GREEN ISSUES PACKAGING: Lighten up

The market is awash with packaging directives – and lighter bottles and Tetra Paks have helped wine companies to meet them. Fionnuala Synnott reports

Although mainstream awareness of carbon offsetting may be relatively new, European businesses have been forced to look at their environmental credentials since 1994 when the EC implemented the Packaging and Packaging Waste directive in a bid to reduce the impact of waste on the environment. In the UK, this directive led to the implementation of the Producer Responsibility Obligations (Packaging Waste) Regulations in 1997.

The regulations apply to businesses that handle over 50 tonnes of packaging per year and generate a turnover of over £2m. But they are so administratively burdensome that many businesses have spent more money on administration than on reducing packaging. Although most drinks businesses are working hard to comply with the regulations and meet the targets set by the Department for Environment, Food and Rural Affairs (DEFRA), not everyone has, and seven drinks companies are currently being prosecuted by the Environment Agency (EA). In November last year, Coe of Ilford, a family-owned wine and spirit wholesaler and distributor in Essex, was fined £48,000 after admitting to 12 offences under the regulations.

Sarah Dover, investigating officer for the EA says, “Although these regulations have been in force since 1997, some companies remain unaware of their responsibilities and risk being brought to court.” Jeremy Beadles, CEO of the Wine and Spirit Trade Association (WSTA) says, “The best thing you can do if you haven’t complied up to this point is to comply and co-operate fully with the Environmental Agency.”

Apart from the regulatory motivation there is also a financial impetus to reducing packaging. One of the cost-cutting measures employed by the wine industry is to use lighter-weight glass bottles. The Waste and Resources Action Programme (WRAP) is working with the wine trade to reduce the amount of glass waste in the UK. As British glass manufacturers produced 724,517 tonnes of glass for use by the wine and spirits industries last year, this is obviously an important area to target from a cost-saving and environmental perspective.

According to Beadles, the industry has responded well to WRAP’s wine initiative. He says, “Historically, wine producers and bottlers in the UK have never had buying power with the glass industry because the UK isn’t a wine-producing country. But thanks to the WRAP initiative, retailers, glass producers and distributors are all working together to re-engineer the supply chain.”

WRAP has been successful in working with the wine industry because it has demonstrated that apart from environmental savings, reducing the weight of wine bottles can also bring significant cost benefits to the whole of the supply chain. The organisation has produced a “ready reckoner” (http://winebottles.wrap.org.uk/ savings), which helps retailers and brand owners identify the potential economic benefits of lightweighting and bulk importing.

Potential savings from using a less weighty product include cutting down on expensive material as well as transportation and warehousing costs. Wine producers such as Brown Forman have been quick to realise this. Susanne Zechiel, BF’s sustainability manager for California, says, “Most of the time being an environmentally-friendly winery works to our benefit.

We have managed to cut our transportation and shipment costs by reducing the ratio of packaging to product.”
Reduced packaging also means less material costs. Zechiel says, “There is also a cost differential between virgin and recycled products. We have been able to maintain costs or reduce them by using recycled products. We also want to make the end-product recyclable. Much of the material we acquire over and over again from the same supplier. This reduces our suppliers’ costs as well as our own costs. All things considered, such as quality and price, our product has a competitive advantage because the customer knows our story, which is a tie-breaker. We have a faithful following,” she adds.

Argentine wine producer, Marta’s Vineyard, is currently working on a project to reduce the weight of a (full) bottle of wine from 1.5kg to 1kg, bringing the weight of a case of 12 bottles down by 6kg. Martin Falconer, director of Marta’s Vineyard, thinks that the cost of developing the new bottles will be counterbalanced by transport savings although, surprisingly, the anticipated savings are unlikely to be made on freight and shipping costs as companies are charged by unit rather than weight. Falconer explains, “We will be charged the same regardless of whether the container weighs 28,000kg or 24,000kg. The environmental savings are therefore not passed on to the wine producer.”

