Bioplastics in Southeast Asia
While cost is indeed a major deciding factor when it comes to packaging material procurement in Southeast Asia (many might say it is the only deciding factor), the slightly higher cost of bioplastics has not deterred brand owners in the region from switching to the sustainable alternative.
For foodservice packaging for example, the Inthanin coffee chain – one of the largest in Thailand with more than 350 outlets nationwide – introduced Ingeo clear cup/lid packaging for cold beverages in April 2015; Inthanin’s cold beverage sales are estimated at around 10 million cups per annum.
For Inthanin, its search for more sustainable packaging was fuelled by two factors: the company’s mission to be more environmentally conscious – as indicated in its brand slogan “Natural and Relaxing” - and the need to differentiate itself in its highly competitive market.
NatureWorks worked closely with Inthanin and demonstrated how Ingeo packaging performs just as well as those manufactured from conventional plastics, so the brand owner had no qualms about switching its PET thermoformed cup for small size servings and PP injection-molded cup for big size servings to Ingeo.
Of course, switching to bioplastics meant higher packaging costs for Inthanin. But the company felt that the price difference between conventional plastics packaging and Ingeo packaging was just “slightly more expensive, but still reasonable”, Inthanin told PackWebasia.com. It decided that it would absorb the cost difference in the initial introduction phase, then increase the retail price “a little but not much, to a still-reasonable pricing bracket” that would ensure it would still be cheaper than that of major international competitors such as Starbucks.
Inthanin plans to switch to Ingeo packaging for all 400 of its products by the end of this year.
In end 2014, Thai organic dairy brand Dairy Home became the first Asian brand to switch to bioplastics packaging for its entire range of yoghurt products.
According to Pruitti Kerdchuchuen, owner and managing director of Dairy Home, this move was in line with the brand’s mission to promote organic and sustainable dairy farming and, by extension, healthier lifestyles. All its dairy products are organic and carbon credit certified, and the brand owner wanted to carry its philosophy on into its packaging as well.
Kerdchuchuen started researching bioplastics packaging options in 2010, and in mid-2013, approached NatureWorks to explore the feasibility of switching from PP thermoformed cups to Ingeo packaging for his yoghurt products.
After much testing in actual yoghurt production, filing and storage conditions, Dairy Home introduced the Ingeo yoghurt cup for its products and promoted it via a marketing campaign with the theme “When Nature Meets Nature” to communicate how its organic yoghurt is now available in 100% plant-based cups.
According to Kerdchuchuen, if the company were to look solely at the price of the yoghurt packaging alone, the cost is about 30% higher than that of conventional plastic packaging options.
However, when the overall production cost is calculated as a whole, there is only a 1-2% price increase. In addition, bearing in mind the volatility of conventional plastic resin prices versus the mostly stable price of Ingeo resin, Dairy Home believed that it made economic sense to switch to Ingeo.
Dairy Home sells an average of 200,000 Ingeo cup-packaged yoghurts each month; it absorbed the packaging cost increase and worked on its internal finances such that the extra pennies would be paid out of its CSR and R&D budgets, and didn’t raise retail prices. Positive customer feedback has encouraged the company to now explore how it can extend the use of Ingeo packaging to its other product ranges, for example organic liquid milk.
Just a few months ago, Charoen Pokphand Foods Public Company Limited (CPF) launched fresh food packaging made of Ingeo. The major Thai agro-industrial and food conglomerate estimates they will use nine million Ingeo trays for its fresh meat products in the first year.
To CPF, the definition of sustainable packaging is one that can perform well for food preservation, is safe for food contact without toxic substance, and environmentally friendly – all factors that Ingeo meets. Significantly, the shift from fossil-based PET trays to Ingeo helps reduce greenhouse gas emissions by around 80%.
See other articles in the Bioplastics 101 series:
The full article is available in the October 2015 issue of Packaging Business Insight Asia. To find out more, click here.
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