Agenda: a year in drinks packaging

The drinks packaging sector has provided a heady mix of drama and innovation in the past year. Providing the drama were a top-level legal wrangle over planning permission at Quinn Glass’s factory in Ellesmere Port, a row over the proposed closure of the Johnnie Walker bottling plant and a public spat over packaging’s role in drinks marketing involving a Scottish microbrewery and the Portman Group provided the drama. Meanwhile, innovation came in the form of the advent of digital printing on cans, the first drinks applications of UK-sourced recycled PET and HDPE plastics, and discussions over whether drinks should follow laundry products’ lead and concentrate more. Here’s our round-up of the sector’s biggest stories this year.

Portman Code
A public row erupted in January when drinks marketing watchdog the Portman Group blacklisted BrewDog’s Speedball beer, judging that its name associated the beer with drug use. It was not the first time that the Scottish specialist brewer had fallen foul of the Portman Group’s rules – its Punk IPA brand name had already been blacklisted because it could encourage aggressive behaviour. BrewDog reacted angrily, accusing the group of treating consumers “like fools” and later threatening legal action. What’s more, Top Gear star James May joined in the row, saying on his Oz and James Drink to Britain show that it was insulting to suggest BrewDog’s beers could make anyone feel aggressive. The legal challenge was dropped, but the Portman Group’s influence, it appears, rose; it revealed in March that it had received a record number of complaints in 2008.

Diageo
The UK’s biggest drinks company is hugely influential in the packaging world at any time. But 2009 has not been a normal year for the firm. First, in March, it launched its Supplier Innovation Programme, effectively an overhaul packaging supply roster. No fewer than 60 suppliers were invited to the company’s Edinburgh offices in April to hear about 10 briefs that the company was laying out; the results have yet to be made public. Yet publicity was hardly far from Diageo for the rest of the summer. In July, it announced plans to close its Johnnie Walker bottling plants in Kilmarnock as part of a wider restructuring that would lead to the loss of 900 jobs. The announcement led to a march of 20,000 people through the town to protest the closure led by Scottish first minister Alex Salmond. Diageo has said it will consider other options but has defended its plans; not least as it is also spending £86m expanding a plant in Fife that will create 400 new jobs.

M&A activity
Over in the US, drinks packaging has kept lawyers and bankers busy in the past year on deals including PepsiCo’s buy-out of its two biggest bottling companies and Ball Corporation’s acquisition of AB InBev’s packaging plants. PepsiCo’s $7.8bn (£4.7bn) acquisition of Pepsi Bottling Group and PepsiAmericas stole the show for its sheer scale, but it was not without its obstacles. The two bottlers initially poured scorn on a $6bn offer from the drinks giant, a move swiftly followed by PepsiCo launching legal action against PBG for its handling of the offer. How the deal will affect European packaging producers remains to be seen – between them, PepsiAmericas and PBG have operations across central and eastern Europe and in Greece, Spain and Turkey. Alcoholic drinks multinational AB InBev, meanwhile, tied up the sale of four soft drinks can manufacturing plants in the US to Ball Corporation for a cool $577m.

On-the-go can recycling
Aluminium already has one of the higher recycling rates of all the packaging materials but the last year has brought a renewed effort to make it easier for the public to put cans back into the recycling stream. On one hand, the Every Can Counts scheme, run by industry organisation Alupro, is encouraging workplace recycling of cans and won the support of environment minister Jane Kennedy before her sudden departure during Westminster’s expenses scandal. On the other, on-the-go recycling zones have been launching through the year across the country. Most notably, Coca-Cola has led the way by opening a dozen zones in theme parks, hospitals, airports and universities – it plans to have 80 of the zones up and running by 2011.

Digital printing on cans
Personalised drinks packaging took more steps to becoming a reality this year after digital printing began making its mark in beverage cans. Ball Packaging Europe used last year’s Brau Beviale to show off its digitally printed cans. Then, in July, it signed a partnership agreement with Tonejet, the digital printhead manufacturer, to develop the technique further. Ball president Gerrit Heske said that digital printing on cans would open up a huge range of new possibilities for marketing the drinks they contain. Of course, there are a wide variety of other ways to make cans look special, including many ink effects and the printing of tabs and ends. Crown, too, is in on the act; it has been working with Jetrion on digital printing on to cans for a number of years.

