AUSTRALIANPACKAGING:

ISSUESANDTRENDS
ABACKGROUNDPAPERFORTHEWORKSHOPPACKAGINGYOURWORLD
PROTECT,PRESERVE,CONTAIN,INFORM.THISPAPERHASBEENADAPTED
FROMTHEPACKAGINGCOUNCILOFAUSTRALIASISSUESPAPER18,UPDATED
JUNE2005,AVAILABLEONTHEWEBSITEWWW.PCA.ORG.AU

PRUDENCEFROST
PACKAGINGCOUNCILOFAUSTRALIA
Packagingisanessentialcomponentofourmodernlifestyle.Yetthereisalackofeasily
accessibleanduptodateinformationaboutthepackagingindustryandthemajortrendsand
issuesaffectingpackaging.Thispaperisdesignedtorectifythisdeficiency,andprovidea
backgroundfortheworkshopPackagingYourWorldProtect,Preserve,Contain,Inform.It
providesanoverviewofthepackagingindustry;basicfacts;keyeconomicindicators;the
structureoftheindustry;keydriversandinfluences;andenvironmentalissues.Thepaperis
morethanjustafactualdescriptionoftheindustryasitstandsatthebeginningofthisnew
millennium.Wehavealsosoughttolookaheadandaddresssomeofthemajorissuesand
trendslikelytoconfronttheindustryinthenextdecade.Onlytimewilltellwhetherour
observationsandcommentsprovecorrect.Wehopethatthispaperprovidessomeuseful
insightsandinformationforthegeneralcommunity,mediaandpolicymakers.Itshouldalso
serveasausefuleducationaltoolforstudentsundertakingclassassignments,essaysand
theses.

PackagingWhatItIsandWhyWeNeedIt
Whilepackaging,insomeform,hasbeeninexistenceforcenturies,thegrowthinitsusagehasbeen
particularlyrapidinthesecondhalfofthetwentiethcenturyinindustrialisedanddeveloped
countriesand,morerecently,inmanydevelopingcountries.Packaginghasevolvedfromarelatively
smallrangeofheavy,rigidcontainersmadeofwood,glassandsteeltoabroadarrayofrigid,semi
rigidandflexiblepackagingoptionsincreasinglymadefromspecialisedlightweightmaterials.Today,
packagingisproducedmorequicklyandefficientlythaneverbefore.Itisgenerallylighterinweight,
useslessmaterialandiseasiertoopen,dispensefrom,reseal,storeanddispose.
InAustralia,packagingisanessentialcomponentofourmodernlifestyle.Ittoucheseveryaspectof
ourdailylife.Itisfundamentaltothewaycommerceisorganised.Withoutpackaging,materials
handlingwouldbemessy,inefficientandcostly,andmodernconsumermarketingwouldbedifficult.
Packagingisadynamicforceinoursociety.Therehavebeenprofoundchangesinpackagingoverthe
last50yearschangesthathaveprofoundlybenefitedourlives.Wecannowusepackagingto
extendtheshelflifeofproductsonoursupermarketshelves.Packagingisnowavailabletodispense
thecorrectdosageofmedicineattherighttime.Wenowhavesmartpackaginginwhich
microchipscanbeincorporatedtoprovideinformationaboutthepackagedproductand,inthecase
offood,facilitatesupplychainmanagement.Addtothistheuseofintelligentpackagingand

time/temperatureindicatorscanbeincorporatedtoprovideeffectivemonitoringofproductquality
fromtheproducertotheconsumer.
Packagingusesavastrangeofmaterialsadhesives,metals,glass,paper/board,plastics,filmsand
woodeithersinglyorinvariouscombinations.Thedesignrangeisalsovast,rangingfromtubesto
pouches,cartonstocorrugatedboxestobulkcontainers,canstobottlestodrums.Addtothese
materialsandshapesanequalrangeofcoloursandspecialtechniquessuchashologramsandthe
rangeofoptionsincreasessignificantly.
Consumerpackaginghas,bythetimeofitsdisposal,deliveredsignificantbenefitstotheconsumer.It
hasensuredthesecurityoftheproduct,delivereditinaclean,safeandsaleableformandprevented
spillageandspoilage.Ithasdeliveredsubstantialeconomiesandtherebykeptpricesdownby
facilitatingeaseofhandling,warehousinganddistribution.Packaginghasalsoreducedboththe
amountofsolidwastegoingtolandfillandtheoverallenvironmentalimpactassociatedwiththe
productionanddistributionofgoodswhichhasbeenbeneficialtosociety.

