Beverage Industry’s 2007 Packaging Survey
By CATHERINE PENN
Processors consider package variety an investment for
What accounts for 30
percent of the cost of a drink? Yes, packaging — but that word
includes many aspects. For example, consider shape, the choice between
bottle or can, the closures, labels and secondary packaging materials, as
well as the “green” issue and sustainability concerns.
Beverage Packaging Survey investigates why specific packages are popular
and which materials complement certain drinks. The survey discusses what is
important for packages at retail, as well as how and why beverage packaging
materials will evolve during the next five years. This study shows the
extent to which beverage processors are incorporating sustainability into
their packaging. Also, the report’s analysis of motives and drivers
for increasing use of certain packaging materials vs. others offers
processors the opportunity to consider their direction in comparison to the
industry’s general direction during the next five years.
It’s a slam-dunk for PET. Nine of 10 soft drink manufacturers, juice processors and water bottlers will
increase the amount of PET they use during the next five years. It does not
seem to matter that 75 percent experienced a price hike for PET this year
compared to 2006. One of the main drivers for using more PET is consumer
preference. PET is seen as a trendy alternative to aluminum cans.
“The product volume growth will continue and PET is the package of
choice,” verifies a juice processor.
“PET packaging is becoming more popular because
of the ability to reseal,” says a marketer. The “potential cost
savings for freight and convenience to consumers,” motivates a winery
respondent to look at PET. We’re “moving out of cans in vending
wherever possible — better economics,” explains a soft drink
Alcohol beverages seem to present best in glass, but
PET is a strong alternative. Glass is used by almost all alcohol beverage
manufacturers, and 61 percent plan to use more during the next five years
in response to customer demand. Almost all wineries and distilleries have
experienced a price increase for glass this year compared to last. But this
is not the experience at breweries, where half report no such penalty.
In addition to sales, processors like the message
glass gives to consumers. Glass has a “gourmet look, natural feeling
and inspires quality,” explains a bottler of all-natural juices.
“Glass bottles match our premium brand focus, while also matching a
growing need among organics,” says a water bottler.
Currently, almost all soft drink manufacturers use
aluminum cans, but more than half — 54 percent — are planning
to cut back in the coming years in favor of PET bottles. The data suggest
that soft drinks could retail in a variety of package materials during the next few years.
We are “declining our use of cans and increasing
PET,” is the message from one global soft drink manufacturer. PET is
the “preferred package by customer and cost,” explains another
who anticipates changes ahead.
Most growth in HDPE will come from dairies where 90
percent will be increasing their usage through 2011, largely driven by
sales and growth. This year, 78 percent of dairies paid more for HDPE.
Aseptic packages are used by 16 percent of beverage
processors across all categories — but no category uses aseptic
exclusively. While juice processors have the highest use of aseptic
packaging, there is no consensus about what will happen during the next
five years. Half will buy more; the other half expect to use the same or
less from now to 2011. Most processors using aseptic packaging report
prices holding steady this year.
Aseptic “takes the need for cold storage out of
the distribution chain and also improves shelf life,” explains a
juice processor. “We would like to enter the aseptic juice box market
for foodservice and kids,” says another natural juice processor.
At this time, this study finds 3 percent of processors
using PLA bottles. One processor would like “more PLA and at more
Plastic screw-top is the most popular closure for soft
drinks, juices, bottled water and dairy beverages; and metal crowns are
preferred for energy drinks and beer. Wine — goes without saying
really — is almost always cork.
Looking at all processors in all categories,
pressure-sensitive labels are used by 57 percent. Cut-and-stack as well as
shrinksleeve labels often are used by larger processors. Two of three use
cut-and-stack and half use shrinksleeve. One processor responding to the
survey uses “corn-based shrinksleeve labels.”
The two most popular secondary packaging materials are
paperboard and shrinkwrap. Paperboard is pretty much ubiquitous, used by 86
percent of beverage processors, and used exclusively by 63 percent.
Shrinkwrap is used by 61 percent, of which a quarter say shrinkwrap is
their preferred choice.
During the next five years, processors will increase
their use of shrinkwrap and flexible packaging. On the other hand, use of
paperboard and ring-top carriers will remain at current levels or decrease.
Overall, 41 percent of processors plan to increase
their use of paperboard boxes through 2011, 36 percent plan to hold steady,
and 18 percent will cut back. A small majority — 53 percent —
paid more for paperboard this year compared to last.
