QSR Interview | By Blair Chancey
Who is most interested in using sustainable packaging? Just based on the interest expressed by the foodservice-industry media, it’s a growing segment. We get calls all the time from reporters about sustainable packaging and alternative materials. There is a decided switch to move over to plant-cellulose materials—normal paper cellulose is made from trees. People are interested in that in the media industry. And the media may be a bit ahead of the customers themselves.
Places where it’s of interest continue to be the west coast—California, Oregon, Washington—and college campuses around the country. But even in college campuses, particularly if they’re part of a state’s system, they’re not spending any more money. Imagine being a California public school right now.
But some others are interested. A brand who is trying a new strategy, who is trying to position itself as environmentally sensitive and play up that area to the consumer, it might offer International Paper’s new hot cup. Even in the grocery segment, we’ve seen some meat packaging tray changes. One company in Canada is making the trays out of PLA.
You mentioned New York in 2012, and Starbucks has a similar timeline. Why is 2012 the magic year? It takes at least three years to line everything up. Right now you can’t get any money from anyone and that acts as a big deterrent when trying to do a materials switch. You have to set up the source that goes into making those materials, which is PLA. So that means more corn. Everyone knows that ethanol is coming along, but packaging is another pressure in the marketplace for ethanol. It just takes time to line those things up.
The other aspect is that companies that want to try to have a system where they’re doing in-store collection, sorting, and distribution of the collected materials to a recyclery, the logistics of that also take time. You don’t just walk into a paper mill and say, “Oh, by the way, we’re going to drop 50 truckloads of cups off at your door next week.” You need to have a lot of lead time.
What are your price predictions for the upcoming year? All of the pricing for the basic packaging materials are on a rollercoaster. Paper is cyclical in pricing and as prices rise, plastic resins stay the same and people switch over. Then immediately when oil prices get back up to $110 a barrel, here they come again, switching back to paper. They just go back and forth.
We at the institute, every other year, bring in speakers to our fall meeting to give us the outlook for what to expect in pricing. That’s a bit of a crapshoot because the developments in the rest of the world have a domino effect and cause prices to rise. One thing is linked to another. But in the plastics side of the industry, the price of a barrel of oil is king. You’re dealing with petrochemical materials.
So as oil prices rise, you predict more of a switch to paper and perhaps an increase in price? Last year when we were looking at $140–$150 for a barrel of oil, people were really concerned. And we saw some switching over to the paper segment as a result. It will absorb that for a while, but as it goes through its pricing increases, you’ll see the swing go back in the other direction.
The folks that are able to scope out what the base-materials marketplace is going to be like 12 months from now or have the ability to put materials aside like resins or paperboard, they’ll be able to hedge successfully. Larger companies can do that because they have the resources.
What do you see happening for packaging once the economy fully recovers? This movement toward biodegradable and compostable materials is definitely an established trend. We’ll see that continue. On the plastics side, what you have going on is not so much plastic versus paper but a plastic resin versus another plastic resin or polystyrene versus polypropylene.
Laboratories are fooling around with what other things they can do with polyethylene to make it more competitive in the foodservice packaging marketplace. You have to try to get a share of the market where ever you can grab it.