TheRoleofPackaging
Packaginghasbeendefinedasallproductsmadeofanymaterialsofanynaturetobeusedforthe
containment,protection,handling,deliveryandpresentationofgoods,fromrawmaterialsto
processedgoods,fromtheproducertotheuserortheconsumer.Theultimatetestofpackagingis
whetherornotitperformsitsessentialtasktocontain,preserveandprotecttheproductandto
provideinformationaboutthecontentsofthepackage.
Inthepast,thisfunctionalaspectoftheroleofpackagingpreservationandproductsecurityhas
beentakenforgrantedbythegeneralcommunity.Thishaschangedinrecentyearswithanumberof
incidentsinAustraliainvolvingthewillfultamperinganddespoliationofpackagedproducts.Product
securityisnowamajorglobalissueforallcompaniesinvolvedinthepackagingsupplychain.
Productsecurityisjustoneexampleoftheincreasingdemandbeingmadeofpackaging.These
demandsarebeingdrivenbyconsumers,businesspressures,arangeofsocialanddemographic
changes,technologicalinnovationandtheneedtorespondtoenvironmentalconcerns.
Consumersarecertainlydemandingmorefrompackagingconvenience,differingproductsizes,
easyopening(butalsochildresistantclosuresandtamperevident)devices,respectforthe
environment,andminimalcostforpackagedproducts.Conveniencefoods,individuallypackedsmall
serves,microwavablemeals,easyopeningpackaging,HomeMealReplacements,securepackaging
forpharmaceuticalsandhazardoussubstancesareallexamplesofpackagingplayingarolein
assistingandpromotingourlifestyles.
Packaginghasanimportantmarketingrole.Itistheflagbearerofbrandedproducts.Packagingplays
animportantroleindifferentiatingcompetingproductsandcanbedecisiveininfluencingthe
purchasingchoicemadebyconsumers.Thepackageasadelivererofbrandequityhastoworknot
onlyontheretailshelfbutonlineaswell.

TypesofPackaging
Traditionally,threebroadcategoriesofpackaginghavebeenidentified:
1. Consumerpackagingorprimarypackagingi.e.,packagingwhichconstitutesasalesunitto
thefinaluserorconsumeratthepointofpurchase.
2. Groupedpackagingorsecondarypackagingi.e.,packagingwhichconstitutes,atthepointof
purchase,agroupingofacertainnumberofsalesunits,whetherthelatterissoldassuchto
thefinaluser,orconsumer,orwhetheritservesonlyasameanstoreplenishtheshelvesat
thepointofsale.Itcanberemovedfromtheproductwithoutaffectingitscharacteristics.
3. Transportpackagingortertiarypackagingi.e.,packagingdesignedtofacilitatehandlingand
transportofanumberofsalesunitsorgroupedpackaginginordertopreventphysical
handlingandtransportdamage.
Increasingly,manufacturersarelookingtomergeorbettercoordinatethefunctionsperformed
bytheselevelsofpackaginginordertoreducecostsandfacilitategoodpresentation.Packaging
suppliersarehelpingtodevelopinnovativewaystoachievethiswiththetotalcostbeinglessthan
thesumoftheoriginalpartsandwithfunctionalityeitherunimpairedorimproved.

