Another big change in the packaging sector is the push toward "green" packaging, which means alternative materials, and a drive toward source reduction which requires smaller, lighter-weight packaging that can be easily recycled or that is biodegradable or compostable. Some alternative materials that are causing excitement include polylactic acid or PLA, produced by NatureWorks LLC, a company that converts corn starch in to a biodegradable plastic for use in packaging.
Cereplast, Inc. and MeadWestvaco Corporation teamed up last year to develop a fully renewable and biodegradable (or compostable) extrusion-coated paperboard product made with Cereplast resins that have a PLA base from NatureWorks. The paperboard product will be used by Solo Cup to manufacture into cups. The application will answer consumer interest in compostable food service products that are made from renewable resources.
Metabolix, Inc., a company developing and commercializing environmentally sustainable and totally biodegradable natural plastic, announced in December that it had received permits for a commercial manufacturing facility designed to produce 110 million pounds of biodegradable natural plastic annually. The facility is being constructed in Clinton, Iowa, as part of a joint venture agreement with Archer Daniels Midland. The natural plastic commercial manufacturing facility will be located adjacent to ADM's corn wet mill in Clinton, and will utilize starch from the mill's existing corn grind capacity as raw material. Commercial production of natural plastic is expected to begin in 2008.
Green packaging is catching on big with major retailers eager to reduce the impact of packaging in the environment. "The essence of sustainable packaging is going beyond the biodegradable product and bringing the product cycle full circle to a true `cradle-to-cradle' system," according a report issued by Piper Jaffray & Co., a financial services and M&A consultancy. "The prominence of sustainable packaging has grown tremendously in the food and beverage industry because of consumer demand and the growing awareness in these markets."
Piper Jaffray reports that in 2005, shipments of sustainable packaging for the food and beverage industry, the largest segment of sustainable packaging, exceeded $37 billion, and is expected to surpass $42 billion by 2010: "Sustainable plastics are the fastest-growing environmentally friendly material of packaging as demand for both rigid and flexible forms continues to increase, and plastics continue to take market share away from glass."