Plastic: The Most Sustainable Packaging?

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Transcript

Saif Hameed [00:00:00]:

When you think about what I call the battle of the substrates, which is all the different packaging materials kind of vying for the position of most sustainable, I find that there's a different narrative depending on which substrate you're coming from. I know that glass tends to talk about the high level of reusability, the fact that glass is typically inert if it goes into the ocean. Metals has a similar narrative as well. How do you think about the sustainability narrative behind plastic?

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Melissa Brice [00:00:23]:

I think it's really important to look at the life cycle assessment. So Amcor has an internal tool called Asset. It's a proprietary tool verified by the Carbon Trust. And it's really important to look at the overall life cycle assessment of the substrates you're looking at and comparing them that way. Because if you just look at a material on its emissions factor basis, one could look better than another. But PET is lighter weight, so you can use less material, it's lighter to transport. So when you're looking compared to glass, you want to include transportation because you'll probably need fewer trucks to move more material or use less fuel to move that material. So it's important to look at the picture holistically when you are choosing which substrate to work with.

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Melissa Brice [00:01:06]:

I will mention that the plastic industry does have farther to go in terms of decarbonization. We do use some aluminium in our flexibles business and found that they are able to switch to renewable electricity. So we're really putting a lot of pressure on our chemical providers or chemical resin raw material manufacturers to move more towards renewable electricity to invest in net zero carbon operations. So we are doing our part there. Additionally, you could look at recyclability as well when choosing a substrate. So I know you mentioned the recyclability of glass and aluminium, but additionally, plastic can be turned into the circular economy and reused heavily.

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Saif Hameed [00:01:57]:

Today we're going to talk about one of the biggest challenges in the decarbonization world, which is packaging. And not just any packaging, but specifically plastic. Plastic is important whether you are a fan or a foe of plastic as a substrate. It is undeniably one of the workhorse materials that we have innovated as a part of the industrial area. Plastic is everywhere. Plastic is not just the stuff that wraps your food, but it keeps medication sanitary, it gets shampoo and soaps to all corners of the earth. Plastic has been one of the ways in which we as a civilization have really innovated in terms of getting products to consumers. At the same time, plastic excess is something that really gets many people quite charged it is also one of the, let's say first levers that most brands and consumer businesses think about when they look at how to reduce the emissions intensity of the products that they're making.

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Saif Hameed [00:02:52]:

And that's not just true for plastic, it's true in that case for all the packaging substrates that they might deal with. So we're super excited to really deep dive on plastic packaging and how to decarbonize it, how to help brands on their decarbonization agenda. To help us unpack this, we're joined by Melissa Brice, Senior Sustainability Manager at Amcor, a global leader in sustainable packaging. We're going to explore the big themes behind this topic. So brand perception, how packaging plays into the narrative, what are the decarbonization levers? How do you actually innovate and bring new R and D to the customer in this space as well and everything related to that. Melissa, hello and thank you for joining us.

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Melissa Brice [00:03:32]:

Hi. Thank you so much for having me today.

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Saif Hameed [00:03:34]:

Super excited and would love to just start with maybe a bit about your role and I guess, you know, what are the things that you're doing day to day, week to week within this mandate.

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Melissa Brice [00:03:44]:

Yes. So I joined Amcor two years ago now and I've held two positions within the company in this short time. I initially started off as a sustainability manager on our corporate team. So reporting into our Chief Sustainability officer and my largest contributions there were writing the internal and external roadmap for how Amcor will decarbonize and meet our assignments. Science based targets. We have short term and long term approved verified science based targets. And then in November I moved over as senior Sustainability manager into one of our business groups. So Amcor is a global organisation.

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Melissa Brice [00:04:17]:

As you mentioned, we have six different business groups and now I am part of the Amcor rigid packaging business group. So my role has expanded beyond just greenhouse gas emissions reduction and into helping to drive a circular economy for plastic packaging, helping to educate our customers on the regulations that are being put in place around packaging and then also just helping to embed sustainability more broadly in the culture. Within Amcor rigid packaging.

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Saif Hameed [00:04:46]:

Our audience is typically sustainability professionals from within the consumer packaged goods value chain. Most of them will be familiar with rigid packaging and kind of what that rigid plastic packaging and what that looks like. But just for the others, could you give a bit of a sense of like what types of products are we talking about? As a consumer, what do I identify as something that's within your scope of work.

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Melissa Brice [00:05:06]:

So for the rigid packaging, it's primarily pet based but we do have. So that's in our beverage segment and incorporating more of recycled content. We also have our specialty containers business, so that will be more of our polypropylene hdpe.