An increased use of paperboard reflects sales and
growth; but, compared to responses about shrinkwrap, this packaging is not
necessarily preferred. Fifty-one percent of manufacturers with more than
$100 million in annual revenue expect to keep their use of paperboard boxes
at current levels through 2011. Twenty-seven percent will cut back on
The data suggest that shrinkwrap is the growth trend
in secondary packaging materials for drinks — even though more
processors currently use paperboard. Two-thirds of processors use
shrink-wrap, and a quarter use it most often. Moreover, 68 percent of
manufacturers using shrinkwrap plan to increase the amount they use during
the next five years. This compares to 41 percent increasing their use of
While growth and sales drive usage most of the time,
shrinkwrap is preferred by 37 percent of respondents. Processors say
shrinkwrap costs less, looks great, is easy to use and is the next
generation of packaging. A few indicated they use shrinkwrap because it
means using less corrugated.
Shrinkwrap is an “inexpensive solution to
bundling requirements. New printing technologies allow a custom
appearance,” explains one processor. “The shrinkwrap packages
give the consumer a better look,” says another. “It’s
cheaper and displays the product better,” adds another.
However, the enthusiasm for shinkwrap could shrivel
slightly with consistent price hikes. Two-thirds of manufacturers
experienced a cost increase for shrinkwrap this year compared to 2006.
Other secondary packaging materials are less popular
at this time compared to paperboard and shrinkwrap. Overall, 33 percent of
processors use ring-top carriers and 23 percent use flexible packaging.
Most processors plan to keep ring-top carrier usage at
current levels during the next five years. Flexible packaging, however, can
anticipate greater growth, with 57 percent of processors planning to use
more through 2011. Flexible packaging is admired because it stands out, has
variety and is convenient. Plus, most processors have not experienced a
price increase with flexible in the past 12 months.
“Volume is increasing steadily on all SKUs that
use flexible packaging,” says a global manufacturer.
Ninety percent of processors have multiple package
sizes for their most popular beverage. Having more package sizes represents
the past, current and future trends in beverage packaging.
Almost all processors have multiple package sizes, and
40 percent report an increase in the variety of package sizes in the past
12 months. This trend will continue as 44 percent plan to add new sizes in
2007. The data show that a higher variety of package sizes correlates
positively to processors with more than $100 million in annual revenue. It
also is interesting to note that aluminum cans and PET are most often
associated with packaging variety; glass typically has two iterations.
Processors consider package variety an important
investment for success, and the survey asked them to explain why this was
so. Fifty-three percent mentioned customer demand and sales as the driver.
Also, 26 percent have a marketing reason that includes attracting new
customers, expanding a brand and product differentiation. In addition, 18
percent mentioned that variety creates options and “occasions”
for more use. A new package also is a way to re-launch a best-selling
beverage to a new set of consumers.
A juice processor reports “increasing demand for
small-sized packaging as orange juice pricing has increased.” A
company that offers drinks in various sizes of aluminum cans wants to
“meet consumer expectations and keep consumers within our
brand’s family of products” by offering a re-sealable can
product. A water bottler finds “new equipment has allowed us broader
ranges of bottling.”
This study suggests that offering beverages in various
package sizes is an asset. A processor, who has the capability to create
various sizes and is not doing so should consider that ability an
underexploited asset at this time.
Packages at retail
What’s important for a package at retail? In two
words: presentation and preference. These two considerations are slightly
more important than cost. At least 90 percent of processors agree that
presentation, consumer preference and cost are very important at retail.
Other package issues have
less impact on retail at this time. However, given the current desire for
invisible carbon footprints, efficiencies and sustainability are likely to
become more important in the near future. Currently, distribution
efficiencies are considered very important by 53 percent of processors and
somewhat important by
44 percent — a few consider this not important.
Not everyone is “green” at this time but
many exciting projects are in the pipeline for beverage processors to
consider in the coming years as consumers begin to demand more sustainable
options. Currently, 39 percent of all beverage processors have incorporated
sustainability into their packaging. But this percentage will balloon
during the next five years as all manufacturers responding to the survey
plan to become more “green.”
Eighty percent of “green” processors and
61 percent of processors with “green” plans believe that
sustainability will result in cost savings in the long term. In other
words, manufacturers who have already incorporated sustainability into
beverage packaging project cost savings, so the view from the
environmentally friendly is “money saved.”
In fact, the potential for cost savings exceeds any
pressure from consumers at this time. Eighty percent of processors expect
cost savings from sustainability. This compares to 60 percent anticipating
that consumers will demand sustainability.
It is important to note that a “green”
attitude at beverage companies is driven from the top. Upper management
leads the way in mandating packaging sustainability.
But if not upper management, then Wal-Mart. This
study finds that about half of all processors have been
“inspired” by Wal-Mart’s sustainability scorecard. Among
larger processors, those with annual revenue more than $100 million, 62
percent will be making changes due to Wal-Mart’s scorecard.
