Financial Reports & Markets
Market outlook for food packaging in the paper industry
By Ian Lifshitz
By Ian Lifshitz
February 7, 2019 – For years, Styrofoam and plastic have been the industry default for food packaging.
That is quickly changing. As consumers see the obvious harm plastics and Styrofoam are doing to the environment, there is an increasing demand towards alternatives, particularly paper products and the sustainable benefits they can deliver.
That message was forcibly delivered by more than 1,000 Canadians who took part in Asia Pulp and Paper’s annual sustainability study. It found more than two-thirds (71 per cent) of people are placing higher importance on sustainable food packaging than they did five years ago. And most significantly, Canadians now prefer paper disposable products four times as much as plastic and a staggering 10 times as much as Styrofoam. Given this endorsement, the challenge for the paper industry is building on this demand and developing products that exceed the expectations of consumers.
While one must take costs into consideration, there are two factors offsetting this issue. Millennials in particular are starting to show they take concerns over the environment seriously, and this is likely to be an issue when they vote. It is better for the paper industry to be a forefront of change rather than have standards imposed on us. Secondly, the majority of those surveyed say they are willing to pay more for sustainable materials in fast food products. More than half of consumers (56 per cent) say they would be willing to pay an increased price for a better-packaged product, and a third (37 per cent) of those people say they are willing to pay up to 10 per cent more. The paper industry does not need a better incentive for innovation.
With many more people finding it difficult to balance work and home, we are seeing the growth in food delivery services. This is no longer on special occasions – individuals, couples and families are seeking the convenience of deliveries. Younger respondents are most likely to increase the frequency of having food delivered, which is the same group that is most engaged in environmental issues.
With food deliveries set to continue to increase, there is an increased need to offer packaging that is sustainable. Nearly half (48 per cent) of Canadians surveyed consider a company’s sustainability values as important when it comes to selecting a fast food restaurant. The materials used in fast food packaging are now just as important to consumers as the size of the packaging being used. (Too much packaging is seen as wasteful and has been a perennial complaint by Canadians.)
The brands that will have the most success in the marketplace will be those that take the time to understand the core values of consumers and seek the most innovative solutions.
As more Canadians start to make their fast food choices not only on what is in the packaging but also the packaging itself, there is a tremendous opportunity for the paper industry. There has never been a more fortuitous time to deliver what consumers want. PPC
Ian Lifshitz is vice-president of sustainability and stakeholder relations at Asia Pulp & Paper Canada.
This article originally appeared in the Winter 2019 issue of Pulp & Paper Canada. Read the digital edition here.