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Saif Hameed [00:05:22]:

Melissa, to go a little high level, when you think about what I call the battle of the substrates, which is all the different packaging materials kind of vying for the position of most sustainable, I find that there's a different narrative depending on what substrate you're coming from. I know that glass tends to talk about the high level of reusability, the fact that glass is typically inert if it goes into the ocean. Metals has a similar narrative as well. How do you think about the sustainability narrative behind plastic?

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Melissa Brice [00:05:49]:

I think it's really important to look at the life cycle assessment. So Amcor has an internal tool called Asset. It's a proprietary tool verified by the Carbon Trust. And it's really important to look at the overall lifecycle assessment of the substrates you're looking at and comparing them that way. Because if you just look at a material on its emissions factor basis, one could look better than another. But PET is lighter weight, so you can use less material, it's lighter to transport. So when you're looking compared to glass, you want to include transportation because you'll probably need fewer trucks to move more material or use less fuel to move that material. So it's important to look at the picture holistically when you're choosing which substrate to work with.

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Melissa Brice [00:06:35]:

I will mention that the plastic industry does have farther to go in terms of decarbonization. We do use some aluminium in our flexibles business and found that they are able to switch to renewable electricity. So we're really putting a lot of pressure on our chemical providers or chemical resin raw material manufacturers to move more towards renewable electricity to invest in net zero carbon operations. So we are doing our part there. Additionally, you could look at recyclability as well when choosing a substrate. So I know you mentioned the recyclability of glass and aluminium, but additionally plastic can be turned into the circular economy and reused heavily. We have a lot of materials, a lot of products for our customers that use 100% recycled plastic. We are also part of different organisations that are working to expand on the circular economy as well, so increase recycling rates.

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Melissa Brice [00:07:32]:

So I think you have to look at the holistic picture through a lifecycle assessment and focusing on a circular economy.

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Saif Hameed [00:07:40]:

And Melissa, if I dive a little more into the recycling topic, I find that there's an interesting line to be drawn between use of recycled content and recyclability. Of the product. And these two are not necessarily the same thing. Which one do you see as more important from an impact perspective and. Or which one is harder to achieve from an impact perspective?

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Melissa Brice [00:08:00]:

Yeah, it's interesting. They both have their challenges in those different regards. So designing for recyclability has been around for a long time. You know, you have the golden design rules by the Consumer Goods Forum. Amcor focuses a lot and ensuring that the packaging we create is recyclable. So for Ridgids, about 95% of our business is recyclable. Some of those things like smaller containers, containers that are smaller than the 2 inch by 2 inch guidelines for going through the MRF process, or some that have shrink sleeves which are just like customer requests, you know, shots those shots products are very popular. So sometimes it's hard to get to 100%, even though that is our goal.

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Melissa Brice [00:08:41]:

But so being at 95% recyclable based on design guidelines, we feel very good about. And then in terms of incorporating recycled content, Amcor does have a publicly stated goal to be 30% post consumer recycled content by 2030. The challenges we're finding there are that the amount of supply. So that's why we're really focusing on a circular economy, increasing recycling rates. So that's why Amcor supports good extended producer responsibility legislation to ensure that more is getting recycled. More is being invested in infrastructure for recycling. We're part of the alliance to End Plastic Waste. So we are really working on how can we increase recycling rates.

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Melissa Brice [00:09:26]:

So that's one challenge, making sure that the supply is increased. And then the second challenge is like the cost of post consumer recycled content. It is more expensive than virgin at this point. And so we see some customers shying away from incorporating more. But that's where we think EPR and also the minimum recycled content legislation that's passing will really help push for more recycled content within the product.

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Saif Hameed [00:09:53]:

Melissa, I have so many questions off the back of this. Maybe one to start with, let's go into virgin material versus recycled material. What you're describing has been, as far as I'm aware, true for some time. And the other piece that I find interesting is I think virgin content is going to become cheaper faster than recycled content is going to become cheaper. And I think the reason for that is we generally do a better job of making hydrocarbon extraction and the whole bandcamp process more efficient. It like plays into just a very natural industrial efficiency drive that we've gotten quite good at economically versus if you look at what it takes to get recycled material to be ready, available at quality food grade. There's just so much stuff like from a complex coordination challenge that sits behind that that we haven't really managed to get right ever, frankly. Do you think that this changes or does it really need some form of taxation and effectively an EPR driven taxation or imposed cost to even out those cost thresholds, or do you think that actually recycled content can get cheaper on its own merits?