AUSTRALIANPACKAGINGANOVERVIEW

KEYSTATISTICS
ThevalueofpackagingproducedinAustraliaisestimatedtobe$AUD1010.5billion.By
internationalstandardstheAustralianmarketisextremelysmall.Thevalueofworld
packagingisestimatedtobe$US300billion.
TheAustralianindustryaccountsforslightlyinexcessof1%ofGDP.
About30,000peoplearedirectlyemployedintheproductionofpackaginginAustralia.
ThetwomajorpackagingmanufacturersinAustraliaareAustralianownedasarea
substantialproportionofsmallandmediumenterprises(SME).
Generally,mostpackagingproducedinAustralia(aselsewhere)isahighvolume/lowmargin
business.
Valueaddedpackagingiswherethemargins(andcosts)arehigher.Thedriversforsuch
packagingare,however,ofteninconflictwith,andsubordinateto,thepressuresforcost
reductions.

PACKAGINGMATERIALS
ThemajorpackagingmaterialsusedinAustraliaareglass,metals(aluminiumandsteel),paper/board
(cartonsandcorrugated),andplastics(HDPE,PET,PVC,polypropyleneandpolystyrene).Paper/board
packagingisthelargestsinglematerialconstitutingabout36%ofthetotalAustralianpackaging
market.Plasticshasgainedsignificantmarketsharetobethesecondlargestsector(30%),with
flexiblesincreasingattheexpenseofrigidplastics.(Intheearly1960splasticshadlessthan10%of
theshareofthepackagingmarket.)Metalpackaginghaslostmarketshareinfoodapplicationsbut
stillaccountsfor20%,withglassat10%.Othertypesofpackagingmakeuptheremainder.

PACKAGINGINDUSTRY
Sizemattersinthebusinessofpackaging.Concentrationandconsolidationhavebeenafeatureof
theAustralianpackagingindustryoverthelastdecade.ThedegreeofconcentrationoftheAustralian
packagingindustrycanbeseenfromthefollowing:
Glasscontainers:TherearenowtwoglasscontainerproducersinAustralia(OIandAmcor).
AmcorcommencedproducingwinebottlesfromitsGawlerplantinSouthAustraliainmid
2002.
Corrugatedboxes:Threecompanies(Amcor,VisyandCarterHoltHarvey)accountforover
95%oftheproductionofcorrugatedboxes.
Aluminiumcans:Twocompanies(AmcorandVisy)produceallthealuminiumcans
manufacturedinAustralia.
Liquidpaperboardcartons:TetraPakandVisyproducealltheliquidpaperboardcartons
manufacturedinAustralia.
Steelcans:Thereareapproximatelysixcompaniesproducingsteelcans/drums/aerosol
containers/generallineinAustralia(Amcor,Huhtamaki,Irwin&Sheehan,MorrisMcMahon,
NationalCan,andVisy).

 Plastics:Overall,theleastconcentratedpackagingmaterialsector(withthelowestbarriers
toentry),althoughinsomesectorse.g.,themanufactureofPETbottles,therearejustafew
producers.
Whyisthistrendtowardsconcentrationoccurring?ItisnotuniquetoAustralia.Themanufactureof
consumerproductsisanincreasinglyglobalbusiness.ThelargestusersofAustralianpackagingare,
increasingly,multinationalcompaniesorAustralianbasedcompanieswithsignificantexportmarkets
whodemandthatthepriceandqualityofAustralianpackagingmeetinternationalstandards.This
hasledtorationalisationofthemanufactureandpurchaseofpackagingandhascompelled
packagingsupplierstothinkintermsofsimilarenlargement.
Willthistrendcontinue?Overall,theanswerisyesbutwithsomeimportantqualifications:
Consolidationismostlikelyintheplasticssectorwheretherearestillnumeroussmall
operators.
Inmanyoftheothersectorslistedabove,concentrationhasprobablyreacheditslimitwith
onlytwoproducersandwiththecompetitionauthority,theACCC,notlikelytoapprove
mergersoracquisitionsbyoneoftheother.
Accordingtoconventionalwisdom,thefutureinthepackagingmanufacturingsectorlieswiththe
large,globallyfocusedcompaniesontheonehand,andsmall,agile,innovativecompaniesonthe
other.Thosecaughtinthemiddlearevulnerable.
Despitetheconcentrationandconsolidationintheindustry,competitionbetweencompaniesand
materialtypesremainsintense.Competitivepressuresareproducedbyimports,competitionfrom
alternativepackagingtypesandthedemandsbythemajorusersofpackagingthatAustralian
packagingmeetinternationalbestpracticestandards.
TheAustralianpackagingindustryhasbeencriticisedfromtimetotimeforbeinguncompetitive
highcostandpoorintermsofinnovation.Muchofthiscriticismlackssubstanceandisselfserving.
NowadaystheAustralianpackagingindustryisoutwardlookingandexportorientedtoan
unprecedenteddegree.LikemostmanufacturingindustriesinAustralia,somepartsofthepackaging
industrysufferonaccountofscale.Thismeansthatthediscountsattainablefromlongproduction
runsareprobablynotavailabletousersofpackagingtothesameextentasintheUnitedStatesand
Europe.

