Jim Scott, JES PackagingJim Scott, JES Packaging

PackExpo ‘09 Las VegasPackExpo ‘09 Las Vegas

October 6October 6thth, 2009, 2009

Man vs. Clamshell: A Lopsided Fightby David Segal, NYT, 9/27/09

“… companies want packages that are easy to transport, display products in a highly visible way and are hard to steal …

The point is to create a package that cannot be opened and closed surreptitiously.

That way, no one can remove anything and put the package back on the racks without it being obvious.”

History of Trend toward PCR Plastic Packaging

Sheet Extruders’ Imperatives

Thermoformers’ Imperatives

End Users’ Imperatives

Retailers’ Imperatives

Recyclers’ Imperatives

Why Trend toward 100% Post-Consumer Content Recycled Plastic Packaging will Continue

’80s – ’90s – Paperboard Pkg. “100% Recycled Content - Min. 35% Post-Consumer Content”

Non-Food Contact due to FDA Concerns

Late ‘90s – ’08 – Increasing interest in “Bio-Plastics,” eg., PLA – sometimes touted as

“biodegradable”

‘05 – Wal-Mart initiates its “Packaging Scorecard”

‘06 – ’09 – Increasing Questions on Performance, Cost, and Sustainability of Bio-Plastics and degree of biodegradability / compostability

‘08 – “Wal-Mart will become more aggressive in the near future: Material Reduction & Recycled Content”

‘08 – ’09 – Increasing demands by Major Retailers with “Truth in Environmental Labeling” mandates

‘09 – Wal-Mart initiates its Sustainable Product Index

Greener Package initiates its “Anti-Greenwash” Guidelines

Pentel introduces Recycled “Handy-line S” Highlighters

More Sustainable versus Virgin or Bio-Plastics

Equal or better Physical Characteristics and Performance

Availability and Competitive Cost of FDA Food Contact Pellets and Flake … esp. PCR PET

Claims can be readily Substantiated … and meet “Truth in Labeling”

Mandates

Supported by CPG Companies and Major Retailers

Sheet Extruders’ ImperativesSheet Extruders’ Imperatives Want Proprietary Manufacturing Processes and Equipment

Capability to run Flake … not Pellets … may be necessary for High Quality and Consistency of RPET

Need Multiple sources of Pellet / Flake, esp. FDA food grade RPET

May need to move in stages from 35% to 100% Post-Consumer Content

Due to new or less efficient processes … or increased demand … may need to significantly increase Production Capacity

Thermoformers’ ImperativesThermoformers’ Imperatives

Want Proprietary Manufacturing Processes and / or Package Styles

Need to offer Cost Competitive, Sustainable Packages

May need to move in stages from 35% to 100% Post-Consumer Content

ThermoformersThermoformersCharacteristic PVC PLA PET RPET Forming Throughput X ? + 5% + 5% Energy / Higher ? Lowest Lower? Oven Temp. 600 F ? 450 F 450 F Shrinkage / Equal Equal? Equal Equal Mold Heated Die / No ? Yes Yes Plate Die Wear Slow ? Fast Fast Cutting Less ? More More Pressure

End Users’ ImperativesEnd Users’ Imperatives Want Unique Products and /or Packaging vs. Competition

No Increase in Cost, but … No Sacrifice in Production Efficiency or Performance

Driven mostly by Major Retailer Demands … esp. WalMart * Cost has been #1, #2, and #3 * Environmental Issues beginning to be seriously considered

On-Package Environmental Claims must be believable to Consumers … and be readily Substantiated

End UsersEnd UsersCharacteristic PVC PLA PET RPET Clarity Best Good Best Good / Best “Environmental Least Best Good Better I mpression” Enviromental No No No Yes Claims can be Substantiated Recycled Content No No No Yes Recyclable No No Yes Yes

End UsersEnd UsersCharacteristic PVC PLA PET RPET I mpact Strength 415 300? 425 425 ASTM D1709 - gm. Adh. for Face Water / Water / Solvent Solvent Cards Solvent Solvent Water? Water? Adh. for Fold W / S W / S W / S W / S Cards

Cost X 3X 1.2X 1.2X

Earthbound Farm Earthbound Farm America’s largest grower of Organic

Produce

July, ’09 - announced that all their clamshell fresh cut salad pkgs. are being made from 100% post-consumer Recycled PET

RPET is being supplied by Packaging Plus

Earthbound Farm Earthbound Farm

Based on 2008 Annual Usage, use of 100% RPET:

Will conserve 424,000 million BTUs

Will conserve 68,307 gallons of water

Will eliminate 16,191 tons of CO2

Will divert 1.3 million lbs. of Solid Waste from landfills

Sustainable Packaging Coalition Sustainable Packaging Coalition (SPC) (SPC)

“ Earthbound Farm’s PCR PET initiative is a perfect example of how to get the ball rolling in the right direction.”

