Amazon’s flexible packaging move signals plastics demand trend, recycle upset

Amazon’s decision to move to lightweight flexible plastic mailers over its traditional cardboard boxes will likely set a trend for the rest of the industry, according to an industry report.

“As the market leader in the U.S. e-commerce sector, Amazon is in a particularly powerful position to shape decisions on packaging preferences,” Wood Mackenzie Chemicals Research Associate, Brendan Connell-French said.

Amazon now accounts for about half of all e-commerce in the U.S., according to 2018 analysis by research firm eMarketer.

The retail giant generated sales of over $250 billion in 2018, according to Wood Mackenzie Chemicals’ recent ‘Q1 2019 Flexible Packaging Global Market Overview’ report.

Few other companies have such industry influence to impact large-scale packaging trends and demand. Putting this into context, the U.S. e-commerce market accounts for 12% of all retail sales and is expected to grow to around 17% by 2022, according to Wood Mackenzie.

“Amazon, by far the largest shipper of packaged goods in North America, will likely set a trend for the rest of the industry; although one that will probably be adopted slowly and steadily. Crucially, the move signals a departure from a traditionally conservative packaging industry in North America that is often hesitant to adopt wider and more varied flexible packaging applications,” added Connell-French.

Flexible plastics packaging

The Global Flexible Plastic Packaging Market is expected to exceed more than $130.05 Billion by 2022, according to MarketWatch.

Flexible plastics are a classification of plastics that are thin, light, and effortlessly stretchable yet hold the obstruction properties and tear and cut safe attributes, which is the reason they are utilized to pack things.

Raw materials such as plastic films, aluminum foil, paper, and bioplastic are used for flexible packaging. Plastic films are further categorized into polyethylene, polypropylene, polyvinyl chloride, polyester film, polyamide, polystyrene and polycarbonate.

Plastics production has surged in the U.S. since 2010, a result of cheap feedstock natural gas liquids. The American Chemistry Council (ACC) is tracking 700 new U.S. investments in plastic products manufacturing. 

Amazon cites several environmental benefits to back their decision, including a reduced consumption of energy and natural resources during production, reduced CO2 emissions, and fewer vehicles required during transportation.

“The usage of lightweight materials results in less end-of-life waste and even with low recycling rates, flexible packaging often generates less material losses than alternatives,” Connell-French said.

Amazon is also currently working on a cushioned mailer (typically a paper// polyethylene laminate) that is fully recyclable in paper recycling streams, reinforcing its new direction away from carton board. The company confirmed that, after continually working to improve packaging options, it reduced global packaging waste by 20% in 2018.

Amazon packaging future

In terms of converted primary packaging, Amazon represents a major potential vehicle for growth in flexible packaging for food.

With both its $13.7 billion acquisition of Whole Foods in 2017 and subsequent sustained push into online grocery sales, the company has signaled its intention to ramp up its involvement in the U.S. food retail market as it has with other sectors.

Amazon currently controls 30% of online grocery spending in the U.S. - accounting for around 5.5% of all grocery sales.

In addition to the estimated 2% market share of in-store sales that Amazon controls through Whole Foods, the company is also planning to establish a new chain of retail options as it diversifies its options in the market.

These avenues will rely upon an increasing consumption of flexible packaging within the U.S. as Amazon pushes further into food applications, with its food and beverage category expected to grow more than 40% this year.

“Wood Mackenzie Chemicals estimates the U.S. converted flexible packaging for all food end-use sectors is valued at approximately $16 billion for 2018, so the opportunity for Amazon to lead the way is massive,” Connell-French said.

Recycle Problem

Amazon has been reducing the portion of shipments it puts in cardboard boxes in favor of lighter plastic mailers over the past year, which allows it to pack more packages into trucks and planes.

The plastic packaging can be better for the environment since it takes up less space, thereby making shipping more efficient.

However, the Amazon packaging suffers from the same problems as plastic bags, which are not sortable in recycling system and get caught in the machinery.

First Recycle Solution

Image: TotalRecyle

J.P. Mascaro & Sons will test a single-stream curbside recycling program for flexible plastic at its TotalRecycle facility in Pennsylvania over the next two years.

Once testing is complete and the company begins accepting the material, J.P. Mascaro’s TotalRecycle plant will be the only company in the nation recycling the material.

Flexible plastic packaging — which includes shopping bags, bread bags, pet food bags, tee-shirt bags, spouted food pouches, chip bags, and product overwrap— is not currently recycled and typically ends up in landfills.

Yet, it is the fastest growing segment of consumer packaging today, introducing 12 billion pounds of the material into the market for consumer use every year, according to Resource Recycling Systems (RRS).

The increased usage is owed to the fact that flexible plastic is durable, less costly to manufacture, lighter and easier to transport.

However, the machinery commonly used to sort recyclables cannot distinguish between, for example, flat paper and flattened flexible plastic drink pouches. Mailing labels on the plastic packaging add to the issues.

The new machinery at the pilot project can detect and separate flexible plastic from other recyclables such as glass, paper, cardboard, metal, tin, electronics and more.

The pilot project is a joint effort with a group called Materials Recovery for the Future, a research collaborative of leading brands, manufacturers and packaging companies aiming to increase the recovery and recycling of flexible plastic.

The plant is expected to produce 3,100 tons of recycled flexible plastic, or R-Flex, per year, according to RRS.

By Heather Doyle