How Sustainable Packaging Can Boost your Beverage Brand

Tuesday, May 28th, 2024

The article discusses the shift towards sustainable packaging in the APAC beverage industry, emphasising eco-friendly materials and circular economy principles. By Albert Del Fonso, Packaging Portfolio Director at Tetra Pak Malaysia, Singapore, Philippines & Indonesia

The Asia-Pacific (APAC) beverage industry is experiencing explosive growth, fuelled by a confluence of macroeconomic factors. A burgeoning middle class, rising disposable incomes, and on-go-lifestyle have paved the way for convenient food and beverage options.

According to a 2023 report by Mordor Intelligence, the APAC beverage market is expected to reach a staggering USD 147 billion by 2029, with a Compound Annual Growth Rate (CAGR) exceeding 8.3 percent.

This exponential growth presents a unique opportunity and challenge for the F&B industry – How do we cater to this surge in consumer demands while being responsible to the environments we operate in?

In the face of APAC’s growth trajectory, traditional “take-make-dispose” packaging models for beverages simply will not suffice. The industry will need to look for innovative and integrated packaging solutions that improve product shelf life and ease logistical burdens while prioritising the decarbonisation of food systems.

This throws light to the possible switch to sustainable packaging materials in the mass F&B space as an alternative to conventional materials and what this means for manufacturers and consumers.

Driving the Circular Economy with Sustainable Packaging Solutions
The use of eco-friendly materials for packaging has been an on-going conversation, with materials like bamboo and other derivatives often used by F&B vendors to drive product attractiveness. However, the conversation around sustainable packaging runs much deeper.

Sustainable packaging, when looked upon at an industrial scale, refers to materials that have the most negligible environmental impact through sourcing, manufacturing, production, shipping, disposal, and recycling.

When selecting sustainable materials, manufacturers will need to consider the entire lifecycle of the final product design, from material selection to post-consumer use.

This entails utilising renewable elements whenever possible, allowing for separation and to recycle the different components. For instance, repurposing the recycled components into other items of utility.

By adopting sustainable packaging materials, beverage brands can minimise their environmental footprint and can participate in the larger conversations around the circular economy which is fast gaining attention in Asia Pacific.

In essence, the circular economy refers to a closed system that aims to keep resources flowing through a systemic loop for as long as possible. As traditional packaging industries are known to generate bulk waste that cause environmental impact, the introduction of sustainable packaging materials can reverse that and key to a sustainable future for our planet and its people.

Applied to the beverage packaging industry, this translates to utilising materials like sustainably sourced paperboard as a renewable alternative.

This reduces reliance on finite resources, promotes responsible sourcing practices and the development of packaging solutions that can be easily recycled after use.

Carton packages for beverages are a prime example of how sustainable packaging material can feed into the circular economy loop.

Manufacturers using carton packages can convert the extracted fibres into high quality recycle kraft papers that can be turned into papers, boxes and more, and the used non-fibre component of carton packages can be recycled into PolyAl panel boards and roofing sheets which is a high-performance recycled material suitable for construction and furniture making.

Not only does this present a solution to waste management and recycling, but also demonstrates the commercial viabilities of such systems, giving manufacturers a further incentive to consider alternative packaging materials for long term benefits.

Of course, the success of the circular economy for APAC’s beverage industry hinges on a collaborative effort between various stakeholders.

This includes forward thinking governments who are able to provide the necessary regulatory frameworks and incentives to accelerate sustainable practices and manufacturers or industry players who can work together to build the right ecosystems for large scale industry collaborations across sorting, collecting, and recycling of sustainable packaging materials.

By adopting sustainable packaging solutions that prioritise renewability, recyclability and reusability, beverage brands can demonstrate their commitment to the circular economy, fostering trust and loyalty among various stakeholders, which in turn translates to a key competitive advantage.

The Eco-Conscious Consumer and the Need for Innovation
Consumers in APAC are no longer simply concerned with convenience and price. The next wave of eco-conscious consumers demands transparency, credibility, and planet positive impacts from the brands they choose.

A 2023 Tetra Pak Trendipedia report revealed that a staggering 70 percent of APAC consumers believe that if a food or beverage product is not sustainable for the planet, it cannot be considered healthy for the individual.

Furthermore, a 2023 Nielsen survey found that 83 percent of consumers globally are willing to pay more for sustainable products as they feel they are contributing to a larger global movement through their purchases.

As consumers actively seek brands that are environmentally responsible, the shift to sustainable packaging for beverage brands can lead to positive brand perceptions, a higher market share compared to other players and unlock new audiences.

In fact, the Department of Family and Consumer Sciences in Indonesia found that a brand’s level of environmental consciousness plays a significant role in terms of word-of-mouth marketing its consumer contributes toward.

The rise of the eco-conscious consumer serves as a potent force driving innovation in the F&B industry.

As consumers choose beverage packaging formats that minimise environmental impact, there is greater need within the F&B industry to experiment and innovate with packaging formats that are not only sustainable but also enhance product quality and shelf life.

This scale of innovation goes beyond material with design optimisation forming a cornerstone to the packaging equation. Optimising packaging design allows brands to minimise material usage while maintaining product integrity and functionality.

For instance, lightweighting techniques can reduce the amount of material required for beverage cartons, leading to a lower environmental footprint throughout the production process. By embracing these principles, beverage brands can significantly reduce their carbon footprint throughout the beverage lifecycle.

From sourcing materials to production to shelves and ultimately, post-consumer waste management, a sustainable approach minimises environmental impact, contributing to a more sustainable future for the industry.

What This Means for Manufacturers and the Beverage Industry
Sustainable packaging presents a significant opportunity for product innovation and customer engagement for beverage manufacturers. Brands can leverage their sustainable practices to differentiate themselves in a crowded market and attract a growing segment of environmentally conscious consumers.

Sustainable packaging also entails creating long-term value for both brands and consumers. Utilising renewable, low-carbon materials align with the growing consumer preferences and ensures responsible resource utilisation which in turn can enhance operational efficiencies and achieve supply chain resilience, is a critical aspect of a circular economy.

Embracing circular economy principles presents opportunities for innovation, brand resilience, and long-term value creation. By working together, we can realise the full potential of sustainable packaging, mitigating environmental impact while creating a more resilient and prosperous industry.

The journey towards sustainability is not without challenges, but with concerted action, the APAC beverage industry can lead the way towards a greener, more sustainable future.