International Ltd 2010

63

zenithinternational specialist consultants to the food and drink industries worldwide

Drinks biopackaging Definitions The term „biopackaging‟ essentially refers to packaging that is compostable; or packaging that „breaks down‟ when combined with the natural elements oxygen, heat and moisture at a specific humidity, often only achieved in an industrial composting facility as opposed to a domestic compost bin in the garden.

Biopackaging is thus derived from polymers that degrade in the environment, and should result in complete biodegradation so that no residue remains in the environment, i.e. returning to nature what was extracted from nature. Packaging concepts following this principle were termed „cradle to cradle‟ design by Dr Michael Braungart, founder of EPEA Internationale Umweltforschung GmbH in Hamburg (an international scientific research and consultancy institute that improves product quality, utility and environmental performance via eco-effectiveness).

Biopackaging or bioplastics are in themselves a form of plastic. Unlike standard plastic – which comes in many forms and is largely petroleum based – biopackaging uses natural fibres derived from plant sources. Example sources for biopackaging include corn starch, hemp and soy.

© Zenith International Ltd 2010

zenithinternational specialist consultants to the food and drink industries worldwide

Drinks biopackaging Definitions Drilling down into the further detail of bioplastics, these are a new generation of biodegradable and compostable plastics with an important role to play in sustainable packaging. They are made from biodegradable polymers (biopolymers), which are a broad class of polymers effectively produced from living organisms. They may either be naturally produced or synthesised. Natural bioplastics are primarily made from natural, renewable feedstocks, such as starch and cellulose, which come from agricultural crops (i.e. corn, potatoes and wheat straw).

Since bioplastics are usually made from agricultural crops, they are based on resources that are annually renewable and cause little significant damage to the environment during production. At present, corn starch is the main raw material being used in the manufacture of bioplastic resins. Other resins made from potato starch, soybean protein and cellulose are also being developed. Conventional plastics, on the other hand, are polymers made from synthetic feedstocks based on non-renewable resources such as petro-chemicals.

Bioplastics are not only sustainable but should also be carbon neutral. This does not mean that they do not release CO2, but that that they may have the potential to reduce CO2 quantities in the atmosphere and cut carbon emissions. When a bioplastic degrades, the CO2 produced can effectively be reabsorbed by the crops that are grown to replace it. Thus, any potential harm caused by initial carbon emissions is neutralised.

Another key feature is that bioplastics are biodegradable and some may be compostable. Biodegradable bioplastics break down into CO2, biomass and water as a result of naturally occurring microorganisms.

Compostable bioplastics differ from biodegradable ones in that they must be broken down in commercial or domestic compost heaps within a given period, leaving behind no toxic traces. In contrast to these, degradable plastics may degrade as a result of non-naturally occurring microorganisms, with no regulation concerning time frame or toxic residue. Š Zenith International Ltd 2010

zenithinternational specialist consultants to the food and drink industries worldwide

Drinks biopackaging Market volume growth, 2006-10 Volume (mln litres)

2006

2007

2008

2009

2010e

2011f

2012f

2013f

2014f

2015f

TOTAL West Europe UK Germany Italy Others North America US Canada

Commentary

Š Zenith International Ltd 2010

zenithinternational specialist consultants to the food and drink industries worldwide

Specimen brands Aquamantra Manufacturer: Aquamantra Natural Spring Water Company information: Situated in California, Aquamantra bottles a range of spring water „mantras‟ infused with energies to promote positive thinking. Unveiled in 2006, the waters were developed in consultation with Dr Masaru Emoto, a scientist who investigated and proposed that thoughts and words written on a bottled water‟s packaging may affect the molecular structure of the water inside.

According to the company, “Information travels on waves of energy.

The affirmations are the information and the water is the energy” Packaging information: In July 2009, Aquamantra introduced what it claimed was the world‟s first 100% biodegradable, recyclable and compostable (non-PLA) bottle, developed by ENSO LLC. Made from FDA-approved PET, the bottles will break down within 1-5 years into inert biomass and biogas through either anaerobic or aerobic decomposition.

Product information: Positioned as a four-strong range of premium natural spring waters, Aquamantra‟s offering comprises the following variants: I Am Healthy; I Am Loved; I Am Lucky and I Am Grateful.

Distribution: Primarily through online ordering at Aquamantra‟s website, with product shipped throughout the US. Price: Approx US$1.75 - US$2.50 per bottle © Zenith International Ltd 2010

zenithinternational specialist consultants to the food and drink industries worldwide

zenithinternational specialist consultants to the food and drink industries worldwide

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STRATEGY & MANAGEMENT  MERGERS & ACQUISITIONS  COMMERCIAL & MARKET  OPERATIONS & TECHNICAL  WATER & GEOTHERMAL  ENVIRONMENT & CARBON  PACKAGING & DISTRIBUTION