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Melissa Brice [00:11:02]:

Yeah, I do think that we need the extended producer responsibility. Just because recycling has been mainstream since the 70s and we still see stagnant recycling rates. And so in Europe, where they have more stringent recycling legislation, we do see higher recycling rates there. So I think legislation is a good catalyst for increasing recycling rates and really helping to put the onus on the companies that put products on the market. Because right now it's a lot of government funded. And so if we can increase investment, I do believe we'll see, you know, based on what we've seen in other countries, we will see increase in recycling rates and also part of the extended producer responsibility fees that are implemented. Part of the multiplier on how much you pay in that fee is how is what the recycling rate is. So if you have a higher recycling rate, you'll pay less.

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Melissa Brice [00:12:00]:

So I think there's that economic incentive to ensure that you're using materials that are highly and easily recyclable and will all work together to increase those recycling rates.

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Saif Hameed [00:12:10]:

And if you think about the infrastructure that it takes to deliver recycled content, and you mentioned MRFs for instance, which for anyone not familiar with MRFs are basically the places that separate out the different waste streams into their different categories so that they're easier to recycle. Do you see much happening on the landscape for that kind of infrastructure? I remember looking at this across Europe a few years ago and finding that you had some pockets where it was reasonably centralised and getting to be reasonably efficient. And then the uk where I live is a nightmare from just a system perspective because it's all these little boroughs figuring out their own recycling schemes. Do you feel like there's good momentum towards the infrastructure side of this topic?

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Melissa Brice [00:12:55]:

One thing I've seen that I think is encouraging is with these EPR legislation, states are doing needs assessments first. So really taking a hard look at where they are today and what would be needed to increase infrastructure, and then they'll be able to make sound investment once they've collected the fees. So I think that's a work in progress. From my understanding that the needs Assessments will help states to have better infrastructure.

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Saif Hameed [00:13:22]:

Thanks, Melissa. If we maybe move a little more over to the, I guess the R and D and innovation side of the topic. What are the big innovations that you see as a, as a player in this space that can actually drive down the environmental impact of the product? I know that Amcar has a few really exciting collaborations with customers and I imagine that the redesign of the actual product that you're selling is, is an area of focus. What are the big themes that you're looking at?

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Melissa Brice [00:13:48]:

One of the major themes? Well, there's a few. One is material reduction. So that's a big focus in the beverage category is lightweighting. And Amcor has a technology called Power Post which delivers on lightweighting for hot filled bottles. So we're able to have a 30% reduction in energy use and 30% reduction in greenhouse gas emissions by this technology. So it essentially is moving the vacuum panels from the side panels to the base, which will allow for lightweighting so you can have a lighter material bottle. There's a lot of benefits from that as well as it also can allow for up to 100% recycled plastic use as well. And essentially the two key technologies in Power Post is an invertible central post in the bottle that actively displaces the vacuum.

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Melissa Brice [00:14:40]:

And then it's matched with another technology called PowerStrap, which is a flexible ring surrounding the post. And so after filling, the post is inverted to actively displace the the vacuum inside the container and then as it cools down, the surrounding ring flexes to passively absorb any remaining vacuum. So that's been a great technology in the hot fill space which has been historically more difficult to get up to 100% recycled plastic and to lightweight. There tend to be heavier bottles than you'll see with cold filled beverages. So we're proud of that technology.

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Saif Hameed [00:15:14]:

What is the impact that you're seeing from this particular innovation? Like, I assume like an emissions terms. If you think of the overall emissions of the packaging, what kind of reduction are we looking at here?

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Melissa Brice [00:15:25]:

So when compared to other 20 ounce containers without the technology, you can see a 30% reduction in greenhouse gas emissions and energy use. So that is definitely something that we can tout with our customers and hopefully especially those in the hot fill space, like juice, that we can hopefully help meet their sustainability goals.

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Saif Hameed [00:15:47]:

That is a significant chunk of emissions out. When you're, when you're pitching. We're always super interested on this show about the interface between commercial advantage and sustainability advantage. So like when Aqua is pitching this sort of innovation to its customers. Is that typically something that goes like Amcor sales to customer procurement, or is sustainability kind of speaking directly to sustainability across the boundaries? Like, how do you actually take this sort of thing to market?

