Paper and packaging industry experts from across the globe came together in Vienna recently at the Fastmarket RISI Annual European Conference to share their perspectives on global market dynamics and learn from each other. It provided a great forum to explore some of the key trends we are seeing, and explain why I believe Mondi is leading the way in many areas.
We can all relate to the rapid pace of change across so many areas of life. It’s no different in the packaging industry where global macroeconomic trends are impacting the way we make, use and dispose of packaging. I focused on three trends which stand out for us: sustainability, digitalisation and urbanisation.
Sustainability is arguably the most important macro trend of our time. With growing public pressure, sustainability is now a business imperative for leading companies.
Preferences have shifted significantly over the last couple of years, with research showing that consumers are interested in the sustainability of the products they buy, where they come from and how they are packaged. 92% of respondents in a European-wide survey in 2017 said that packaging is very important to them. This percentage has steadily increased over the years and is particularly evident in the 18-34 age group who are the most keen to make sustainable purchasing decisions.
Sustainability regulations are being adopted across the globe, it is the fibre from which present and future success will grow … Consumers are keen to make sustainable purchasing decisions and market research suggests they are increasingly willing to pay a premium for environmentally responsible products.
The legal environment is changing equally fast with a variety of sustainability regulations being adopted across the globe. Take for example the European Union directive to reduce single-use plastic packaging by 90% (from 2010 levels), which means the elimination of around 50 billion plastic bags across Europe over the next couple of years. As the largest global kraft paper and paper bag producer, this puts Mondi in a strong position.
The move towards paper packaging is important as paper inherently has the lowest CO2 footprint of all packaging types. When using renewable, self-sufficient energy like Mondi does, paper comes in at 160 kg/t which is significantly lower than glass at 1250 kg/t, aluminium at 9503 kg/t, or low-density polyethylene at 3,040 kg/t1. If you look at the carbon footprint of pulp and paper mills end-to-end you’ll see that paper scores low and what makes it really attractive is that any by-products of the pulp and papermaking process can be used to generate renewable energy. Paper is also recyclable, not just at a theoretical level but also in practice, with paper recycling rates across Europe at over 80%.1 So paper often is the most sustainable solution.
If we look at data to start with, the last two years has seen more data generated than humanity has created since the invention of the wheel. That’s quite a remarkable figure and it is only going to continue rising. E-commerce is rapidly growing and transforming the retail landscape. Even though it only counts for 10% of global retail sales at the moment2, it makes-up half of the growth in retail sales every single year and is set to continue. This has benefits for our industry as the majority of secondary packaging used in e-commerce is corrugated.
Advanced analytics in our mills use thousands of sensors to get better insight into how to operate and ultimately drive increased operational performance.
At a business model level, the paper industry to date is not very advanced in the adoption of digitalisation, but at Mondi we are changing that. We believe there is a lot to be gained. One example is advanced analytics which allows us to exploit the massive amounts of machine data generated in our mills using thousands of sensors in order to obtain better insights into more optimal operating patterns for our assets.
In 1990 only four in 10 people lived in urban areas, but it’s predicted that this will increase to almost seven in 10 by 2050.3 Cities are economic powerhouses and by 2025, they will generate 80% of the world’s GDP. Why is this important? Urban societies need more packaging. Yet, urban environments cannot afford to generate more waste. Packaging needs to be sustainable by design, with a focus on ‘fit for purpose’ solutions that use renewable and recycled resources and support the circular economy. This includes eliminating unnecessary packaging; using paper-based packaging wherever possible; ensuring plastic packaging uses the least possible material to achieve the required functionality; and prioritising reusability, recyclability, compostability and biodegradability.
At Mondi, we have been working on adjustable sized boxes to create tailor-made packaging. Our flexible sized corrugated boxes offer premium strength and allow goods to be shipped with less wasted space and therefore less waste overall.
Mondi is well placed to grow with a changing world and will harness these macro trends to contribute to a better world. With a heritage of over 200 years in papermaking, we are well positioned to leverage global trends and we are working with customers and industry partners to fast-track the development of more sustainable packaging solutions. Our focus is on using paper where possible, plastic when useful. We will continue to collaborate across the value chain, engage in multi-stakeholder initiatives, and work with organisations such as Fastmarket RISI to share learnings and find solutions to the challenges that our industry faces.
1) Packaging Digest 2017 Sustainable Packaging Study
2) Statista 2019
3) Hot Spots 2024 Benchmarking the Future Competitiveness of Cities
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