Advancements in material science are playing an increasingly critical role in shaping modern packaging solutions. Innovation is leading chemicals and materials suppliers to work with brand owners and packaging converters alike to help them satisfy both evolving consumer demands and regulatory pressures as they seek to differentiate themselves from the competition.
Against that backdrop, multi-substrate as well as single-substrate packaging companies are increasingly looking to their raw materials inputs suppliers to provide solutions that can help change/improve the sustainability profile of the packaging substrate, act as alternatives to inputs with health and safety risks, and improve substrate functionality in ways that provide the consumer with a better experience.
For chemicals and materials firms that participate in the packaging value chain, being at the forefront of these trends means providing customers with opportunities to differentiate through adoption of those firms’ materials, technology and overall innovation.
For investors in this space, numerous innovations in the packaging chemicals and materials inputs ecosystem are creating trends toward premium prices, outsized growth and market share capture, and superior returns due to their value-add along these trends.
Three trends
Indeed, these three broad macro trends — sustainability, safety and functionality — are driving innovation and investment across packaging substrates, inks, coatings, adhesives and other inputs categories, as discussed below:
- Sustainability (inputs that reduce the environmental impact of packaging) — As sustainability is now increasingly important to brand owners, chemical and materials inputs that enable higher packaging recyclability and biodegradability, are bio-based, produce lower greenhouse gas emissions through the product life cycle or result in overall material use reduction are expected to be more compelling. For example:
- Polyethylene terephthalate-based packaging products are seen as more recyclable than polyvinyl chloride-based packaging products, which comprise a complex mixture of additives.
- Naturally sourced coatings and films such as soy-based ink, starch adhesives and biopolymers are supporting brand owner sustainability progress.
- Silicone coatings are increasingly being used in liner-less labels due to their sustainability profile in eliminating unnecessary materials (e.g., release liners) in select applications.
- Safety (nontoxic or lower-toxicity input alternatives) — Ensuring packaging inputs do not produce adverse health/environmental impacts is a top priority for brand owners. Inputs containing phenol (such as polycarbonate films), for example, are being phased out of use due to concerns about their toxicity and being replaced by biopolymer coatings, which are derived from renewable resources like cornstarch or sugarcane; per- and polyfluoroalkyl substances (PFAS), chlorine, chloride and phthalates are being replaced as well. In the U.S., model toxics in packaging have also been directly regulated by, for example, banning the sale of packaging that contains PFAS and limiting the concentration of phthalates, lead, cadmium, mercury and chromium.
- Functionality (inputs that enable higher performance) — Increasing packaging functionality and performance around higher endurance, longer shelf life and convenience is a key area of innovation for inputs suppliers. As a result, technologies such as barrier films and coatings that enable higher moisture, ultraviolet and chemical resistance are expected to gain traction going forward. Another example where higher performance is driving premium value to inputs suppliers is in adhesives; acrylic adhesives for shipping labels are benefiting from ecommerce growth along with corrugated packaging formats.
Whether you’re manufacturing the chemical and material inputs for packaging or investing in the market, please look forward to our upcoming deep-dive insights into how sustainability goals are increasingly impacting the mix of packaging inputs. We’ll also cover the impact of consumer and regulatory health and safety concerns for packaging inputs, as well as our views on the innovation driving increased functionality of packaging inputs.
For more information, please contact us.
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