What’s Ahead: 2010 North American Glass Packaging Outlook

Upping the Ante, Glass Industry Actively Seeks More Bottles for Recycling

The North American glass container industry worked diligently in 2009 to create more recycling awareness and improve recycled glass collection for bottle-to-bottle recycling, helping to reduce greenhouse gas emissions and use of raw materials, extend the life of glass manufacturing furnaces, save energy, and meet the industry’s 50% recycled content goal by 2013. In the U.S., there are 50 glass container manufacturing plants and 74 facilities that process glass for recycling.

Doubling the U.S. glass container recycling rate (28% in 2008) would allow manufacturers to use 50% recycled glass or “cullet” to make new glass containers, saving enough energy to power 21,978 homes for one year and removing 181,550 tons of waste from landfills every month.

The goal of using 50% cullet in the manufacture of new glass containers by 2013 was the impetus behind the Glass Packaging Institute’s 2009 Recycle Glass Week. More than 50 educational activities and public events in 22 states brought in over 20 tons of glass for bottle-to-bottle recycling, built awareness about the environmental benefits of recycling glass containers, and led to permanent collection locations for glass bottles and jars in Colorado and Indiana.

In 2010, the glass container industry will intensify its efforts to make U.S. glass container recycling successful. This includes helping to improve curbside recycling programs, expand drop-off collection, initiate more on-premise recycling, and build on state bottle deposit programs.

Get details on the 2010 outlook for glass containers:

Unity of Glass Container Manufacturers in U.S. Grows Stronger

Making a Difference through Packaging Choices

Less is More, and What’s Old is New Again

Closing the Loop Attracts Green-Conscious Consumers

More Americans Recycling, But Higher Quality Cullet Requires Partnerships and Innovation

Climate Change Legislation Takes Center Stage

New and Expanded Container Deposit Legislation Pushes Forward

Unity of Glass Container Manufacturers in U.S. Grows Stronger

This past year, Leone Industries became a member company of GPI, joining Anchor Glass, Gallo Glass, Kelman Bottles, Owens-Illinois, Inc., Saint-Gobain Containers, Inc., and Vitro Packaging.

In 2009, North American glass container industry production was at near capacity for the majority of the year. Glass container shipments were down 4.1% from January - October, 2009 (177,217) vs. January - October, 2008 (184,967), according to GPI data. Production of glass containers decreased 4.1% from January-October, 2009 (179,154) vs. January - October, 2008 (186,689).*

*Glass container shipments and production are reported in thousands gross. One thousand gross = 144,000.

Making a Difference through Packaging Choices

Are certain packaging materials "healthier" than others? Can I make an environmental difference by choosing products packaged in recyclable containers or that use recycled content? Consumers are realizing the answer to these questions is “yes.”

Researchers report a trend toward glass packaging as the first choice of consumers who say they care about the environment and their individual and family health.* In fact, nearly 60% of consumers believe glass packaging is “best suited to a healthy lifestyle.” And while 83.1% of consumers think plastic containers have added chemicals, only 11.9% think glass does.

Research also finds a high correlation between what people think about recycling and their actions. If a person thinks recycling is good for the environment, they are nearly 83% more likely to recycle.

The study also discovered people who recycle are five times more likely to seek products in recyclable packaging. And most consumers (78%) know glass bottles and jars can be recycled back into the same package again and again. It’s clear that Americans want to live greener.

*Surveys were conducted by telephone in April and July 2009 by Newton Marketing Research, Norman, Oklahoma, in conjunction with Doyle Yoon, PhD. The survey has a margin of error of +/- 3.7%.

Less is More, and What’s Old is New Again

As consumers increasingly demand reduced packaging that is also fully recyclable, the glass container industry is responding. They are expanding their capacity to use less to create the same top-quality, 100% pure and recyclable glass bottles and jars.

Saint-Gobain Containers recently launched an ECO Series line of high-quality 750 mL wine bottles. The three bottle designs—Revolution, Evolution and Inspiration—use 15% less raw material, saving approximately 25% carbon dioxide equivalent (CO2e) per bottle and using 25% less CO2e for inbound transport. According to Katie Gerber, Marketing Manager of the wine sector for Saint-Gobain Containers, “The series allows for 14% more cases per pallet, which means for every seven truck loads shipped by the winery, they would save one truck load.”

Brands such as Nestle USA, Bonterra Vineyards, and Spiezia Organics, are choosing glass for its premium and pure characteristics and because it is rightfully perceived as healthy for consumers and the planet. According to Paul DaSilva, Packaging Development Manager at Nestle USA, “It was important to us to offer a premium product in a sustainable quality package, like our unique ready-to-drink glass bottle, so that consumers can feel great about drinking our product [Glowelle], but also do not have to worry about sustainability.”

Bonterra Vineyards, currently expanding its line of organic and biodynamic wines globally, admits producing an organic wine did influence the decision to use glass bottles, as the package fits with the authentic and natural qualities of the brand. In 2009, skincare company Spiezia Organics redesigned its packaging to improve sustainability, switching from plastic to recycled glass containers. By converting to glass, Spiezia Organics was able to reduce secondary packaging by 12%.

In times of ongoing economic and social uncertainty, consumers are also seeking out packaging that makes them feel comfortable and provides a sense of safety and security. For many consumers, that package is glass. For example, several dairies have reintroduced glass bottles for milk and other dairy products to meet consumer demand and environmental objectives.

