The Canmaker Summit 2018 – Venice
The canmaking industry should heed a warning from one of the world’s leading soft drinks firms that criticising competing packaging materials is not the route to growth. Mark McCord reports
Sustainability dominated this year’s Canmaker Summit, with speakers from leading producers and suppliers urging delegates to seize on worsening publicity surrounding plastic waste to promote metal packaging.
The Summit, held in Venice in October, was told that bad news about plastics pollution could help burnish the image of canmaking at a time when surging demand from fillers is stoking healthy growth in the industry.
Speakers at the two-day event were told they could turn the tide of public opinion in favour of metal by pressing the message to conservation-aware consumers that steel and aluminium containers are fully recyclable, green products.
But industry leaders were left with a warning from one of the world’s biggest soft drinks firms that canmakers would be caught up in legislation to curtail plastics use.
Upbeat message from Italy
Italy-based metal crown manufacturer Pelliconi built its processes and sourced its materials with sustainability in mind, chief executive Marco Checchi said in an upbeat opening address. Its adoption of the ISO 50001 energy management standard showed that thinking green had a double benefit.
It’s “not only a cost saving but a saving for our planet”, Checchi said.
LED lighting had enabled Pelliconi to cut its energy needs enough to spare the equivalent of 18,000 trees from power station furnaces and other measures had reduced the firm’s equivalent output of the greenhouse gas carbon dioxide by 366,000kg.
The initiative has been spearheaded by a new energy manager who introduced energy-saving measures that meet the United Nations Sustainable Development Goals. They include:
• Energy-efficient incineration units on coating line ovens;
• Closed-loop cooling plants, which recycle 95 per cent of water used on production lines;
• Adiabatic cooling systems that save 51,000 cubic metres of water annually;
• Improved transportation strategies, using intermodal shipping;
• UV technology for curing decoration, which mean ovens can use lower temperatures.
Noting that 80 per cent of all metal ever produced is still in existence, Checchi stressed that metal is endlessly recyclable but said “we have to make it even more sustainable”.
Meeting that aim, Pelliconi’s latest Smart Crown is made of 0.18mm-gauge steel and produces 15 per cent less carbon dioxide in its manufacture than regular 0.22mm-gauge crowns. Checchi also unveiled the Flower Cap – so-called because of its undulating edge – which is made from even less steel because of its 0.12mm gauge. The smooth-folded pry-off cap enables undistorted branding on its sides and its rolled margins help reduce rusting.
“The reduced environmental impact and the complete interchangeability with standard caps makes Flower Cap green and eco-friendly,” Checchi said.
Sustainability and innovation go hand in hand
Design and production innovation will help drive the industry to greater sustainability and commercial success, said Dave May, vice chairman of US-based Roeslein, which manages projects which include the building of canmaking plants. In an optimistic market overview, May highlighted the importance of boosting recycling rates to meeting sustainability targets, a common theme at this year’s Summit.
“We’ve done a great job over the years of reducing metal and reducing costs and we need to continue,” he said. If the industry could increase recycling towards 80 and 90 per cent, “it will have a dramatic effect”.
May said the public-relations crisis blighting plastics provided canmakers with an opportunity to promote a global industry that is set to grow at 3 per cent a year until 2021. That would be driven by a doubling of demand for soft drinks and beer in the next decade, he said. Growth would be further fanned by the increasing popularity of canned water, wine and juices and new products, including cannabis drinks.
“That should make us feel good,” May said.
Nevertheless, challenges abound. Fillers such as Coca-Cola and Anheuser-Busch InBev are always seeking to cut costs and the emergence of independent makers and new fillers, such as craft brewers, was intensifying competition and disrupting production processes with demands for smaller runs and shorter supply chains.
There’s also no guarantee that PET’s travails will last, he warned, especially if biodegradable plastics are developed. Consequently, canmakers have to accept there will be diversity in the product mix used by their customers.
“All fillers are going to have diversity – let’s not be naive and think they’ll all end up in cans, though we’d all like them to be.”
Sustainability must go hand-in-hand with innovation and uppermost in makers’ minds ought to be flexibility in production, with digital printing playing a role. The industry must also address resealability, produce a greater variety of drinks can shapes and sizes, and increase the use of coated metal to boost production speeds.
“Teamwork and collaboration are important – the more we understand each other and the more we work together, the more we can help this industry be more sustainable and more successful,” he concluded.
Recycling starts with the consumer
Sharing is also a watchword for Alexis Van Maercke, secretary general of industry group The Association of European Producers of Steel for Packaging (APEAL). The Brussels-based organisation has been busy compiling a best-practices report outlining its strategy towards meeting the EU’s circular-economy sustainability targets.
