Germán PulidoInnovation Director The AmericasNov 2019

The technology of packaging: innovation for a better and more sustainable future

UN oceans chief, Lisa Svensson

There is a planetary crisis... “we are ruining the ecosystem”

Tsunami disasters Greenhouse effect Over population

The Smurfit Kappa Innovation Journey to Open the Future of Sustainable Packaging

Together

Better solutions for a better planet

Solutions designed for your business

Solutions designed for your business

Is it too late?

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Let's start the journeyof developing sustainable packaging

The Smurfit Kappa Innovation Journey to Open the Future of Sustainable Packaging

https://datos.bancomundial.org/indicador/en.atm.co2e.pc?end=2014&start=1960

Billion tonsCO2

Emissions 2018

https://datos.bancomundial.org/indicador/en.atm.co2e.pc?end=2014&start=1960

Billion tonsCO2

Emissions 2017 4.97CO2 tons per capita

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Source : https://ourworldindata.org/co2-and-other-greenhouse-gas-emissions

2000 2015 2016 2017 2018326ppm 400ppm 404ppm 406ppm 408ppm

Global mean annual concentration of carbon dioxide (CO₂) measured in parts per million (ppm).

CO2

20%

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60% 23% 9% 4% 2%

2016 U.S. Transportation Sector CO2 Emissions by Source

2%

Source : https://www.epa.gov/greenvehicles/fast-facts-transportation-greenhouse-gas-emissions

Light duty vehicles

Cargo trucks Aircraft Other Rail Ships and boats

CO2

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A better cargo truck optimization, could reduce up 15% of CO2 emissions

http://www.theworldcounts.com/counters/shocking_environmental_facts_and_statistics/world_waste_facts

2.12 billion tons…of waste globally each year

http://www.theworldcounts.com/counters/shocking_environmental_facts_and_statistics/world_waste_facts

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1 of the 7 biggest cargo ships183.000 tons loading capacity

22

12.000cargo ships

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Source: Plastics – the Facts 2016 – An analysis of European plastics production demand and waste data

5.8%

ELECTRICAL & ELECTRONIC

8.9%

AUTOMOTIVE

19.7%

BUILDING & CONSTRUCTION

39.9%

PACKAGING

22.4%

OTHERS

AGRICULTURE

3.3%

Major contributors of litter in oceansPackaging is the major contributor

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Food containers Bags

Crisp packets/ sweet wrappers

Beverage containers

Cups for beverages

The top 5 single use items in oceans

account 70% of the total marine litter

Recyclable BiodegradableRenewable

Sustainability in paper and cardboard packaging

100 100 100 100 10091

77 7366 71

8376 73

40 40

0

20

40

60

80

100

120

Paper & cardboardpackaging

Metallic packaging Glass packaging Wooden packaging Plastic packaging

Actual Recovery and Recycling rate in Europe

Waste Generation Recovery Recycling

26

It is not a war against packaging, it is a war against litter

Source: Eurostat 2015 data

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*NOAA (National Oceanic and Atmospheric Administration US/ Woods Hole Sea Grant US)*http://www.greenhome.com/blog/eco-terms-biodegradable-and-compostable

0

200

400

600

800

1000

1200

Paper Wood Steel Aluminum Plastic Glass

Estimated decomposition rates of common marine debris itemsDecomposition years

2 years2 months50 years

200 years

450 years

never

Packaging is a major contributor to the

problem in ocean litter

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However,

However,Packaging protects 10 times more resources (materials, energy, water) than it uses,so packaging creates sustainable supply chains

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How can we balance packaging and environment ?

CO2emissions

Reducing CO2 emissions in cargo transportation through packaging optimization

litterocean

Reducing litter in oceans by avoiding unnecessary packaging material

35

Strategies

36

Strategies

37

38

We have analyzed more than 50.000 supply chains

How many different options are there to pack these 4 “gatito” bags in a box,

and which one is the most sustainable box ?

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18solutions

42

The most cost effective

packaging…

…with the lowest CO2 impact into

the air.

