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In the past two years, several CPGs have announced deadlines to slash their use of virgin plastic in packaging and shift toward more earth-friendly options over the next few decades, including Keurig Dr Pepper, PepsiCo and Mondelēz. Recycled plastic and paper have proven to be two of the more popular alternatives. But as price and supply volatility continue to impact the packaging industry, one question keeps emerging: Is there a clear pathway in the short term to hitting these goals, or are they just pipe dreams?
A mix of factors threaten to complicate CPGs' timelines, including the pandemic’s scrambling of consumer buying behavior and material supply chains, the existing recycling framework in the U.S., as well as recent developments such as the war in Ukraine. This is even as pressure continues to mount for the industry to take accountability over the pollution caused by food and beverage packaging.
“There have been a lot of commitments in terms of using recycled content and packaging, and the goals that were established were set without really a fundamental base of the means to do that,” said Robin Waters, director of plastics planning and analysis, IHS Markit, in an interview late last year.
To understand why meeting these commitments may prove difficult, it helps to examine the price and supply swings that have rippled across virgin and reclaimed plastic resin over the past two years.
The story begins with virgin plastic, resins that are newly created from oil or, as is mostly the case in North America, natural gas. Food manufacturers are under pressure to reduce their use of virgin plastic in packaging, and for good reason. A 2018 study cited by the Association of Plastic Recyclers found recycled plastic resin uses anywhere from 79% to 88% less energy to produce as virgin resin, depending on the type.
At different points over the past two years, virgin plastic resin has been considerably more or less expensive than reclaimed plastic as pandemic forces stressed their respective supply chains. And with each shift in the price trend, the timeline to hit goals for cutting virgin plastic also changes.
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“There have been a lot of commitments in terms of using recycled content and packaging, and the goals that were established were...