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Melissa Brice [00:16:16]:

It will go through our commercial sales team, since they have the closest relationship with the customer. So technically, since I'm in sustainability, when I'm having sustainability conversations, it's more about decarbonization and providing data. But in trying to demonstrate the innovations, it will be mostly through our commercial team or through R and D teams talking together. I actually used to be in R and D at a brand before I moved to Amcor, so I know we had close relationships with suppliers and Amcor has close relationships with their customers. Well, they'll come on site to our innovation centres, we'll show them the technologies that we have, we'll give presentations just to bring them up to speed on what we're working on. And then we'll also do collaborations. So if a customer comes to us with a need, we'll work together to design what they're looking for. So, yeah, mostly sales or R and.

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Saif Hameed [00:17:03]:

D. I'd love to move to the next theme.

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Melissa Brice [00:17:05]:

Yeah. Another one I think is really interesting too, is our refill options. So on the beverage side, we do have refill in our Latin American businesses on water and soft drinks. And these can be used, can last for up to 25 uses, and are developed in collaboration with major beverage companies for use in these markets. And in fiscal year 24, our revenue from reusable packaging systems like these was approximately $14 million, representing 5,100 metric tonnes of production. We want to focus more on refill and reuse moving forward, but we're proud of that reuse that we have. And then the last thing I want to mention is our amscy. So when I was in my corporate role, I was helping a lot of our healthcare customers to write decarbonization roadmaps.

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Melissa Brice [00:17:54]:

And so a lot of healthcare customers use the blister packs, those packages where you have your pills. And so Amcor was able to come up with HDPE Amsky blister pack, which removed the PVC so it's vinyl free, and removed the aluminium, so you can get potentially up to a 60% reduction in emissions from moving from traditional blister packs to this vinyl and aluminium free. It's recyclable in the PE stream. We have APR critical guidance testing on that. It's compatible with the EU stream and it actually was a winner of the US plastic pack. Sustainable Packaging Innovation Award in the recyclability category.

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Saif Hameed [00:18:37]:

And Melissa, one of the reasons you mentioned the value of PVC and aluminium free. When I think of the importance of PVC free, I think of it from like a sort of a recycling process. PVC can often be a contaminant and can make it very hard to. I think, for example, pyrolysis is not possible to do if PVC is included. And then from an aluminium perspective, my understanding is that the more that you have layering within the packaging material, the more it becomes almost impossible to just take those things apart and recycle them. Am I right on this or is there anything you'd clarify?

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Melissa Brice [00:19:13]:

Nope, that's exactly right. PVC is a problematic material contaminant and recycling. And also with aluminium, yeah, if you have a certain percent of aluminium, I don't know the threshold, but a certain threshold of aluminium in the product, it can't be recycled in the plastic stream. So removal just makes that easier. I do believe we have some like fewer ply aluminium that could potentially still go through the plastic system for recycling. But amscy is a great technology and as I mentioned, it has a great carbon footprint reduction.

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Saif Hameed [00:19:46]:

And Melissa, a number of the innovations that you're talking about I assume would be readily understandable by the packaging team. On the brand side, for example, how do you think about owning the consumer narrative? And does Amcor really want to own any share of that consumer narrative directly or would you rather position the brand to own that well and enable the brand to tell that story? Is there an element where you kind of want to try and reshape how plastic is perceived in the consumer perception?

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Melissa Brice [00:20:15]:

Yes, we do leave a lot of it up to the brand owners and we educate the brand owners so we're providing them facts on plastic to help them tell the story. But we also are part of different organisations. As I mentioned, we have many partnerships where we're able to educate on plastic. So we also advocate as well for good legislation. So educating legislators on, you know, debunking the myths of plastic and showing them the benefits. Plastic, as you mentioned at the top of the podcast, plastic does serve a great purpose. It protects food, it preserves food, it reduces food waste. It also gets medicine to people that need it.

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Melissa Brice [00:20:59]:

So we believe at Amcor there's always a role for plastic. And so we just need to help educate consumers and customers about what role we play there and how we can help create more responsible packaging.

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Saif Hameed [00:21:13]:

And so Melissa, when you kind of think about, let's say bringing A new innovation to market just to go back a notch. A number of the innovations that you mentioned are likely the product of months and years work, collaboration with customers. And I'm sure there are many others also at an earlier stage of development. Is this usually originated by Amcor as like a concept and then you kind of go and pitch it or are there also situations where a customer comes to you and says this is something that we'd like to do or this is a problem we'd like to solve? Are you guys able to work with us on this and kind of workshop something that then can be prototyped and taken into production later? Like how does that process run?

