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A look back at a landmark year | Review of 2012

January 3, 2013 Comments Off

It was always going to be a big year for the UK and 2012 did not disappoint. The packaging industry played its part in a busy summer while other issues just never went away. Philip Chadwick selects his highlights

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Olympian efforts during the summer

It was a golden summer for the UK. While the weather did its best to make the season a damp squib, the Jubilee and London Olympics seemed to bring the nation together. And packaging was a very important part of the party.

Brands and retailers were especially keen to seize on the quintessentially British occasion of the Queen’s Golden Jubilee. Union flags were everywhere to be seen on products as diverse as crisps and gin. In the case of Kellogg’s, it was an opportunity to go back in time with a retro look for its Corn Flakes and Frosties brands. It all made shopping aisles feel patriotic; but not everyone was impressed. Critics claimed that you shouldn’t just slap on a Union Jack on any old product – there needed to be a logical fit between the brand and Britain which, in some cases, there clearly was not.

Just a month later, the best of British was there for the world to see at the London 2012 Olympics and Paralympics. Again, packaging had a crucial role to play, with most packs at the event having to fit stringent guidelines on compostability from event organisers Locog.

All this was designed to boost the chances of hitting a target of 70% waste to be recycled, reused or composted. Multi-coloured bins were installed at venues to help spectators to dispose of packs and Locog linked up with the Games’ partners such as McDonald’s and Coca-Cola.

So did it work? Well, almost. The 70% target (a figure set by the London Assembly) was missed although the Games did hit 62%. There were also dissenting voices from within the packaging industry noting that the packs themselves were manufactured in China.  But Locog said it had no option but to source some packs from abroad as there were no options close to home. On the upside, the Games’ legacy should allow for a more joined-up approach to delivering sustainable events in the future.

Delivering the ‘wow’ factor

There are some very clever bods in packaging. Whether it was cartons lighting up stores or packs that could work out your exact location, this was another 12 months where packaging technology took another step forward.

For the print sector, Drupa was the big draw in May; Düsseldorf hosted the printing kit’s equivalent of the Olympics. Among the highlights was nanography, a new print technology from the creator of industrial digital printing at Indigo, Benny Landa. It relies on ink pigments that are vastly smaller than ink droplets and are said to adhere to any surface. Reflex Labels and carton printer Firstan have taken the leap with presses set to be installed during 2013.

Nano technology might also be able to solve one of life’s perennial problems – squeezing the last drops from a ketchup bottle. A team of students at Massachusetts Institute of Technology developed a nano coating,  LiquiGlide, which effectively allows each drop of sauce to slide out of the bottle. Good news for combating food waste and great news for anyone who finds vigorously shaking a bottle a real drag.

Another bottle (or to be precise, the outer casing) that caught the eye, for altogether different reasons, was from Bombay Sapphire. Its design agency Webb deVlam was tasked with lighting up the aisles for Christmas and did this by using eletro-luminescent ink. When the consumer lifts the pack, an illustration lights up thanks to a battery and hidden switch. This charges the ink and creates the sparkly look.

For £10,000, you could probably buy a sparkly look and more. Nestlé ran a promotion in September giving consumers the chance to win that amount but rather than answering a fiendishly tough question, all you had to do was open the wrapper. Four bars of Nestlé chocolates, which included Kit-Kats, were fitted with GPS enabled devices. Once the tab was pulled, a delivery team tracked the winner down and handed over the cheque. With 2012 being the 50th anniversary of the James Bond films, it’s apt that a brand was using technology that could have come straight out of Q branch.

Out with the old, in with the new

Back in 2011 we had a recycling minister and could use the phrase ‘sustainable packaging’ without batting an eyelid. That all changed in 2012 – the Government now has a ‘resource management’ minister and if PN dares to print the word ‘sustainable’ alongside ‘packaging’ (which we sometimes have to), it’s met with uproar from the industry’s great and good.

First up is Defra. It was all change in the Government department following Prime Minister David Cameron’s first reshuffle, in which Lord Taylor, who was popular in packaging circles, was moved on and replaced by Lord de Mauley. Meanwhile, the less popular environment secretary Caroline Spelman was replaced by Owen Paterson.

Both will face growing calls from the industry, especially plastics, to rethink the ambitious recycling targets that were unveiled at the start of the year. By 2017, 57% of plastics will have to be recycled. For steel the target is 76%, aluminium is 55%, while overall packaging recovery needs to go up to 79%. The concern for plastics is that higher targets will lead to more exporting of recovered material. Expect the lobbying to continue in 2013.

As for sustainable packaging, that term was shot down following a PricewaterhouseCoopers report published in the summer. The main conclusion was that sustainable packaging is a myth and the concept should be scrapped; instead, we should be using the phrase ‘efficient packaging’, which takes into account the entire lifecycle of not just the packaging but the product as a whole.

To be fair, many in the industry have been arguing this for some time and the contributors to the report looked like a who’s who in the industry – Nestlé, Rexam, Diageo and the Packaging Federation to name just four. But not everyone has got on board with the message and ‘sustainable packaging’ is still accepted in some quarters – the counter argument is that efficient packaging moves the goalposts. M&S is still striving, through its Plan A, to make a “truly sustainable packaging supply chain a reality”.

Confused? Perhaps, but what is certain is that packaging continues to progress in its environmental responsibility. It might be worth the Government listening harder to the industry and make its demands a little more realistic.

The Year in M&A

Arguably the most significant deal of the year was DS Smith’s acquisition of the majority of SCA Packaging for £1.4bn. The deal was seen as a  real game changer for the corrugated sector and made DS Smith the second biggest corrugated group in Europe, as well as giving it a major foothold in markets such as Germany, eastern Europe and the Nordic region. Elsewhere in the corrugated sector, SAICA continued to expand its waste management business by buying Houghton’s Waste Paper to help supply waste paper to its Partington paper mill, which itself started up this year. There was also something of a trend for overseas investment in the UK market. The Canadian labels giant CCL Industries bought John Watson & Co, the Scottish spirits label specialist. And Contego Packaging sold its food cartons division to the US-based cartons multinational Graphic Packaging in an £81m deal that will allow Contego to focus on its pharmaceutical operations. Plastics were active too, with Mondi buying Nordenia in a €240m deal; Linpac also sold both its Allibert division and Ropak in the US.

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