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    Features

    Led by Online Shopping, Packaging Ink Market is Growing in Europe

    The positive outlook for packaging is being blurred by uncertainties about which types of packaging will be most in-demand over the next few years.

    Led by Online Shopping, Packaging Ink Market is Growing in Europe
    Photo courtesy of Siegwerk Druckfarben.
    Sean Milmo, European Editor07.27.20
    Compared with other printing ink segments in the region, Europe’s packaging inks businesses have been looking likely to emerge from the coronavirus (COVID-19) pandemic the least badly affected by the recession resulting from the economic upheavals of a two to three month lockdown.

    Further, the future prospects for the European packaging sector have been considered by analysts to be brighter than the region’s other main printing ink markets.

    However, the positive outlook for packaging is being blurred by considerable uncertainties about which types of packaging will be most in-demand over the next few years. In particular, there are doubts about whether increases in packaging consumption in terms of volume will be matched by similar rises by value, and how this possible gap between volume and value will reverberate on packaging ink sales.

    This apprehension about trends in value stems from the dramatic acceleration in the switch from traditional retail shopping to online purchasing during the COVID lockdown - at least for consumer goods, which dominates the packaging market as a whole.

    The biggest shift to e-commerce has been on the online sites of major retail chains, particularly supermarkets, with some of them recording rises in e-commerce sales of more than tenfold during the stay-at-home restrictions.

    Shift to Online Shopping Quickens

    When the lockdowns were eased in most European countries in June, when shops not selling essential goods like foods and groceries, medicines and health and personal care products were able to reopen, there were clear signs that most shoppers were continuing to do most of their purchasing online.

    This raised questions among analysts about the post-COVID survival of retail chains in their present format, with the threat of large shopping malls having to close permanently.

    “The shift to online shopping has been exponential,” said Jonathan Flynn, retail practice consultant at UK-based Odgers Interim consultancy. “The impact on the sector has been immediate, raising the question as to whether this will be the final nail in the coffin for (town center shopping) as we know it.

    “(Its) future existence is becoming increasingly precarious,” he added. “As retailers increase investment in online platforms and operations, there will be a reevaluation of running costly bricks and mortar storefronts.”

    The occurrence of a second wave of the pandemic, which is widely expected by medical experts, would put even well-established retailers under a lot of pressure while consumers would become more reliant on online purchases.

    For ink producers and other companies in the packaging supply chain, the more rapid expansion of e-commerce in consumer markets will mean more use of paper and board packaging. Since online paper and board packaging tends to carry less print than in packaging for the conventional retail market, less ink is consumed per packaging unit. Furthermore, there tend to be fewer opportunities for the application of premium inks in the e-commerce segment.

    Brand owners and packaging companies are trying to encourage ink makers to help improve the quality of printing in the sector, particularly for corrugated board, which now accounts for the vast majority of online packaging.

    More openings are likely to be created for more sophisticated inks in e-commerce shopping, while there is predicted to be more demand for inkjet printing to meet the demand for online personalization in packaging.

    “Online shopping was growing at the expense of (retail chain) stores well before COVID-19,” said Peter Lockley, president of INX Europe. “Unlike the impact of digitization on the publication inks sector, we don’t necessarily expect it to reduce the demand for premium packaging; just look at the number of YouTube ‘unboxing’ videos which emphasize the tactile experience of opening the package for many products. We’ll see a changing mix, but not one that makes me concerned for
    the future.”

    Sustainability Interest Heightens

    In the post-COVID period, probably the biggest challenge for ink makers will be posed by a more committed attitude among European consumers and politicians to the importance of sustainability.

    The pandemic is making large numbers of Europeans even more concerned about safety and hygiene, which is being extended into a stronger awareness for more environmental protection. They want to see these concerns reflected in the design and use of packaging and its materials.

    “Sustainability is not simply a buzzword that is going to disappear in a year or two, despite the disruption brought by the COVID-19 pandemic,” said Deanna Klemesrud, Flint Group’s global marketing director, brand and promotion. “It is now at the heart of every industry and sector globally and is what will determine the future success of our industry. When the global economy begins to recuperate from the virus’s effects, our industry has a unique opportunity to ensure sustainable packaging forms an irreplaceable part of the recovery.”

    Under its COVID recovery plan announced in May, which is backed by €750 billion ($848 billion) in grants and loans for its 27 member states, the European Union is supporting the creation and expansion of green, environmentally friendly projects. These include the establishment of a circular economy, which will aim by 2030 to achieve a common EU target of 70% recycling of packaging waste.

    Of the two main packaging materials, paper and board have been set the highest recycling target of 85% by 2030 and plastics the second-lowest at 55%. But plastics have the toughest one because it could only achieve a recycling level of 41% in 2016, according to the latest figures published by the European Commission, the
    EU executive.

    The Commission also wants all plastics packaging to be recyclable by 2030, even though the recycling capacity might not be available by then to process all packaging.

    The Challenge of Deinking

    One key requirement of recyclability is the separation of ink from its substrates. It is a technology that is now well establishing for the deinking of paper packaging and other paper products but not yet for plastics.

    Some ink companies are already working on the challenge of developing inks which can be detached easily and safely from plastic packaging substrates for the recycling process. INX announced in April the introduction of a washable label ink for the recycling of PET bottles with shrink sleeves.

    “INX welcomes the development of the circular economy,’’ said Lockley. “The challenges include combining effective sustainability characteristics with a top-notch print performance at a price point which still makes sense for our customers. One example is our recently launched washable inks for the label market, which can contribute significantly to the recyclability of PET bottles.”

    Siegwerk and plastics packaging waste recycling specialist APK AG, which have jointly been developing a solvent-based deinking process, completed deinking trials on low-density polyethylene films in May.

    “We consider the entire life cycle of the packaging - from design, to use phase and finally recycling,” said Ralf Leineweber, Siegwerk’s head of global technology development. “We are very pleased that printing inks from Siegwerk have proven to be suitable for solvent-based recycling processes. We have mastered a much-discussed challenge for efficient recycling of flexible packaging.”

    Doubts about the future in a European circular economy of packaging and other plastic products, particularly single-use ones which are considered most responsible for plastics pollution on beaches and in marine waters, have yet to be resolved. The Commission, which is responsible for drawing up EU legislation, has been consulting on proposed regulations banning certain single-use items.

    A solution to the pollutant problem with plastic packaging is a massive switch among converters to bioplastics, including biopolymers in inks. That would make a sizeable proportion of the packaging compostable, although not all bioplastics are biodegradable under present composting standards.

    A major job given to a sustainability task force by Flint Group is to help printers move away from fossil-based materials to bio-based ones. The company does have the advantage of being able to offer printers 60%-80% bio-based nitrocellulose inks.

    However, the continual presence of petrochemical-derived plastics with prices dictated by crude-oil costs could undermine certain aspects of the circular economy. In early 2020, rock-bottom oil prices brought operations in Europe for the recycling of packaging and other plastics to a virtual halt because recycling plants could not produce recyclates at a price that could compete with that for virgin plastics.

    This raised the possibility that at times of low oil prices, parts of the circular economy covering packaging and key sections of the recycling market may have to receive government subsidies.

    European Editor Sean Milmo is an Essex, UK-based writer specializing in coverage of the chemical industry.
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