PackagingTheDrivers,TrendsandIssues

Followingaresomeofthemajortrendsandinfluencesthatwillaffectthepackagingsupplychain
overthenextdecade:
Electronicbusinessprocesses
Electronictechnologyishavingthemosteffectinbusinesstobusiness(B2B)ratherthaninbusiness
toconsumer(B2C)relationships.Speedtomarketiscrucial.Newproductsarebeingdeveloped
fasterandenteringtheretailmarketmuchmorequickly.Electronicbusinessprocessesarelinking
theentiresupplychainrawmaterialsuppliers,packagingmanufacturers,packagingusers,retailers
andconsumers.Thisprovidesimmediateandaccurateinformation,reducescostsandtimedelays,
simplifieslogisticsandinventoryoperationsandprovidesabetterresponsetoconsumerdemands.
Packagingcustomersnowhaveonlineaccesstotheirsuppliers'manufacturinglogisticssystemsand

viceversa.Thisenablesrelativelyseamlessprogressfrominitiationofproductrequirementsthrough
toorderplacement,manufacturing,delivery,invoicinganddistribution.Theincreasing
implementationofpackagingoptimisationsoftwarewilldovetailwithdevelopmentsinlogistics
technologytoincreasetotalpackefficiency.Deliverieswithinthelogisticschainwillbecome
increasinglycomplex,withdirectstoredelivery,centralwarehousing,distributioncentres,product
pickingandroboticscanning.Theroleofthelogisticsprofessionalwillbecomeincreasinglyimportant
tothepackagingindustry.
Supplychainmanagement
Allcompaniesinthesupplychainareunderconstantpressuretodrivedowncosts,includingthecost
ofpackaging.Ateverypointinthesupplychain,costsareadded.Reducingthosecosts,simplifying
thesupplychainandincreasingefficiencyisnowamajorgoal.Economiesandcompetitiveadvantage
aretobegainedfromamoreintegrated,collaborative,cooperativeandlongtermapproachtothe
supplychainbythecompaniesinvolved.
Conveniencepackaging
Consumersaredemandingawiderrangeofproductsandgreatersegmentation(bysize,flavour)
withinthoseproducts.Convenience/quickpreparationfoodsprovidingsmaller/singleserveportions
areindemand.Precut,preportioned,smaller,readytoconsumeproductsareincreasinglypopular,
reflectingtheimportanceofconveniencetotoday'sconsumers.Packsthatgofromtheshelforbin
straightintothefridgeorstraightintotheoven.Packsthatareeasytoopen,dispense,resealand
store.Conveniencepackaginggoesbeyondtheessentialpurposeofpreservingandprotectingthe
product.Consumerswantconvenientlypackagedfoodproductsthatcanbequicklymadeintomeals
withoutsacrificingquality.Thisisobviousintherangeofproductsdisplayedinsupermarkets
microwavableproducts,saladkits,zipperedpouchesandmodifiedatmospherepackagingthat
extendsshelflifeandmaintainsfreshness.Abyproductofthisdemandwillbeanincreaseinthe
amountofpackagingperfoodunit.
Marketability
Packagingsellsproducts.Manyofthetrendslistedabovelifestylechanges,greaterproduct
differentiation,competitivepressuresareputtinganevengreaterpremiumonthelook,sales
appealandqualityofretailpackaging.Greaterversatilityofproductpresentationwillalsobecalled
forasanexpressionoftheincreasinglydiverseandsophisticateddemandsofconsumers.Therewill
beanincreasingdemandforhigherqualitygraphicsandpromotionallinksbetweengraphicsand
advertising.
Packagingforanageingpopulation
Theproportionoftheelderly(over65years)isexpectedtoincreaseto22%ofthepopulationinthe
firsthalfofthecenturycomparedwiththecurrent12%approximately.Thegreyingofthe
Australianpopulationwillincreasetheemphasisontheprovisionofeasyopeningsystems,
consistentwithtamperevidentclosures.Readabilityoflabelsfortheagedandvisuallyimpairedwill
alsorequireattentioninthedesigningandlabellingofpackaging.Giventheirnumbersandaffluence,
marketingwillreflectthischangingcompositionofthepopulation.