“We hope to see more companies that make that commitment, creating a market for these materials …”

Anne Johnson, Director SPC

Subway Subway Changing Plastic Salad Bowls:

Redesigned to reduce use of plastic

Switched from OPS to 10% PCR PET

Will reduce plastic material use by 712,00 lbs. annually

Will eliminate 19,500 corrugate cases annually

Will reduce carbon footprint by 21% or 84.8 kgm of Carbon Dioxide Equivalent (CO2e)

PWP Industries PWP Industries

Major supplier of FDA Food Grade RPET

Supplier of the 10% PCR PET for Subway

June, ‘09 - opened 40 million lb. annual capacity PET Recycling facility in West Virginia at cost of $20M

Second 40 million lb. facility scheduled to open Q2/10 in California

Every 40 million lbs. of RPET represents elimination of 30,000 tons of CO2 and 398 million kilowatt hours … annually

Integrated Packaging FilmsIntegrated Packaging Films

ECO-THERMECO-THERM tmtm 100% Post-100% Post-Consumer Recycled PET sheetConsumer Recycled PET sheet

Made with FDA food contact RPET resinMade with FDA food contact RPET resin

PreservePreserve

Preserve toothbrushes made from 100% Post-Consumer Recycled Polypropylene (PP) - Yogurt Cups

Packaging Clamshell made by Innovative Packaging from ECO-THERM tm 100% Post-Consumer Recycled Content PET

Preserve’s Claim: “Plastic packaging made from 100% post-consumer plastic bottles”

Schering-Plough, Corp.

OTC offerings include Claritin allergy pills, Afrin nasal sprays, Dr. Scholl’s foot care products, and the sun care line Coppertone

Products marketed in some 140 Countries

Company has agreed to be acquired by Merck

Schering-Plough, Corp.

New Package Requirements:

Must work in “Club Store” setting

Sustainable material

Does not require the purchase of Sealing Equipment

XO Athletic Company Over 20 Years experience in the

Sports Medicine market

Supplying over 80% of the US athletic cup market

Invented the “flexible cup” in 2000 – hard cup covered in soft rubber

XO Athletic Company

New Package Requirements:

New, smoother design that is more in line with product

Clamshell

Does not require the purchase of RF sealing equipment and can be packaged “in house”

More Sustainable material

XO Athletic CompanyPackaging Development:

June 2009: First Choice met with CardPak and LucDesigns Engineering, LLC. to discuss XO Athletics’ concepts

XO Athletic Company

Packaging Development

End of July 2009: Presented full display planogram to major retailer

Sept 2009: Moving forward on production order for Fall 2009 introduction

NEW PACKAGING FOR 2010

XO PROCUP Current New

XO PROCS2

Current New

ScarGuard Labs, LLC, Inc.

A Pharmaceutical Company guided by Doctors, Pharmacists, and Pharmaceutical Biochemists with decades of combined experience

Manufactured in three locations across the U.S.

ScarGuard MD and ScarLight MD available at Doctors’ offices and Retail Outlets (CVS, Walgreens, etc.)

ScarGuard Labs, LLC, Inc.

New Package Requirements:

Eliminate material splitting

More Sustainable material

Improve product fit

Lower Costs

ScarGuard Labs, LLC, Inc.

ScarGuard Labs, LLC, Inc.

Retailers’ ImperativesRetailers’ Imperatives

Desire to provide Value to Consumers leads to constant pressure on Consumer Products Companies for lower and lower prices

Pressure from Environmental groups for major Retailers to act as quasi-governmental bodies by setting Sustainability standards

Opportunity to work with Recyclers on Closed Loop Recycling Programs to increase Post-Consumer Content

RetailersRetailers

Characteristic PVC PLA PET RPET

Environmental No No No YesClaims can beSubstantiated

Cost Effective Most No Yes Yes

Can Survive Yes No Yes YesDistribution

Recyclers’ ImperativesRecyclers’ Imperatives

Need to have a Critical Mass of packages in a recognized Recycling group to make it profitable to separate

Need to have a minimal number of packages in the Waste Stream that contaminate the Recycling System, eg., PVC or PLA

Opportunity to test PET, PP and PS Recycling Programs with companies like A Greener Solution or NextLife

RecyclersRecyclersCharacteristic PVC PLA PET RPET Ease of No No Yes Yes Separation Contamination Yes Yes No No I ssues Market for No No Yes Yes Resale

Continued Improvement in Physical Characteristics and Performance

Continued Availability of PCR Resins … esp. FDA Food Contact RPET … Large potential Source: 166 Plastic Bottles per year

… but only 20% are presently recycled

Claims can be readily Substantiated … and meet “Truth in Labeling” Mandates

Potential for Increased Government Legislation

Consumers recognize that Recycled Content Packages have positive environmental impact

Continued comfort with “Post-Consumer Recycled Content” Claims … even on Food Packaging

Continued Support by Major Retailers and CPG Companies

Opportunities for PP and PS Recycling … with companies like A Greener Solution or NextLife

Continued Competitive Cost

Jim Scott, Principal JES Packaging

(401) 597-0761 jamesescott@cox.net