Packaged To Be Different
By ELIZABETH FUHRMAN
Package material and shape matters for every beverage
containers are strengthening their grip on the packaging market. While
metal beverage cans are still the leader in the U.S. market, with volume at
about 92.3 billion units, plastic is gaining ground and is expected to see
volume results of more than 53.6 billion units in 2005, reports Euromonitor
International, Chicago. Glass follows with volume at about 26.6 billion
units, along with flexible packaging at 6.5 billion units, liquid cartons
at 2.3 billion units and paper-based containers at 1.3 billion units.
PET is pushing beyond just carbonated soft drink
bottles, which still accounted for 27.5 billion containers in North
America, up more than 1 percent from 2004, according to Citigroup’s Global Beverage Packaging report.
In 2004, total North American resin usage from bottled water, isotonics,
fruit juices, alcohol, other beverages and food exceeded 4 billion pounds,
which is more than double the total soft drink category.
While plastic containers made gains due to their light
weight, transparency and versatility, the trend toward premium products
– whether they be imported beers or bottled water – tends to
favor glass. Glass containers make up just less than 4 percent, or $4
billion, of the total $105 billion-plus U.S. packaging industry. The United
States is the second-largest global glass container market (following
Western Europe), with annual capacity of about 9.5 million tons produced at
50 U.S. glass bottle facilities. A decade ago, Citigroup estimates the U.S.
market had total capacity of more than 11 million tons produced at 66
plants. The overall U.S. glass packaging market has continued to shrink at
the hands of PET, but manufacturers such as high-end microbreweries that
use glass exclusively have contributed to overall demand.
For cans, the United States is the world’s
largest market, with slightly less than 100 billion beverage cans shipped
in 2005, Citigroup reports. The U.S. beverage can market’s annual
capacity has shrunk 5 percent since 1995, but energy drinks are helping to
capture some growth. With conversions from traditional 12-ounce cans to
higher-margin alternative cans, such as 16-, 18- and 24-ounce cans in
energy and other specialty drinks categories, the demand for non-12-ounce
cans increased 10 percent in 2005, Citigroup reports. While major U.S.
producers including Ball Corp., Rexam, Crown, CCL and Exal have all
converted lines to larger sizes, 12-ounce cans still make up 90 percent of
all domestic aluminum beverage cans.
For the different beverage categories, Citigroup
estimates that aluminum cans made up 54 percent of the total packaged beer
market in 2005, up slightly from 2004. Glass bottles accounted for 43
percent, with the remainder split between plastic bottles and other
materials. As domestic brewers try to regain cachet, more specialty
packages like 8-ounce slim cans and aluminum bottles are being introduced.
Citigroup also expects glass to continue to gain share at the expense of
cans as a result of new imports and brewers introducing innovations in
glass bottles. More brewers are likely to launch new products in glass or
draught in order to maintain a premium image.
In carbonated soft drinks, aluminum cans represented
41 percent of the total packaged market in 2005. Plastic PET containers
accounted for 35 percent, with a small amount in glass bottles. Citigroup
anticipates that PET will capture more carbonated soft drink volume since
the soft drink industry is trying to enhance margins via packaging
innovation and by converting consumers to single-serve packaging.
Packaging and beverages are intertwined for a couple
reasons. For bottlers and manufacturers, packaging represents 40 to 45
percent of the cost of goods sold. But from a revenue perspective, new
packaging can raise the image of a brand or lead to volume growth.
Essential raw materials for all three major beverage
packaging types – metal cans (aluminum), glass bottles (natural gas)
and plastic bottles (PET) substantially increased during the past two
years, Citigroup reports, and it expects that to translate into higher
costs for bottlers and beverage companies this year. Aluminum prices passed
17-year highs, and Citigroup Investment Research’s global metals and
mining team recently raised its full-year 2006 and 2007 price forecasts.
