How are megatrends shaping the plastics industry today?
By Roberto Ribeiro, President, Townsend Solutions
The average person in a developed economy has well over 50 interactions with the plastics industry every single day. From medical equipment to airplanes, plastics are an essential part of our lives – in the pipes delivering our clean drinking water, in the packaging protecting our food and extending its shelf life, or the parts making our cars lighter and more fuel efficient.
Considering the major role played by plastics in supporting quality of life, it is only logical for the industry to be significantly impacted by large transformative global forces. These forces are large in scale, high in impact and are often interdependent. These “megatrends” can span decades and even lifetimes, influencing a wide range of activities, processes and perceptions in society, industry and government. The Arabian Gulf region, like many other regions globally, is also impacted by these major transformations.
“Considering the major role played by plastics in supporting quality of life, it is only logical for the industry to be significantly impacted by large transformative global forces. These forces are large in scale, high in impact and are often interdependent.”
Demographics and social trends
Advances in medicine and healthier lifestyle choices are enabling people to live for longer while remaining active. In 2000, 810 million people were aged 60 or over. In 2050 that number will rise to 2 billion which is almost 22% of the world population.
In less than a decade, people aged 65 and over will start to outnumber children at the age of five and under for the first time in human history. This increase in the numbers of retired people will fuel developments and demand for goods and services linked to older people. This is a tremendous opportunity for healthcare markets in particular, where traditional growth has come largely from material substitution.
The aging population is driving development and innovation from rigid packaging (easy-grip, comfortable lifting of heavier bottles) to outdoor recreation (contoured benches, gardening aids) where new products are helping this generation stay active and comfortable while enjoying the outdoors.
Millennials
Generally defined as the generation born between 1980 and 2000, millennials want different things from products and packaging than the past generation. Often more mindful of sustainability and environmentally conscious, millennials tend to support brands that strive for a higher purpose as well as delivering quality and freshness.
Millennials are driving growing demand for on-the-go formats, like spout pouches for drinking (health-conscious) yogurts, which are convenient for single usage and provide excellent protection against moisture, oxygen and light. This generation is also a large contributor to the rising number of single-person households, another trend which is driving growth for resealable packaging and portable containers.
Changing food tastes
Fueled by a combination of changing demographics and social dynamics, food tastes are also changing. Fat-free, meet gluten-free, dairy-free and preservative-free! Consumers are looking for healthier choices across the board, driving innovation throughout the packaging value chain in areas like:
- Re-sealable packaging / re-closeable spouts
- On-the-go packaging
- Carton and pouch formats to replace BPA-lined cans
- Slider and zipper locks
- Leak proof closures
- Powder/liquid mixing and scoop solutions (shots, supplements)
- Better aesthetics / brand experience
- Reverse labeling (calories in front)
- Flexible multi-layer packaging versus rigid, monomaterial
packaging affecting decision on closure type
“For the first time in history more than half the world’s population resides in cities. The world’s urban population now stands at roughly 3.9 billion people, and this number is expected to reach almost 6.5 billion by 2050.”
Online shopping
Not only is what we eat changing, so is the way we shop. Online shopping and home delivery is becoming more and more popular with both ship-from and ship-to options expanding at a breakneck pace.
As a result, packaging must be optimized to consider evolving transport and storage conditions, opening opportunity for innovation in a variety of applications including caps and bottles, where the package and closure have growing influence on the purchasing decision.
Urbanization
For the first time in history more than half the world’s population resides in cities. The world’s urban population now stands at roughly 3.9 billion people, and this number is expected to reach almost 6.5 billion by 2050.
The trend towards urbanization is accelerating quickly, with the majority occurring in developing countries. This shift brings with it significant opportunities for plastics in applications ranging from agriculture, to building and construction, to retail and grocery.
Environment
Sustainability is a widespread concern, driving attention, investment and growth on a global scale. The adoption of the Paris Agreement in December 2015 set the stage for tremendous change. This is driving widespread investment in reducing the environmental costs and impact of plastics. We are moving from a “make-use-dispose” society to a “make-use-recycle-reuse” society. Undoubtedly one of the key innovations that emerged from Paris was the official recognition of the role played by business, investors, cities and other local entities in driving and delivering climate focused action.
The 4 Rs
In the plastics industry, environmentally focused collaborative initiatives in support of reduce, reuse, recover or recycle (4Rs) are gaining momentum. Across the Atlantic, US plastic resin producers are already taking steps to increase their contribution to sustainability by committing to greater recyclability and recovery of plastics. The American Chemistry Council’s (ACC) Plastics Division in May this year announced three ambitious goals to recycle or recover all plastic packaging used in the United States by 2040 and to further enhance plastic pellet stewardship by 2022.
Specifically, the following goals for capturing, recycling, and recovering plastics were set:
- 100% of plastics packaging is re-used, recycled or recovered by 2040.
- 100% of plastics packaging is recyclable or recoverable by 2030.
- 100% of the US manufacturing sites operated by ACC’s Plastics Division members will participate in Operation Clean Sweep-blue by 2020, with all of their manufacturing sites across North America involved by 2022.
To achieve these goals, plastic resin producers plan to focus on six key areas: designing new products for greater efficiency, recycling and reuse; developing new technologies and systems for collecting, sorting, recycling and recovering materials; making it easier for more consumers to participate in recycling and recovery programs; expanding the types of plastics collected and repurposed; aligning products with key end markets; and expanding awareness that used plastics are valuable resources awaiting their next use.
Led by the Ellen MacArthur Foundation, The New Plastics Economy initiative brings together key stakeholders to rethink and redesign the future of plastics, starting with packaging. With a growing list of “core partners” including key brand owners like Amcor, Danone, Pepsico, Coca-Cola and Unilever and “participants” including producers like Borealis, BASF & DuPont & NatureWorks, the initiative is gaining traction throughout the plastics value chain.
The initiative calls for fundamental redesign and innovation for >30% of plastic packaging by weight. Segments of focus include small format packaging (lids, caps, sachets), multi-material packaging, uncommon plastic packaging materials like PVC, EPS, PS and nutrient contaminated packaging (coffee capsules, takeaway food packaging).