“If we want to further increase recycling rates we need a holistic approach – that means we have to improve collection, we should share best practice,” he told delegates.
The APEAL chief said the steel packaging industry “fits very well” into the EU’s waste legislation passed in May. It enshrines recycling of all packaging materials in EU law, and the target for steel reclamation – 80 per cent by 2030 – was already within easy reach of the industry’s current 79 per cent rate, Van Maercke said.
Recycling rates can be increased with better sorting at source, he said, by establishing new guidelines on reporting transparency and by raising public awareness. Its global “Vote Steel” campaign was designed to encourage greater public engagement with recycling.
“It all starts with the consumer,” Van Maercke said.
Additionally, APEAL has lobbied members of the European Parliament to recognise the contributions of cans in reducing food waste by extending the shelf life and hygiene of contents.
A passive approach to tinplate manufacture
Tata Steel’s head of technical and packaging in Europe, Simon Edwards, outlined the long-term industry-wide effort coordinated by APEAL to find an alternative to chrome-6 in the tinplate passivation process. He said much research, development and expense had gone into finding a way to eliminate the potentially-toxic chemical from manufacturing operations.
Results have been encouraging, but Edwards stressed that time was not on industry’s side: regulations outlawing the process had already been passed and an application to delay implementation until September 2021 had yet to be approved.
“If we get it wrong, the consequences can be huge for the industry,” he said. “This is a call for engagement between the tinplate producers and the canmakers and lacquer suppliers – that we need to work closely together to make sure that we get a joined up view.”
Hope for harmonisation of safety rules in Europe
Co-ordinated thinking is something lacking when it comes to European regulations on food-contact materials safety, said Ulrich Nehring, an authority on food chemistry and a member of the Metal Packaging Europe industry group.
Describing himself as “the Grinch” for the downbeat message he offered delegates, Nehring said a patchwork of nation-based rules on packaging safety was difficult to navigate and would impose barriers on trade for the next few years.
“It’s really sad that different parts of the [European] Commission don’t talk to each other and don’t really know each other – all the advantages of metal packaging we’ve heard today are not regarded by those who are talking about the safety of the products.”
Behind-the-scenes talks offered hope for harmonisation, he said. The Joint Research Centre of the European Commission’s scrutiny of streamlining packaging regulations had the potential to be liberating. Encouragingly, it’s drawn up a roadmap for action. Less encouragingly, non-government organisations (NGOs) and enforcement agencies are agitating to limit the say of industry, believing it to be too slow to deal with new products and innovations.
“Industry’s position is being questioned more and more; NGOs clearly don’t want industry at the table,” Nehring said. “The Commission is not willing to accept this but it could be a question of time – it depends on how the industry fights for its position and participation.”
A bright future for metal packaging
David Wall, chief executive of Ardagh Group’s metal packaging division, returned the Summit to the subject of sustainability with a call on delegates to get behind the industry’s campaign logo ‘Metal Recycles Forever’.
In a bullish delivery that pulled no punches, Wall pushed the message that plastic was not the wonder material it had first been thought but would leave a dark legacy of polluting waste.
China’s decision to halt imports of Western waste plastics had highlighted the starkness of the problem to Europe, the world’s second largest producer. Simultaneously, consumer attitudes were hardening against plastics thanks to grim images of trash-entangled sea life on a popular TV wildlife show and imaginative online publicity films.
“No one understood the environmental cost of plastic – we’re now seeing that come home to roost,” Wall said.
Evoking a ‘War on Plastic’, Wall said metal offered a tantalising future of recyclability and reduced food waste. Innovation and cooperation would be required to drive the message home, but he was confident that consumers would eventually be won over. “Metal packaging has a very bright future,” he concluded.
End-of-life recycling is key, not recycled content
A final thought on sustainability came from Raphael Thevenin, vice president of sales and marketing at Constellium. The top-rung manufacturer of aluminium products for the aerospace, automotive and packaging industries has a vested interest in promoting the green credentials of metal. Unfortunately, the message isn’t being expressed effectively, Thevenin said.
“There is a strong focus on recycled contents, but that’s not the right metric; we need to focus on end-of-life recycling,” he said.
Unlike plastics, which can only be reused a limited number of times, metal can be recycled over and over again – and that’s its unique selling point, Thevenin said. That means the amount of recycled content in a product was almost meaningless, he argued. A large amount of recycled content may appear impressive to consumers, but it’s an unreliable indication of the product’s sustainability.
That’s especially so considering that the anticipated growth in demand for metal products will mean greater volumes of virgin metal will be needed.