The long-enduring aluminum price cap also is being phased out, increasing
pricing demands on can-makers and their customers. As well, major glass
bottle producers have been aggressively escalating prices due to growing
energy and raw material costs.
|U.S. beverage packaging use
(Volume in millions of units)
|Metal beverage cans|
|Rigid plastic bottles|
|Flavored alcohol beverages||22.1
|Flavored alcohol beverages||1,146.2
|Flavored alcohol beverages||2.2
|Source: Euromonitor International, Chicago, 2006
In contrast, the significant schedule of new PET resin
expected to enter the global market in the next three years – more
than 10 percent per year – will moderate cost pressures for PET
bottle-makers and their customers. Given cost outlooks, Citigroup suggests
that PET bottle-makers could see opportunities to benefit from substitution
to PET in select beverage categories.
Innovations in packaging
PET is a leading material when it comes to innovations
in bottle shape and design. But as with most materials, drawbacks to PET
exist such as exposure to ultraviolet light that can degrade flavors,
colors and vitamins. Eastman Chemical Co., Kingsport, Tenn., developed
Vitiva PET for clear packaging of beverages to protect against such
“Beverage companies make significant investments
in developing the ideal balance of ingredients for their signature
formulations,” says Lavonna Buehrig, North American business market
manager for polymers at Eastman. “Vitiva’s FDA-approved UV
absorber protects some of the most popular ingredients used in beverage
Vitiva PET contains a UV absorber bound directly to
the polymer chain, and is not an additive, so manufacturers do not have to
worry about leaching. The product blocks UV light up to 370 nanometers. Studies at Eastman on
sports beverages and fruit juices show that colorants such as Red #40 begin
to degrade after a few hours in the sun or under a UV lamp. Vitamins C and
B6, among others, also show a decrease in their efficacy after short UV
exposure. Products with 370 nanometers of UV protection remained undamaged
even after prolonged exposure to direct sunlight.
“Any change in the product flavor or color can
have a detrimental effect on sales and lessen customer loyalty,”
PET also offers beverage manufacturers the ability to
differentiate via the bottle instead of just the label. Non-carbonated PET
packaging is growing rapidly because of this as well as its ability to
withstand hot-fill and cold-fill aseptic processes, says Stewart Leslie,
president of 4sight Inc. Working with the functionality of PET instead of
against it, manufacturers can “let the bottle be the brand instead of
the label,” he says.
For example, the new grip on a global Gatorade bottle
takes care of the give and take of hot fill and cooling. 4sight embossed
and debossed the Gatorade name and lightening bolt logo into the recessed
grip areas of the bottle along with an oval shape that resembles a
football. Creating a tall, slender lightweight package, 4sight changed the
feel and grip using contours and finger depressions. The company produced a
similar branded bottle for Propel that depicts the brand’s focus of
being an aerobic fitness water.
“In non-carbonated, hot-fill manufacturing is
really pushing the envelope for finding and inventing new bottle types,
instead of crunching under the technical challenges, embracing them and
using them to be innovative,” Stewart says. “You get such a
strong ownership. Typically with a bottle you’ll get a design patent
and somebody can knock you off. But because these new innovations are tied
to functionality they are held with strong utility patents, so its very
difficult for someone to come along and do the same thing you did.”
For Pepsi-Cola North America’s MDX launch, the
carbonated segment also stepped up its innovation with 4sight creating a
bridge in packaging between the energy drink and carbonated soft drink
markets. In 4sights’ research, consumers associated energy drinks
with a tall, skinny can and soft drinks automatically came to mind with a
20-ounce capped bottle. 4sight, in turn, created a 14-ounce bottle that is
narrower in diameter than a soft drink with the hand-feel and grip of an
energy drink and waves on the bottle that communicate energy.
Graham Packaging Co., York, Pa., also created a new
PET plastic container for S. Martinelli & Co.’s resdesigned and
improved plastic version of its trademark 10-ounce, apple-shaped glass
juice bottle. Martinelli wanted to maintain the container’s brand
identity, but recognized the portability opportunities that a plastic
container would bring. Graham Packaging created a panel-less, label-free
container with barrier properties that could be processed on hot-fill
equipment, says Paul Young, vice president and general manager of the PET
business unit for Graham Packaging. The
challenge was to maintain the shape of the bottle when the contents cooled
after being hot-filled.