However, according to Falconer, there is a huge difference when it comes to handling a 1,400kg palette or a 1,000kg palette in the warehouse. “The lighter palette allows you to use narrower aisles and store more wine, resulting in property cost savings.” Zechiel adds, “Your equipment doesn’t work as hard if it carries less. It also emits less CO2.”

Falconer is aware of the concerns associated with lightweighting wine bottles. He says, “When modifying the bottle, you have to be careful that the consumer doesn’t think it looks cheap.” Safety is a primary concern. Zechiel explains, “There is also the possibility that the wine might re-ferment in the bottle so we have to use packaging that is safe and will protect the customer in the event that this happens.”

Beadles says, “If you reduce the amount of glass used too much, bottles will break. Bad packaging means that the product is thrown away, which is even worse for the environment.” According to Falconer, “The solution is to get the box right without using more paper. We find that using corrugated cardboard is best.”

Other wine companies are circumventing the problem by using Tetra Packs instead of glass. Boisset America launched its French Rabbit wine range in 2005 in both glass bottle and Tetra Prisma packaging and found that sales for the Tetra Prisma were 21 times greater than its glass equivalent. The wines are packaged in 1-litre containers with screwtop closures and label-free packaging. Boisset claims that using the Tetra Pack reduces packaging waste by 90% compared to glass but, in practice, the packaging is difficult to recycle in the UK. Andy Dawe, WRAP’s glass technology manager, explains, “Tetra Packs are light but they are not readily recyclable in the UK, unlike glass and plastic. There used to be a plant in Scotland that recycled Tetra Packs but it has shut down. We are trying to encourage the local authorities to collect them and transport them to continental Europe, where they can be recycled.” However, Tetra Packs can be composted and take less energy to produce than glass. From a consumer perspective, it also has the advantage of being lighter to carry and keeps the wine fresh, just like bag-in-box (BIB).

Nearly 60% of the wine sold in the Swedish market is packaged in BIB. This saves on transportation costs from the bottling plant to the retailer. According to Göran Wrangsell, Quality Assurance, Wine Division, V&S, there are two different ways of recycling the plastic; either by burning it and producing energy, or recycling it. He says, “Swedish people are very environmentally aware and nearly everyone recycles paper. The box handle is also recycled. The trend for BIB is consumer-driven but is more to do with carrying less weight than environmental concern.” He adds, “Glass bottles are still popular, but we wash and re-use them rather than recycle them.”

In fact, recycling isn’t always the solution. Anders Linde, director of external environment affairs for Rexam, says, “In order for recycling to be energy efficient, waste has to be collected using less energy than the savings generated by recycling.” For instance, recycling makes sense for high-energy materials such as glass but doesn’t for PET (unless the bottles are collected in a concentrated area) as it doesn’t take the same energy to produce.

Another way to make cost savings and reduce the environmental impact of transporting wine is by bulk importing it, which is sometimes necessary in order to meet the price point that the market is prepared to pay. The method is particularly popular among supermarkets that are looking to develop own-label wines while keeping their costs down. Dawe says, “There is a strong business case for bulk importing wine. We estimate that producers can reduce their transport costs by approximately 40%.” David Mawer, joint managing director of shippers FFG Hillebrand, agrees: “By bulk importing, you can increase your container load by 2.5 times compared to a cased container.” The reduced number of road journeys is also beneficial to the environment. Some producers, however, prefer to bottle their wine at source because of quality concerns associated with bulk importing. Falconer says, “Bulk importing has a tremendous impact on the quality of your wine. If wine quality can be measured in percentage terms, I would estimate that you can lose as much as 20-25% of your wine quality by bulk importing.”