Otherdemands

Thelistofdemandsmadeonpackagingwillalsoincludethefollowing:
FreshnessWhileconsumerswantconvenience,theyalsowantfreshness.IntheUnited
StatesandEurope,salesofproductsinmodifiedatmospherepackagingareincreasing
significantly.Otherproductstoextendshelflifearealsogainingground.
TamperEvidenceThedemandfortamperevidentpackagingwillincreasethatis,
packagingwhichpossessesabarriertoentrywhich,ifbreachedormissing,willprovide
visibleevidencetoconsumersthattamperinghadoccurred.
LabellingThedemandsonlabelstoprovideinformationwillincrease.Instructiondetails,
nutritionalinformation,promotionalmaterial,barcoding,environmentalaspects,etc.,will
allneedtobeincludedonastandardlabel.
Thereistensionbetweenthesedriverswithsomepushinginopposingdirections:
Thereissomeevidencetosuggestthattherangeofpackagingmaterialsusedby
companiesmaybegrowinglesscompatiblewithexistingpostconsumerrecycling
services.
Theenvironmentalandcommercialdemandforreducedpackagingneedstobebalanced
againsttheparamountrequirementforproductsecuritywhichcanleadtoanincreasein
packaginge.g.,tamperevidentdevices.
Whilecommercialandenvironmentalpressuresarerequiringareductionintheamount
ofpackaging,therequirementforconvenience/quickpreparationfoodswhichare
individuallypackagedinsingleorsmallservesisincreasingand,inturn,isleadingtoan
increaseintheamountofpackagingperfoodunit.
Therequirementforeasyopeningpackagingcan,attimes,conflictwiththedemand
thatsomeproductsneedtohavechildresistantclosures.
Therequirementforpackagingtobemoresophisticatedandmeetarangeofneedsis
alsoleadingtoanincreaseincost.

TheEnvironment
Forseveraldecadestheenvironmenthasbeenamajorissueforpackagingcompanies.Allpackaging
materialshavetheirenvironmentalplusesandminuses.AselfregulatoryEnvironmentalCodeof
PracticeforPackaginghasbeeninoperationformanyyearsandhasrecentlybeenreviewedand
updated.Itisdesignedtoprovidecompanieswithpracticalguidelinestoevaluatetheimpactofnew
andexistingpackaging.Thedrivingforcesbehindtheprominenceofenvironmentalissuesfor
packagingarethreefoldconsumers,commercialfactorsandgovernments.
Consumersareshowingmoreinterestintheenvironmentalcredentialsoftheproductsthey
buyandthecompaniestheybuyfrom.
Commercially,supplychainfactorsareplayingaroleascompaniesrespondtothe
environmentalchallenge.Someretailchainshavebannedwhattheyconsidertobe
environmentallyunacceptablepackagingsuchaspolystyreneboxes.Therewillbemore,not

less,ofthistypeofactionfromretailersaroundtheworld.Theyarerespondingtopressure
fromtheircustomersandfromgovernments.Commercialrealitywillensurethatitwillbe
comparativelyrareforacompanytopackageaproductdeliberatelywithmorepackaging
thanisnecessarythusincreasingcostand,thereby,makingtheproductlesscompetitive.
Governmentsaroundtheworld,particularlyinEuropebutmorerecentlyinNorthAsia,have
targetedpackagingforenvironmentallegislation.Governmentmeasureshaverangedfrom
containerdeposits,packaginglevies,bansoncertaintypesofpackagingandmandating
recyclingrates.Pressuretointroducesimilarmeasureswasundoubtedlybuildinginthe
1990s.ThePCAdecided,therefore,thatinconjunctionwithgovernmentitwouldcommence
negotiationsonanationalpackagingcovenant.