Thevenin echoed calls for better recycling rates, especially in the US, where recovery volumes are in decline. He also said the industry should improve sorting techniques at recycling points, encourage closed-loop reuse and spur innovation in alloys.
Figures from around the world show a strong correlation between high recycling rates and low carbon dioxide footprints, he said.
“We need to get across the message that every can counts,” he said.
A stark warning for canmakers
If delegates at the Canmaker Summit had come away from Day One with a sense of metal’s invincibility, Day Two offered a sobering alternative outlook. Hans van Bochove, vice-president of public affairs in Europe for Coca-Cola, one of the world’s biggest drinks producers, told the Summit that plastics were not only here to stay, their fate in the war on waste was tied to that of metals.
Declaring himself “material neutral” and not in the business of “demonisation of any material”, Bochove acknowledged the public relations nightmare that plastic – and Coca-Cola – was going through. But as a “continuous drumbeat of NGO and media pressure” spurred legislators to act, Bochove said there was a stark warning for canmakers.
“This is a packaging supply-chain issue, not just plastics,” he said. “Whether you like it or not your [metal] packaging is very closely tied to plastics – what happens to plastics [in legislation] will happen to your cans.”
Coca-Cola and its bottles had become the whipping boy of a campaign against single-use plastics, Bochove said, illustrating the point with slides of the company’s logo used unflatteringly in environmental campaign ads. The pressure could not be ignored and Coca-Cola had to act, he said.
Coca-Cola and other producers face legislation forcing them to take more responsibility for the collection and recycling of their packaging.
“The need for collaboration has never been higher,” Bochove said, exhorting delegates to join efforts to shape legislation in a way that’s effective and workable for the industry. For its part, Coca-Cola is working with the European packaging association Europen.
Having put together a number of suggestions to improve recycling and reduce waste, Bochove said collection of post-use packaging was key to bringing the two sides together and that would mean more intervention by producers.
“Something has to happen, that’s clear,” he concluded.
Are canmakers good stewards of capital?
Tough sustainability requirements could play to canmakers’ strengths and benefit market sentiment towards them. But he questioned whether or not that would be enough to overcome investors’ bearish outlook on the sector.
That was the opinion of Mark Wilde, packaging analyst at US-based BMO Capital Markets, who said the popularity of canmakers had dimmed in recent years as they’d been slow to respond to market changes.
The larger, publicly-traded players, such as Ball and Crown, had seen their share prices decline recently after almost a decade of outperforming the broader market. Forecasts of slowing growth in the US, especially in the food-packaging sector, and a series of questionable takeovers typified by Crown’s acquisition of Signode had raised concerns that the companies were no longer good stewards of capital.
Investors have also been spooked by the industry’s muted response to increased competition, especially in the drinks sector, where the incumbents were losing market share amid increased product diversification.
Shareholders are asking “Are competitors still financially rational?” Wilde told delegates. Crown’s Signode deal had been interpreted as a hint that the industry was looking to move away from dependable consumer markets, he said, potentially ushering increased earnings volatility.
There are signs of optimism. Emerging markets showed huge growth potential and the proliferation of new can shapes and sizes offered potential new revenue streams. But Wilde said the industry could not let its guard down on innovation, lest new, smaller competitors eat further into market share.
“Think about what happened to the big three automakers in the US – they lost their market to competitors,” he warned. “Packaging is always going to be around – what format that takes will be open to question.”
Pressure now to prove all coatings are safe
If innovation was changing quickly, it was nothing compared with the ever-reshaping environment for can coatings, said Charles Turner, global director of product stewardship for US-based coatings manufacture PPG.
Following campaigns to outlaw BPA used in epoxy-phenolic coatings, NGOs and legislators are now pressuring manufacturers to prove that all coatings are safe. The Switzerland-based executive said new approaches had been proposed for testing can coatings that emphasised analysis of substances that migrate into food.
“What can we do as an industry to underpin those safety assessments?” he asked. We need to “make better-informed decisions”.
Turner said producers were proposing to pre-screen substances used in new coatings and run extensive searches of them on toxicology registries and databases worldwide. Additionally, they would run first-order risk assessments on start substances – the materials that go into a can’s coating, and the stage of coating manufacture that had most concerned NGOs.
The toughest challenge, however, would be limiting and ensuring the safety of substances that could migrate into canned products. It was the most important measure, Turner said, because these were the substances that could be ingested by consumers. Finding the most suitable tests and testing equipment would be tough.
“It’s painful but we’re going to have to do it,” Turner said. “We need to do more as an industry and certainly as coatings producers, to help people make these assessments.”