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Melissa Brice [00:21:54]:

So we have four innovation centres globally where we're always inviting customers to come and we can do that rapid iteration. So work that might take months to do, we can do in two days. Because you're there in a room, you're focused. We have design teams that can iterate quickly, give feedback. So we love to bring customers into the innovation centre and sometimes they'll come to us with a need and we'll work together. But we also do invest millions of dollars a year in innovation in R and D. And the way our innovation team works is we kind of go by three different tenants of working. One is that focusing on talent and the environment and ensuring that the team and the environment are built around driving innovation.

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Melissa Brice [00:22:39]:

And so we want to build the right technical depth and curiosity so individuals and cross functional teams are able to recognise innovation, embrace future value in that, you know, kind of getting out of the, out of the box of like this is the way we've always done it, but trying to think of, okay, how can we really think outside of the box. Another one is market trends. So our R and D teams stay close with our marketing and commercial teams to understand trends so that we can make sure we're innovating to what consumers want and that we're prepared. So when they do come to us, we're ready to go. And then the last one is these customer relationships, as I kind of already mentioned, bringing them on site, but strong customer relationships across the organisation. So not just in R and D, but you know, interfacing with the procurement teams, sustainability commercial teams, so that we can use our strong relationship to build trust. Because oftentimes with innovation we're asking customers to invest in their sites, you know, you'll need new equipment potentially with innovation. So they're taking a risk, they're spending capital and investing in their future.

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Melissa Brice [00:23:46]:

And so we want to make sure that they they feel comfortable and they trust Amcor in that way.

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Saif Hameed [00:23:50]:

And Melissa, when you think about different customer categories, which, which category do you see as the most excited to collaborate with you on these topics? Like is it. You mentioned beverages, Is it, is it food and beverage, is it health care? Are there certain other sectors like, which would be the top one that you think is actually creating the most pull?

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Melissa Brice [00:24:10]:

From my experience, within the two years at Amcor, there's been a tonne of engagement from Healthcare. So all of our healthcare customers are having supplier summits on what they expect from us. They're engaging us co collaboration, decarbonization, roadmaps, asking us to switch to renewable electricity as soon as possible. So healthcare definitely and then food and beverage. So a lot of the consumer packaged good companies have monthly meetings with our customers to see how can, again, how can we get to renewable electricity, what alternative materials are out there putting together PCR glide paths. So those are the two segments I've had the most experience with in my limited time at Amcor.

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Saif Hameed [00:24:50]:

Fantastic, Melissa. This has been super, super exciting and just very educational to run through. I have one final question which we ask all our guests, which is if you think about our audience as sustainability professionals, just like you in many other businesses, what's the single most important piece of advice that you could give them? And let me maybe split that into two parts. Let's say that on the one hand you have a someone responsible for leading sustainable packaging innovation at a brand, basically so your kind of counterpart on the other side of the fence. And on the other hand you have someone in a very similar role to you, maybe in a different packaging company. I'd love to get the best piece of advice you could give to either of those two.

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Melissa Brice [00:25:30]:

Yeah, the top thing I think of is collaboration. For most companies, the majority of emissions and like Amcor for example, 70% of our emissions are scope three purchase goods and services. So if we want to make lasting true impact, we need to work up and down the supply chain. So we are actually starting at Amcor to create tripartite meetings where we bring together our customers and our suppliers and we all work together and say what kind of change do we need to see in the products on the market that will enable us up and down the supply chain to decarbon. And also when I was working on roadmaps with our customers on the corporate side, we said we need to collaborate. It's not just Amcor putting together a roadmap and delivering it to you, but let's work together. Where do you see the future of your business? Where do you want to innovate? What are your customers or sorry the consumers asking of you or your customers like the Walmarts of the world asking of you? And then we can all work together. So instead of being siloed in trying to decarbonize, we need to come together for a full value chain collaboration.

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Saif Hameed [00:26:35]:

Melissa, thank you so much. This has been such a fun episode and conversation. Really appreciate you joining us. I think it's going to be an interesting next several years on sustainability for everyone. What I'm finding really intriguing to see is just the dynamic play out across packaging and logistics. I'm finding those are the two areas that are most often the first areas to focus on for many of the brands that we work with. And I've just noticed Amcor being one of the forward leaning players in this from the packaging side. So really appreciate you having you on the show.

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Saif Hameed [00:27:06]:

Thank you so much and I hope we'll see you again soon.

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Melissa Brice [00:27:09]:

Thank you so much for the opportunity and it's been a joy to talk to you.

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