TheNationalPackagingCovenant
ThefirstNationalPackagingCovenantwaslaunchedinAugust1999.ThisCovenantwasextensively
reviewedin2004andrevisedinresponsetothefindingsofevaluationsandageneralagreementby
stakeholdersthatthemodelneededtobesignificantlystrengthenedifitwastocontinue.Anewand
strengthenedCovenantbecameeffectiveinJuly2005andincorporateschangesmadetoachieve
substantiallyimprovedperformance.
Therearenowover450signatories,ofwhichover400arecompaniesandindustryassociationsin
thepackagingsupplychain.AllAustralian,State,Territory(withtheexceptionoftheNorthern
Territory)andLocalgovernmentsaresignatoriestotheCovenant.LocalGovernmentorganisations
fromallStatesexceptNSWarealsosignatories.
AnuptodatelistofCovenantsignatories,togetherwiththetextoftheCovenantandsupporting
regulatorysafetynet(theNEPM),canbefoundonthePackagingCouncilofAustraliahomepage.
TheCovenantisthevoluntarycomponentofacoregulatoryarrangementformanagingthe
environmentalimpactsofconsumerpackaginginAustralia.Itisanagreementbasedonthe
principalsofsharedresponsibilitythroughproductstewardship,betweenkeystakeholdersinthe
packagingsupplychainandallspheresofgovernment.Previousenvironmentalpolicyforpackaging
hadfocusedonpackagingmaterialsratherthantheentirepackagingsupplychain.
TheCovenantisdesignedtominimisetheenvironmentalimpactsarisingfromthedisposalofused
packaging,conserveresourcesthroughbetterdesignandproductionprocessesandfacilitatethere
useandrecyclingofpackagingmaterials.
TheCovenantestablishesaframeworkfortheeffectivelifecyclemanagementofconsumer
packagingandpaperproductsthatwillbedeliveredthroughacollaborativeapproachbetweenall
sectorsofthepackagingsupplychain,consumers,collectors,reprocessorsandgovernment.
ThestrengthenedNationalPackagingCovenanthasatermoffiveyears(200510)andincorporatesa
numberofchangesdesignedtoprovideamorerigorouscomplianceandenforcementprocess
including:
1. OverarchingCovenantTargetsfor2010(refertoRecyclingsectionbelowformore
details).
2. SpecificCovenantPerformanceGoals

3. KeyPerformanceIndicators
4. ABroaderScope

TheCovenantnowincludestherecoveryandreuseofpackagingmaterials
consumedawayfromhomeworkplaces,commercial&industrialpremises.
Materialcollectedinkerbsidesystemswillcontinuetobeafocusofthenew
covenant.

Signatoriesmustaddressinhouse&distributionpackagingandissuesof
litter,marketdevelopmentforrecycledmaterialsandconsumerawareness
intheirActionPlans.