In fact, old-fashioned isotank containers, steel tanks used for shipping wine, have given bulk shipping a bad name. In the 1980s and ‘90s the bulkhead inside the container was made of wood, increasing the chances of TCA/TBA contamination. These tanks were also top-loaded and discharged via a pump, increasing the risk of oxygen ingression. But bulk shipping techniques have evolved significantly over the past 10 years. Hillebrand’s Mawer, explains, “Flexitanks have only recently been refined to become wine-compatible. Nowadays, we use bottom-discharge flexitanks, which can be handled like steel tanks by connecting a hose to the bottom and letting gravity move the wine. We’ve also developed materials that prevent any gas or vapour passing through the bag and use an aluminium foil barrier on the outside of the bag, which acts as a barrier. Our flexitanks are vacuum-sealed units.” In addition, FFG Hillebrand has replaced wooden bulkheads with steel ones in order to reduce the risk of TBA/TCA contamination and uses a lining made from an inert material instead of the cardboard traditionally used to line the container.

It is clear there is more environmental awareness within the drinks industry than ever before. Although the EU directive and the Packaging Waste regulations have had some impact, reducing packaging is still driven by commercial rather than environmental factors. Reducing packaging has become a priority for many businesses, particularly multiple grocers that have realised there are real cost savings to be made. Beadles at the WSTA says, “The only way that environmental concerns can be successful is by being part of a business strategy. Without strong commercial reasons it is very difficult to change culture.” 

COORS LIGHT

The beer and spirits industries are also taking a keen interest in reducing the amount of glass they use. Nicola Jenkin, project manager in retail innovation at WRAP, says, “We have been pleasantly surprised at how open the sector has been to implementing changes.”

In fact, WRAP is about to fund a lightweighted beer and cider bottle project following the success of the Container Light project with Coors Brewers. As part of a cost cutting plan, Coors aimed to reduce the amount of glass it used by 9,000 tonnes. It carried out consumer research first to make sure that it wouldn’t harm the brand. The brewer was able to use 13% less glass in its bottles. An additional 10% was then removed after the project. Jenkin says, “We’re keen for mainstream brewers to adopt the streamlined approach adopted by Coors.”

FRANCOLI DISTILLERS

Rather than just focusing on reducing its packaging, Francoli Distillers has gone one step further and established itself as a certified carbon-neutral company. The grappa producer, which is responsible for the reforestation and maintenance of an area of forest in Costa Rica that matches its carbon footprint, was awarded “Zero Impact” status last year after being audited by LifeGate.

Adam Wyartt, European export manager, says, “There has always been an environmental consciousness within the Francoli family.” The company believes in realistic sustainability which is why it has invested in environmentally-friendly measures such as a Wet Electrostatic Precipitator (WEP) to filter the smoke emitted from the distillery with over 99% efficiency.

Wyartt says, “Making grappa is a very eco-friendly procedure as it is made from a by-product of wine. We dry out the leftover pomace and use the seeds to make grapeseed oil. We also put the pomace in the furnace and use it to power and heat the distillation process. We then use the ash to spread remaining nutrients in the vineyard.”
He continues, “Even though it is a significant overhead, we were surprised at how modest the cost of making the transition [to being carbon neutral] was.” As it is still relatively early days the distiller can’t yet gauge impact on supplier relationships. It also has yet to reap any commercial advantages from its decision.

Francoli sells 85% of its grappa in Italy where environmental concerns are not a mainstay, either professionally or personally. Wyartt says, “The country produces and appreciates wonderful looking clothes and cars, as well as great food and wine. Quality and appearance therefore take precedence over environmental concerns. There is not a lot of point to highlighting carbon neutrality to Italian restaurateurs.”

However, Francoli also owns a winery which it hopes to make carbon neutral in the not too distant future. Wyartt estimates that the cost would probably add only 20 or 30 cents to the bottle, therefore allowing it to position itself in the UK market as the first Italian carbon neutral wine.

© db January 2007

Free guidance on environmental legislation is available at www.netregs.gov.uk. Companies can also contact the Environment Agency’s National Waste Registration Unit for advice and information on 0870 850 6506