Recycled plastics come on stream
Much has been made in recent years of the use of food-grade recycled plastics in both drinks and food packaging. But 2009 was the year when the first quantities of recycled PET and HDPE from UK producers hit the market, with Greenstar WES, Closed Loop Recycling and AWS Ecoplastics all starting to output the high-grade materials that had previously been imported from continental Europe. With brands including Innocent, Coca-Cola, Solo Cup Europe, Ribena and Marks & Spencer among those keen to use the material, not to mention the dairies who have pledged to include 10% recycled content in their HDPE milk bottles by next year, the use of recycled plastics in bottles looks sure to continue growing in years to come.

Copycat bottles
Brands can get very sensitive about their packaging but two legal cases this year have highlighted the issue. In May, Coca-Cola won a legal battle to ban production and sales of the packaging for drinks rival Yoplait’s Dizzy because its shape, the court ruled, was too close to the bottle of its own Blak brand. The Paris Court of Appeal decided that the Yoplait bottle, which was on sale in France and across Europe, too closely resembled that of Coca-Cola’s coffee-flavoured product. Meanwhile Diageo, which owns Pimm’s, launched legal action against Sainsbury’s over a gin-based drink called Pitchers which, the supermarket says, should be consumed with lemonade and fruit. As this supplement went to press, the case was ongoing.

Concentrates
Concentrated product that cuts packaging weight is all the rage in the laundry category – you need look no further than Persil’s Small and Mighty or Ariel’s Excel Gel for evidence of that. But could the trend be on its way to the drinks market? Speaking in February, Tesco head of packaging Sonia Raja argued that it should. She called on the drinks industry to follow the laundry sector’s example and move to concentrates where possible. Speaking at a drinks packaging conference organised by Wrap, she said the industry should develop packaging to “maximise returns and consumer acceptance”. “When you all move together it also makes it easier for retailers like us to facilitate the move,” she added. Tesco itself sells a double-concentrate squash, which led to an uplift of squash sales of nearly 9% and a saving of 1,500 tonnes of plastic per annum.

Bisphenol A
While controversy rages within the industry over the environmental benefits or otherwise of biodegradable additives to plastic packaging, the national media concentrated on health concerns over Bisphenol A (BPA), an additive used in plastics. Food safety authorities in the US are trying to have the additive banned due to fears that it could contribute to heart disease and diabetes. Despite reassurances from the Food Standards Agency and the British Soft Drinks Association that it is used in entirely safe quantities, the spectre has now been raised that buyers in Europe could stop purchasing it. In response, glass manufacturer O-I revealed in March that it was considering producing glass baby bottles in Europe, following the lead of its US business, which itself had just begun producing the bottles for the first time in 20 years.

Quinn Glass
Quinn Glass’s bottle manufacturing and filling facility at Ellesmere Port in Cheshire is seen by many as the most advanced glass facility in Europe. Yet it has been in the headlines for all the wrong reasons this year over rival Ardagh Glass’s legal challenge over planning permission for the factory – or lack of it. A High Court judge ruled in May that the plant, which began production in 2004, had been built illegally and that local authorities must order it to stop operations. However, Quinn has now gained planning permission for the site from the local authorities and is waiting for the case to come before the communities secretary John Denham. Given that closing the plant would mean the loss of 600 jobs, it is hard to imagine that Denham will overturn the ruling.

Metal packaging
The past year has seen a profusion of formats and uses for cans, and not only in the energy drink sector where Red Bull’s slimline 250ml container has led to a variety of imitators. Canmaker Rexam has been particularly forthright in pushing unusual shapes and applications for cans. On the shape front, its Fusion aluminium bottle, which was first launched in 2008, is due to go into full production in early 2010 in the Czech Republic. A number of drinks companies are understood to be trialling the format. Elsewhere, the group has been making a play for the wine market. It exhibited at the London International Wine Fair at the start of the summer, and at the show launched CanCan, a white wine from Guy Anderson Wines. The Times’ wine correspondent didn’t like it – but a precedent has been set.

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