In a way, processors who already incorporate
sustainability into their packages point the way for those in the planning
stage and those who have not yet considered sustainability. The most
notable instruction, then, is for “green” planners to
understand that the environmental effort needs to be driven from the top
— even if the top is Wal-Mart.
This study shows that sustainability activity in beverage packaging during the next five years will boom.
Processors who already are green will become greener and processors in the
planning stage will catch-up to the greens. In other words, processors
currently in the planning stage will be busier because they have more to
do. By 2011, the data suggest that 90 percent of processors will implement
light-weighting, use more eco-friendly materials/inks and reduce secondary
Processors were asked to identify green initiatives
in their manufacturing processes. Recycling is at the top of the list with
64 percent of the vote. The way processors describe recycling shows that
cardboard, paperboard, glass, PET, cans, HDPE and shrinkwrap are understood
to be recyclable materials.
“95 percent of our waste materials are
recovered or recycled largely through our returnable bottle or distribution
system,” explains a brewery. “All recyclable materials are
collected and recycled within the plant/offices. Consumer packaging
materials that are recyclable have consumer
labeling that indicates such on the package,” is the view from a
global food and beverage manufacturer.
A dairy processor respondent considers “glass
as the perfect recyclable material. We use labeling that is more easily
recyclable, and have reduced board materials in cases.”
“Recyclable packaging has been at the forefront
of what we have done since inception,” says another dairy
beverage-maker. Adding, “That is why we use reusable glass bottles.
We estimate more than 700 tons of waste savings since we began bottling in
“We use 100 percent recycled paperboard in our
cardboard six-pack, 12-pack and case cartons. We recycle all the shrinkwrap
and plastic used in the facility. We have won the Waste Reduction Award
Program (WRAP) award seven years in a row,” indicated a brewery
One co-packer reports “transfer of
temperatures, water reclaiming, organic materials, grinding of PET,
recycling of glass, and recycling of cardboard,” in his list of green
initiatives. A brewery lists “reduced energy use, reduced emissions,
reduced effluent, reduced material usage, potential alternate materials and
CSR tracking” as green initiatives. “Recycling water, energy
conservation and reuse of recycled material in primary packages,” are
the efforts of a soft drink manufacturer to reduce its environmental
“Microbrew in a can to prevent glass breakage
by consumers, spent grain waste goes to animal feed, looking at CO2
recapture in brew process and looking at wind for electrical
generation,” captures activities at another brewery, which is looking
beyond packaging to further reduce its environmental impact.
Overall, 52 percent of
respondents say they are vertically integrated. The data show an effort
among these processors to move packaging manufacturing in house. Currently,
40 percent meet their packaging needs in house, but in the near future this
will climb to 50 percent.
Who’s in charge?
Almost all processors say that packaging decisions
include senior management. This recalls the fact that green attitudes,
initiatives and implementation are all driven by senior management.
Seventy-five percent of processors include production, sales and marketing
in their decisions, and 53 percent include purchasing. Quality control is
included 43 percent of the time, R&D is involved 39 percent and
design/engineering assist with 35 percent of packaging decisions.
Processors were asked what packaging innovations would
help them in their business, and one-third mentioned something related to
sustainability. This includes eco-friendly packaging, easy-to-recycle
materials, lighter weight materials and biodegradable plastic. A quarter
mentioned innovation that would give them more options and designs. Others
wanted various types of containers, and packaging that catches the eye.
We need “biodegradable
food- quality packaging that is made from GMO-free plant material,”
said one respondent with a tall-order. “Further light-weighting of
HDPE bottles,” would help another. “PET bottles without ridges
or ribbing for wraparound labels,” is a suggestion from another
respondent. “Aluminum bottles with a closure that does not require
expensive equipment to apply,” would also be appreciated.
“Cheaper bottles — oil-dependent products are going to be even
more expensive in the future,” sums up the need for options from
2007 Beverage Packaging Survey has a 95 percent confident level with a
±6 confidence interval. Senior management accounts for 44 percent of
the respondents, and sales and marketing is 27 percent. Production is 8
percent of the sample, R&D is 8 percent, purchasing is 5 percent, and
quality control is 5 percent.
In terms of revenue, 38 percent of the sample
includes facilities where the company’s annual revenue is more than
$100 million, 35 percent report revenue from $5 million to $100 million,
and 27 percent have revenue less than $5 million.
By the Numbers
of dairy drink makers bottle
of all respondents cap
with sports caps.
of all respondents
secure with metal crowns.
of all respondents
close with metal screw-tops.
of soft drink manufacturers
use aluminum cans.
of alcohol beverage manufacturers process with glass.
of bottled water and juice
processors employ PET.