Natural Foods Merchandiser

Prices Drop for Eco-Packaging

Think plastic, and "environmentally friendly" does not immediately come to mind—yet.

Major chemical companies, aided by enterprising packaging manufacturers, hope to change that. A new generation of biodegradable technology may finally make eco-friendly plastic a cost-effective packaging option for food in the United States.

Even though such packaging costs more than traditional plastic offerings, the price gap is rapidly closing. Commercial capacity for new products is increasing, due to investments by chemical companies including BASF AG, Cargill Dow Polymers, DuPont and Eastman Chemical Co.

Savvy retailers who go green today may find the payback worth the payout. They can promote their use of biodegradable and recycled packaging to differentiate themselves from their mass-market competitors, particularly in high-value departments such as the delicatessen, foods to go, bakery, produce and meats.

"Whole-foods markets are going to have to embrace the use of these products because it clearly goes toward their philosophy," says Frederic Scheer, president of Los Angeles-based Biocorp NA, a manufacturer of biodegradable food service items. "Price was an issue and is an issue. But we are already starting to see the prices of these products come down."

Chemical companies are helping to commoditize the new generation of biodegradable plastics. A joint venture of Dow Chemical Co. and agriculture giant Cargill Inc., the Minnetonka, Minn.-based Cargill Dow Polymers was formed in 1997 specifically to develop a bio-based and biodegradable polymer. That's a chemical compound made from an annually renewable resource found in the United States, unlike traditional plastic from petroleum. It's fully compostable, unlike traditional plastic, which can take upwards of 100 years to degrade.

After a $750 million investment in the technology, Cargill Dow developed NatureWorks PLA, which produces its alternative chemical compound, or resin, from natural plant sugars in corn. Cargill Dow says that resin, called polylactide, can be produced using 20 percent to 50 percent less fossil fuel than petroleum-based plastics.

For the past two years, the company has sold NatureWorks primarily in Europe and Asia, where strict packaging regulations have forced supermarket chains and food companies to seek eco-friendly options. Iper, an Italian supermarket chain, has been using NatureWorks for the past year to make film for wrapping bread, fresh pasta and salads at its 21 stores. Ilip, one of Europe's largest producers of packaging for agricultural products, uses it to make film to wrap fresh produce at retailers throughout Europe. In April, Danish packaging provider Faerch Plast signed a deal to produce a new packaging line based on NatureWorks for cold fresh foods, such as meat, salad and pasta.

Cargill Dow says the time is right to make NatureWorks PLA a household name in the United States. In April 2002, the company opened its manufacturing plant in Blair, Neb., which is now running at capacity. The plant can produce more than 300 million pounds, or 140,000 metric tons, of PLA using up to 40,000 bushels of locally grown corn per day.

In April, Wilkinson Manufacturing Co., based in Fort Calhoun, Neb., announced a new line of packaging for the deli and baked goods sections of grocery stores under the NaturesPLAstic name. Wilkinson, which produced the first aluminum TV dinner trays for Swanson Frozen Foods in the 1950s, says its investment in NatureWorks PLA represents a new way of thinking about packaging. "Using naturally derived resources makes so much sense," says Joe Selzer, vice president of marketing and sales. "Processors, retailers and consumers all benefit because the packaging materials have more environmental benefits."

Cargill Dow plans to reach out to retailers later this year in a marketing campaign built around the tagline "Paper, plastic or NatureWorks," says company spokesman Michael O'Brien. But Cargill Dow has already started to hear from supermarkets interested in the new packaging options, particularly regional retailers looking for a point of differentiation against competitors.

"Where we're finding our success in packaging with retail is in the high-end deli and bakery department and with regional retailers versus national supermarket chains," says O'Brien. "They are trying to make themselves stand out by showing consumers they are committed to the freshest, best products—and that includes packaging."

Such interest is music to the ears of Biocorp's Scheer. He has been touting biodegradable packaging for more than a decade in the United States, and admits that the higher cost and confusion about the definitions of the words biodegradable and compostable made many retailers wary of the products. To eliminate market confusion, Scheer helped found The Biodegradable Products Institute (, which aims to educate the marketplace and "certify" products that are biodegradable.

To help cut the costs of its goods, Biocorp has been using resins from different chemical manufacturers, including NatureWorks, DuPont's BioMax and Eastman Chemical's Eastar Bio, to create biodegradable versions of cups and lids, cutlery, and fruit and vegetable bowls for his customers. Interest in such items is growing: As part of a pilot program, Biocorp supplied The Coca-Cola Co. with 100 percent biodegradable cups for use at the Salt Lake City Winter Olympics. The cups degrade completely in 30 to 60 days.

At press time, Biocorp also planned to announce a new line of cutlery that would be more cost competitive with plastic options, which sell for anywhere from $10 to $20 per case of 1,000 pieces. "My products were somewhere about $70 per case of a thousand," says Scheer. "Did we sell products? Yes. But cutlery is a commodity business, and at $70 per case, it's not a commodity." The new cutlery, developed with NatureWorks PLA, will sell for $20 per case.

"We can make salad bowls, to-go packaging, cups, cutlery and plates that are not only biodegradable but bio-based," Scheer says. "There's no reason that a supermarket, especially a whole foods market, can't offer a salad bar that is completely bio-based and biodegradable, counting [both] the food and foodservice items."

Biocorp is not the only foodservice packaging provider hoping to carve a name for itself. EarthShell Corp. last year signed an alliance with DuPont to use the chemical company's BioMax biodegradable polyester, coating and films to design foodservice packaging items such as plates, cups, sandwich containers and bowls. Its partners include the Sweetheart Cup Co. Inc., one of the largest manufacturers of disposable foodservice products in North America and a supplier of hinged-lid containers for McDonald's Big Mac.

The more the merrier, says Steve Mojo, executive director of BPI. "Over the past year or two, there's been a dramatic increase in the choices that have become available from manufacturers and resin suppliers," he says. He has already started to see more "zero waste events," where all the packaging and food waste can be either recycled or composted.

For natural and organic retailers who preach the benefits of Mother Nature, eco-friendly packaging makes sense—especially as the costs of green packaging continue to drop, Mojo says. "If you're looking for a point of differentiation as a retailer today, then the time is right to look at packaging."

Connie Guglielmo is a freelance writer and novelist in Los Altos, Calif. She may be reached at [email protected].

Natural Foods Merchandiser volume XXIV/number 7/p. 19

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