Recycling

Companiesinthepackagingsupplychainhavealonghistoryofactivelysupportingrecycling,
includingthekerbsidecollectionsystem.Theyhavealsoinvestedheavilyinrecyclinginfrastructure
andthebuybackofrecyclates.Theuseofrecycledcontentinpackagingisnowwidespread.Recycled
packagingisalsousedtomakeavarietyofother(nonpackaging)products.Companiesinthe
packagingsupplychainwillcontinuetomakesignificantinvestmentsincapitalinfrastructurefor
recycling.
Assessingtheeffectivenessofdifferentrecyclingsystemsandtheenvironmentalimpactofdifferent
typesofpackagingisacomplextask.Whilerecyclingiswidespreadandpopularitisnotthesoletest
oftheenvironmentalcredentialsofallpackaging.ThefirststudyconductedbytheNational
PackagingCovenantCouncilwasanIndependentAssessmentofKerbsideRecyclinginAustralia.
AmongtheconclusionsofthisAssessmentwerethefollowing:
THECURRENTKERBSIDESYSTEMINMETROPOLITANANDREGIONALCENTRESPROVIDESA
TOTALNETBENEFITTOAUSTRALIANCOMMUNITIES.THISSTUDYHASASSESSEDTHEFINANCIAL
ANDENVIRONMENTALCOSTSANDBENEFITSINMETROPOLITANANDREGIONALAREASBY
AVERAGINGTHECOSTSFORBOTHAREASINALLSTATESANDTERRITORIES.WHILSTBY
DEFINITIONREGIONALAREASINCLUDESPROVINCIALANDRURALTOWNSASWELLASREMOTE
COMMUNITIES,THEASSESSMENTRESULTSHAVETOSOMEDEGREEBEENLIMITEDFORRURAL
TOWNSANDREMOTECOMMUNITIESDUETOBOTHLOWDATAAVAILABILITYANDTHELACKOF
KERBSIDESERVICESINMANYOFTHESECOMMUNITIES.

UnderthenewNationalPackagingCovenant,anoverarchingrecyclingrateof65%(currently
48%)hasbeenagreedbyMinistersby2010,withcontributionsfrom:

paperandcardboard 7080%(currently64%)

plastics

3035%(currently20%)

aluminium

7075%(currently64%)

steel

6065%(currently44%)

glass

5060%(currently35%)

othermaterials

25%

(currently10%)

nofurtherincreaseintheamountofpackagingwastedisposedtolandfill

Inshort,recyclingwillremainaprominentissueforcompaniesinthepackagingsupplychain

TheOutlookWhatLiesAhead?
Forcompaniesinthepackagingsupplychainthereisoneincontestableconclusionthedemands
andpressureswillnotabate.Indeed,theywillintensify.Globalisationisheretostay.The
technologicalagewithallitsramificationshasonlyjustbegun.Tightcontrolsoncostswillremainin
place.Australianpackagingwillneedtobeinternationallycompetitive.
Thespecificsareasfollows
Efficiency:Inthebusinessworldofthe21stcenturywecannolongerexpecttoretainour
customers'businessunlesswe'recontinuallyincreasingefficiencyefficiencyinour
processes,inourproductcostandinourbusinesstransactions.
Packagingmaterials:Lighterweight,higherperformingpackagingmaterialsareunder
constantdevelopment,asarestructuraldesigns,whichprovidethesamelevelofproduct
protectionatalowercost.
Packagingsuppliers:Increasingly,majorpackagingsuppliersareevolvingtowardbecoming
totalpackagingsystemssuppliers.Packagingsystemsandcartonerectingmachinerywhich
cutlabourcostsarealsobecomingmorecommonplace.They'realsobecomingmoretailored
tomeettheneedsoftheirspecificmarket.
Machinery:Equipmentsuppliersareofferingnewmachinerytorationalisepackaging
operations.Multifunctionsystemsarereducingthespacerequiredforpackinglinesandthe
numberofstepsinthepackagingprocess.
Packagingdesign:Changingandmorecomplexlifestyleshavealsostronglyinfluenced
packagingdesign.Precut,preportioned,smaller,readytoconsumeproductsare
increasinglypopular,reflectingtheimportanceofconveniencetotoday'scustomers.Packs
thatgofromtheshelforbinstraightintothefridgeorstraightintotheoven.Blisterpacks,
microwaveablepacks,zipperedpouches,contouredshapesandcarryhandlesonouterpacks
arejustsomeexamplesofthistrend.
Logistics:Keylogisticschangestothepackagingindustrywillseeincreasedcustomerchoice,
fasterproductdelivery,increasedmanufacturingandinventorycontrolsandincreased
supplychainmanagementefficiency.Intheverynearfuturemanypackagingcustomerswill
haveonlineaccesstotheirsuppliersmanufacturinglogisticssystems,aswewilltotheirs.
Thiswillenablerelativelyseamlessprogressfrominitiationofproductrequirement,through
toorderplacement,manufacturing,delivery,invoicinganddistribution.
Newtechnology:Smarterpackagingcompaniesaroundtheworldarealreadyusingnew
technologytotakecostsoutoftheirownsystems.Andthey'reusingInternetlinksto
improvetheirrelationshipsandperformancewithcustomers.Andit'sinourtypeof
industrybusinesstobusinessthatwillseethebiggestimpactofcomputertechnologyand

