The Flexible Packaging Association recently held its 2019 Fall Executive Conference at the InterContinental Hotel in Chicago, Illinois. The association’s Board of Directors and Executive Committee meetings preceded the conference. This issue of the FPA Update highlights some of the presentations.
State Government Affairs Update
Andy Hackman, principal lobbyist, and Serlin Haley, FPA state lobbyist, provided an update on FPA’s State Advocacy program. In California, AB 1080 and SB 54 were recently moved to the inactive file to facilitate meaningful negotiations over the interim for January 2020. The bills call for source reduction to “maximum extent feasible;” 100 percent recyclable, compostable, or reusable by 2030; and a 75 percent waste reduction goal for single-use plastic packaging and priority single-use products.
As they are drafted now, the bills set mandatory recycling rate goals for single-use packaging and priority single-use products for foodservice ware to 30 percent by 2026 (which is not enforceable); 40 percent by 2028; and 75 percent by 2030. There is a four-step process to achieve these recycling goals. By January 1, 2023, CalRecycle, the state agency charged with implementation, must provide a scoping plan to evaluate funding mechanisms, such as extended producer responsibility (EPR), and deposits; labeling for recyclability and compostability; post-consumer content; expanded collection; public education; and unique and challenging packages and products.
The second step entails CalRecycle drafting regulations that would go into effect on January 1, 2024. This step requires company reporting and baselines; a source reduction checklist; and defines “recyclable,” as what items are regularly separated and sorted, regularly processed and reclaimed, can become feedstock, and are in quantities to maintain a market value.
The third step deals with the implementation of rates and dates starting in 2026, 2028, and 2030. CalRecycle will post the rates based on material, form of packaging, and if the packaging is for single-use products, and there will be 2-year updates to the rates. In addition, any additional regulatory requirements that were outlined during the scoping plan will be implemented.
The fourth and final step (if needed) includes a Corrective Action Plan (CAP) or extended producer responsibility (EPR) for compliance if companies cannot make the required rates and dates, as there is a potential fine of $50,000 per day for non-compliance. There may also be submissions for recycled content; take-back/deposits; and joint ventures, with a 24-month extension. There may also be additional enforcement performed.
There are several other states where there is proposed packaging legislation that may affect the flexible packaging industry. In Maine, there is LD 1431 — Resolve for Packaging EPR, which covers all packaging. It entails a Quebec EPR approach, which is where the industry pays municipalities 100 percent of disposal/recycling costs, and there are differentiated fees for recyclable products versus those that are not. This is likely to move forward in 2020.
Vermont approved S.113 for single-use plastics and a Packaging Working Group with EPR as the focus, and they will issue their report by 2020. In Massachusetts, in mid-October, there will be a hearing to discuss access to recycling and single/dual stream; EPR and packaging fees; public space recycling; multifamily recycling; and disposal bans. Recently, the Massachusetts Department of Environmental Protection released “Recycle Smart,” a statewide initiative focused on putting the right materials in recycling bins and separating problem materials that cause contamination and drive up the cost of recycling.
Winning the War on Plastics
Bruce Welt, Ph.D., a professor at the University of Florida discussed plasma gasification as a viable end-of-life option for municipal solid waste (MSW). Plasma gasification is a robust and flexible waste-to-energy system that processes landfill waste to extract commodity recyclables and convert carbon-based materials into fuels. According to Dr. Welt, “Plastic is not the problem, the problem is how we are choosing to handle our waste.”
In comparing the various methods for handling MSW, plasma gasification seems to be the best option as it is not selective in what materials can be used in the process. Other methods such as chemical recycling and incineration are selective, and in the case of incineration, there are hazardous ash/emissions that are created in the process. There is also no sorting required and all dirty/contaminated plastics; mixed plastics (all types); metallized plastics; laminates; foils; labels; adhesives; shrink labels; and fitments, etc. are acceptable items for the plasma gasification process.
Steve Rice, director of business consulting for EFI, spoke about managing incentives. An incentive is defined as something that motivates someone to engage in a behavior or something that tends to incite a determination of the action. There are two types of incentives that are common in the workplace. The first, Explicit Incentives, are formal, documented connections between actions or achievements and outcomes and can include sales commissions, productivity targets, and quality goals. The second type, Implicit Incentives, are informal, emerging conditions and consequences that influence behavior such as “Path of Least Resistance,” conflict avoidance, and personal preferences.
Incentives should focus on both objectives (outcomes) and tactics (behavior). The objective defines a direction or path to execute a business strategy and provides measurable targets to assess performance. Tactics identify behaviors required to support the objectives and spells out actions that lead to outcomes. Incentives based only on objectives can lead to unexpected results (unintended consequences).
Objectives support strategies implemented to achieve business goals and the SMART criteria is still applicable:
- Specific — target a specific area for improvement;
- Measurable — quantify or at least suggest an indicator of progress;
- Assignable — specify who will do it;
- Realistic — state what results can realistically be achieved, given resources;
- Time-related — specify when the result(s) can be achieved.
The design of effective incentives requires effort and careful consideration. Effective incentives align with the goals and objectives of the business; uses appropriate measures; prescribes meaningful outcomes for the incentivized; and considers the consequences.
Global Trends in Flexible Packaging
Bill Carroll, senior consultant, from Euromonitor International, discussed global trends in flexible packaging.
In Latin America, stand-up pouches continue to be a growth driver in multiple categories, including pet food, beauty and personal care, and food. Technology continues to offer the most opportunities for differentiation in food packaging. Increased portability is a priority for food packaging and snacks, though family-sized home care products remain resilient.
In Western Europe, consumers show many different preferences, with smaller pack sizes preferred in beverage and beauty products and bigger pack sizes preferred in packaged food and home care products. However, there remains dynamic growth in smaller packaging sizes in select food categories due to health awareness. Single-use plastics may see tougher regulation in the future.
In Asia Pacific, most flexible packaging use is in packaged food, with snacks and noodles leading unit volumes. Flexible plastic is favored due to convenience, affordability, and preserving ability. Health trends drive smaller packaged food pack sizes, while the value for money drives larger home care formats.
In Eastern Europe, convenience, economy, and safety epitomize the main packaging trends. Food packaging remains the largest flexible category in 2018. Key sub-categories include confectionery and dairy. Within food packaging, baby food showed the highest flexible growth rates across Eastern Europe.
In the Middle East and Africa, improving income levels and the development of retail systems is increasing the consumption of packaged foods and beverages. Flexible plastics are the largest flexible type and maintain the highest flexible growth rates. Food packaging remains the largest category by far.
In North America, food packaging remains the largest category for flexible packaging, with the largest sub-category being confectionery. Smaller pack sizes appeal to health-conscious consumers and pouch packaging offers convenience. In dog and cat food, flexible packaging continues to grow due to the ongoing trends of premiumization and humanization.
For More Information
To download presentations and videos from the FPA 2019 Fall Executive Conference, please visit the “Members Only” section of www.flexpack.org. For more information about FPA meetings and conferences, contact FPA at email@example.com or 410-694-0800, or visit www.flexpack.org.