“We solved it by using liquid nitrogen
‘dosing’ in the head space,” explains Charles Simpson,
senior product development engineer for Graham Packaging. “When the
bottle is filled and heated, the liquid nitrogen expands as it becomes a
harmless, inert gas that then counteracts the normal volume reduction
Adding liquid nitrogen flushed out the oxygen,
improving the juice’s shelf life as well.
Nestlé Waters North America also reshaped a
beverage option for kids with the launch of Aquapod. Round-shaped and
targeted at kids aged 6 to 12, the bottle contains 11 ounces of spring
water. Even with the growth of the bottled water category and the number of
children drinking bottled water, no product was specifically targeted at
them, says Mike Pengue, director of innovation at Nestlé Waters
“Aquapod bottle is something that kids will get
excited about,” Pengue says. “It’s something that is for
them and not their mom or dad’s half-liter of Poland Spring. Through
our research, they want healthy refreshing beverages, and spring water is
continuing to fill that need, but they want it in a bottle that is fun and
specific for them.”
With Aquapod’s shape, look and feel, the bottle
is something that Nestlé Waters thinks is iconic and clearly
extendable, Pengue adds.
Packaging design is still a driver of new products in
aluminum as well. Last year, CCL Container, Hermitage, Pa., introduced the
first American-made aluminum crown beer bottle for Pittsburgh Brewing
Co.’s Iron City beer. This year, CCL created an aluminum bottle for
Froster’s Crown Lager in the Australian marketplace.
“Foster’s considered other on-premise
package options … but ultimately decided that aluminum bottles
offered the unique shape, upscale look and distinct style that would
enhance the premium image of Crown Lager,” says Ed Martin, CCL
Container’s vice president of sales and marketing.
For CCL’s next generation of aluminum bottles,
the company is launching Aluminex – a technology that allows a
manufacturer to shape the entire length of the bottle to within about 20
mm. of the bottom, Martin says. “That’s a significant
improvement as far as designability of the bottle vs. what the first
generation products were,” he explains. “The first generation
products could only shape the upper third of the bottle, which would create
a relatively short neck. The new bottle designs will be about using the
full capabilities of this technology.”
Another trend playing out in aluminum is
manufacturers’ use of black light sensitive inks on their bottles.
“It’s a whole trend of making things new and different for
on-premise,” Martin explains. “The on-premise environment is
also a place where the consumer isn’t going to be price sensitive, so
you’re able to do some different things.”
Aseptic packaging now has a high-barrier, clear
aseptic stand-up pouch in Tetra Wedge Aseptic Clear from Tetra Wedge. The
transparent, squeezable package launched last year in Mexico, where Jumex
rolled out Mundo Nautix. The package was designed with smooth sides and no
sharp edges like current commercial stand-up pouches, and its slim 200-ml.
design allows small hands to easily handle the product. Tetra Pak is
extending the introduction of the Tetra Wedge Aseptic Clear in select
global markets this year, with full commercial availability scheduled for
the end of 2007.
Tetra Pak also created a Tetra Prisma being used by
Trinchero Family Estates, St. Helena, Calif., for its Three Thieves brand.
Extending its offerings with Bandit Cabernet and Bandit California Pinot
Grigio in a single-serve 250-ml. four-pack. Each 250-ml. mini-box –
dubbed a “Bullet” – contains one-third more than the wine
industry standard for single-serve portions and is sealed with a pull tab.
Ideal for outings, the Bandit Bullets allow consumers to enjoy a glass of
wine without opening an entire bottle.
Just by tweaking the delivery system of a conventional
tea bag, Ineeka Inc., Chicago, rolled out an innovative new product.
Organically certified Ineeka tea sparked creative packaging in the tea bag
world with a single-serve, pre-packaged infuser with tabs that spread open
and wrap around the edge of a cup to allow the loose leaves to unfurl
completely, expressing the nuances of natural flavors and aromas. Available
in seven varieties, the unique tea delivery
systems are conveniently packaged for consumption by the cup. The
disposable infusing bag eliminates the need for pots, strainers and cleanup
associated with brewing whole-leaf teas. BI