ecommerce.It'sthosepackagingcompanieswhodon'tgetproactiveabouttheirInternet
strategieswhowillfindthemselvesbeingpassedoverbytheircustomers.
Thefirstdecadeofthe21stcenturyislikelytobenolessfreneticthanthelastdecade,with
challengeandchangebeingtheorderoftheday.Companiesthatstagnateandlookfortheeasy
optionssimplywillnotsurvive.Inordertosurviveandprosper,companieswillneedtobeflexible
andadaptableandinvest,innovateanddeveloptheappropriateskillsbasetomeetthechallenges
ahead.

SUMMARY

PackagingisessentialincontemporaryAustraliansociety.Itisanintegralpartofeverydaylife
andbringsrealbenefitstoallAustralians.Itplaysakeyroleintheproduction,preservation,
distributionandmarketingofgoods.Consumerpackaginghas,bythetimeofitsdisposal,
deliveredsignificantbenefitstotheconsumer.

Convenience,safetyandenvironmentalfriendlinessarethekeyrequirementsofpackaging,with
safetybeingofparamountimportance.

Consumersaredemandingmoreandmorefrompackaging.Changeisalsobeingfosteredby
commercialpressures,socialanddemographicchanges,technologicaldevelopmentsand
environmentalconcerns.Packagingmanufacturersarebeingrequiredtorespondtothese
pressuresbyvalueaddingtotheirpackaging.

SomekeystatisticsforAustralianpackagingareasfollows:thevalueofpackagingproducedin
Australiais$AUD1010.5billion;about30,000peoplearedirectlyemployed;6570%of
Australianpackagingisusedbythefoodandbeveragesector;andpaper/boardisthelargest
singlepackagingmaterialfollowedbyplastics,metalandglass.Australianownedcompaniesare
thedominantpackagingmanufacturers.

IncreasedconcentrationandconsolidationhavebeenhallmarksoftheAustralianpackaging
industryoverthelastdecade.ThistrendisnotuniquetoAustralia.Theplasticssectoristhemost
likelytowitnessfurtherconsolidation.Someothersectorshaveprobablyreachedthelimitsof
consolidation.CompetitionbetweenAustralianpackagingcompaniesandmaterialtypesis
considerable.

Majortrendsandinfluencesonpackagingoverthenextdecadewillbetheneedtoadd
consumervalue,electronicbusinessprocesses,costreduction/supplychainmanagement,
environmentalissuesandglobalisation.Someofthesetrendsandinfluencesarepushingin
opposingdirections.

Theenvironmentisamajorissueforpackagingsupplychaincompanies.Allsectorsare
contributingtoprogramsandinitiativeswhichminimisetheadverseenvironmentaleffectsof
packaging.Allpackagingmaterialshavetheirenvironmentalpluses.Overall,thepackaging
industryhasastrongrecordonrecycling.Theuseofrecycledcontentinpackagingisnow
widespread.

Therearenowover450signatoriestothesecondNationalPackagingCovenant,TheCovenant
hasledtogreateractivitybymanycompaniestoimprovetheenvironmentalperformanceof
theirpackaging.

Theoutlookforthepackagingindustrywillcontinuetobechallenging.Packagingwon'tdisappear
butthedemandsonpackagingandthecompaniesthatproduceitwillincrease.Moreandmorewill
berequiredofpackagingbyconsumers,customersandgovernments.Companieswillneedtoinvest,
innovateanddeveloptheappropriateskillsbasetomeetthesechallenges.