18solutions but,

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A

B

800 miles

5 millionsProducts/year

Colombia

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2.735 2.739 2.736 2.7402.672

2.842

2.758

2.941

2.7622.705

2.959 2.974

3.137

2.932

2.751

3.042 3.0452.974

2.400

2.500

2.600

2.700

2.800

2.900

3.000

3.100

3.200

Based on 5 million products per year, transported 1230 kms (40 feet trucks)

Total logistic costs for 5 million / year (USD$ million)

Cost effective

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2.735 2.739 2.736 2.7402.672

2.842

2.758

2.941

2.7622.705

2.959 2.974

3.137

2.932

2.751

3.042 3.0452.974

2.400

2.500

2.600

2.700

2.800

2.900

3.000

3.100

3.200

Based on 5 million products per year, transported 1230 kms (40 feet trucks)

-US$470,000-16%

Total logistic costs for 5 million / year (USD$ million)

Based on 5 million products per year, transported 1230 kms (40 feet trucks)

546 546 546 546

526

568

546

592

546

526

592 592 592

568

526

592 592 592

480

500

520

540

560

580

600

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Based on 15 million products per year, transported 1230 kms (40 feet trucks)

-66 cargo trucks

Number of cargo trucks required by each solution

-12%

Based on 5 million products per year, transported 1230 kms (40 feet trucks)

Based on 5 million products per year, transported 1230 kms (40 feet trucks)Source : https://carbonfund.org/how-we-calculate/Kilogramos de CO2 emitido para una distancia de 1230 kms : Relación consumo Camión (1368grCO2/Km) vs. Coche (0.160grCO2/Km) = 8.57 (Colombia)

1121 1121 1121 1121

1080

1166

1121

1215

1121

1080

1215 1215 1215

1166

1080

1215 1215 1215

1000

1050

1100

1150

1200

1250

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-135 CO2 tons

Metric tons CO2 emission

-12%

Based on 5 million products per year, transported 1230 kms (40 feet trucks)Source : https://carbonfund.org/how-we-calculate/Kilogramos de CO2 emitido para una distancia de 1230 kms : Relación consumo Camión (1368grCO2/Km) vs. Coche (0.160grCO2/Km) = 8.57 (Colombia)

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-135 CO2 tons-12%

What if we go one step back in the packaging design process ?

…keeping weightcapacity

different size bags

analyzed

…keeping weightcapacity

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212

USD$(000)

Eco – efficiency chartCO2 tons

$512$561

USD$(000)

Based on 200.000 products per year, transported 1230 kms (40 feet trucks)Source : https://carbonfund.org/how-we-calculate/Kilogramos de CO2 emitido para una distancia de 1230 kms : Relación consumo Camión (1368grCO2/Km) vs. Coche (0.160grCO2/Km) = 8.57

8.3” x 4.5” x 12.5” 8.5” x 4.3” x 12.7"

-24% CO2

170

-42 tons

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“If we are looking for sustainable packaging, we must analyze all

possible alternatives”

Conclusion

Real case

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References reduced from 18 to 7

Cargo trucks (CO2) reduced by 61%

Results

Customer Annual savings up to USD$90,000

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Strategies

Developing ecommerce packaging, 100% sustainable

2017

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Source: Euromonitor 2018

$366

BRASIL MEXICO ARGENTINA COLOMBIA CHILE

Ecommerce growth projection Internet retail value in billion USD

2022

$730

$21

$41

$6

$18

$6

$19

$3

$15

$2

$4

USA

96%

183%

80%

94%

233%

378%

Var 22 v 17

Oversized packaging requires additional inner packaging material, which is converted to waste

300% Oversized packaging

ecommerce packaging

Extra costs in transportation Higher CO2 emissions Overuse of packaging material

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Sales portfolioPacking process

Planning for peaks3rd party sales

Loading efficiencyHandling

Delivery modelDestination

Product protection

Internal logistic optimization

Enhanced Consumer experience

Supply chain optimization

There are 12 areas to be considered, that positively impact ecommerce

Real case

Annual savings up to USD$65,000

100% recyclable packaging

Avoided unnecessary material

Enhanced consumer experience

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Other sustainable packaging solutions

Replacement of Shrink film around bottles, with cardboard recyclable grips

100% recyclable, biodegradable, and better printing capabilities

Plastic bag replacing with paper bags

100% recyclable, biodegradable, and better printing capabilities

Replacement of Shrink film around bottles, with cardboard recyclable grips

100% recyclable, biodegradable, and better printing capabilities

Replacement of fruit plastic trays , with cardboard recyclable trays

100% recyclable, biodegradable, and better printing capabilities

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Conclusions

GLOBAL BPP DAY

Join us on an educational and interactive journey towards more sustainable packaging. Packaging which helps, not harms the environment• Lectures from experts for insights• Interactive workshops for dialogue• One-to-one meetings for real solutions

21st of November 2019 Event timings 10:00 -16:00Smurfit Kappa GEC Amsterdam, The Netherlands

Packaging travels, so do our ideas

Invitation

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It is not a war against #packaging, it is a war against waste.

Final conclusion

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Thank you