Responding to customer requests for glass containers, one of Canada’s bestselling organic milk companies, Organic Meadow, introduced a new glass bottle called “Traditions” in honor of the company’s 20th anniversary in 2009. Oberweis Dairy increased the financial incentive for customers to return their glass milk bottles for reuse to prove an even more environmentally-friendly business. And, family-owned Shatto Milk Company uses simple and pure glass milk jars, a nostalgic package that also communicates the product inside is fresh.

Until the beginning of last year, Traders Point Creamery was packaging its products in plastic cups. They are now packaged in award-winning clear glass jars. Traders Point Creamery whole milk, chocolate milk, and yogurt are also packaged in glass containers. Based on the success of these products, many other companies have followed suit. Traders Point is a strong believer in glass—it gives the consumer a pure product which is not influenced by plastic, shows the products inside so customers know what they are buying, and is easily recycled.

According to the European Glass Container Federation (FEVE), there could be a return of milk and fruit juices in glass packaging. According to Dominique Tombeur, FEVE president, results of a survey of 6,200 consumers in 12 EU countries published in April show 40% of those surveyed would prefer to buy milk in glass, but only 5% said they were able to do so. And 45% of respondents would prefer glass for fruit juice compared to 14% who used it.

Closing the Loop Attracts Green-Conscious Consumers

Consumers increasingly prefer to purchase products from companies that are environmentally responsible and working to reduce their carbon footprint. Companies and industries that can “close the loop,” or put as much as possible back into the production cycle, reducing raw material use, energy, and emissions, are those that will benefit in the long run.

A U.S. EPA study released in September 2009 finds that 42% of U.S. greenhouse gas emissions come from the goods we produce, consume, and throw away, and suggests there are large reduction opportunities through source reduction and recycling. In 2006 alone, recycling resulted in the avoidance of nearly 183 million metric tons of CO2e greenhouse gas emissions.

And according the 2009 BBMG (a branding firm) Conscious Consumer Report, a national survey of 2,000 adults found 77% of Americans agree that they “can make a positive difference by purchasing products from socially or environmentally responsible companies” and the majority of Americans (9 out of 10) consider themselves “conscious consumers.”

To continue to reduce its environmental footprint, the glass container industry will step up efforts that encourage consumers to recycle glass bottles and jars, challenge recycling systems to provide better quality cullet, and work together to use more of that cullet in the manufacture of new glass bottles and jars.

In 2010, the glass container industry also anticipates a further increase in the amount of cullet going to bottle-to-bottle recycling to create lighter-weight glass packaging. This will give consumer products goods companies the opportunity to offer more eco-friendly bottles to customers, and further reduce their own carbon footprints.

More Americans Recycling, But Higher Quality Cullet Requires Partnerships and Innovation

A 2009 Hartman Group study of 1,600 consumers found the packaging feature that matters most is that it’s recyclable. Three in four consumers, or 75%, ranked the ability to return a package to the marketplace via curbside bins as either “very important” or “important.” Consumers also placed containers composed of recycled content high, at 67%.

And consumers are recycling their glass containers. A Newton Marketing Research survey of 750 households conducted July 2009 found that of those households that recycle, 82% recycle their glass bottles. The majority (69%) of those surveyed recycle through a curbside collection program. Another 23% recycle glass through drop-off collection sites.

This is all good news for glass, but some of what is recovered at the curb for recycling through single stream programs, where all recyclables are collected together, can be contaminated and of low quality. To expand beyond the curb and reach the glass industry goal of 50% recycled content by 2013, glass container manufacturers are looking to new partnerships and initiatives for recovering more high-quality glass.

In South Seattle, Washington, a partnership between Saint-Gobain Containers, the nations’ largest manufacturer of wine bottles, and eCullet, developer of state-of-the-art camera sorting technology for processing recycled glass, will help produce new glass containers made with double the amount of recycled glass—increasing the recycled content from 17% to 35%—with the potential to increase more in the future. eCullet will source locally from curbside recycling programs in the Seattle area and from material coming out of Vancouver, BC’s bottle deposit program.

Aggressive drop-off collection programs in Fort Collins, Colorado, and Kansas City, Missouri, are proving a simple way to ensure high-quality cullet. The “Be world class, sort your glass” program in Larimer County and the cities of Fort Collins and Loveland, in partnership with Rocky Mountain Bottling Company, have doubled the number of drop-off locations and in 2009 expect to capture about 350 tons.

Late in 2009, Kansas City, Missouri, established a network of 60 glass container recycling drop-off locations in the metro area—making up for glass not being collected at curbside. Local Boulevard Brewing Company teamed with DST Systems, Inc. and UMB Financial Corp. to form Ripple Glass, which developed the collection system and a state-of-the-art processing facility. In the first years they expect, conservatively, to take in about 7,000 tons and by year three between 15,000 and 20,000 tons annually, proving a clear model for other communities.

A broad expansion of glass recycling at bars, restaurants, hotels, and convention centers is gaining steam in California, Colorado, Georgia, Indiana, Nevada, North Carolina, and Texas, and proving a key source for clean recycled glass. Legislation that began in 2008 in the state of North Carolina requiring all ABC permit holders to recycle their containers brought in an additional 45,000 tons of glass that year.

We Can Recycle, Houston, Texas, is responding to a huge need for recycled glass locally, and meeting that demand with glass recovered from bars, restaurants and high-rise condos. Most is sold to Longhorn Glass Corp. and manufactured into new bottles for Anheuser-Busch.

Hotels have also jumped in to glass bottle recycling in 2009 and more is expected in 2010. They are finding that once the cardboard, food, and glass bottles are recovered, there is very little left in their waste stream—with many getting close to zero waste. For example, Mandalay Bay Resort & Casino and THEhotel recycled nearly 120 tons of glass in 2008 and are on track to almost double that for 2009. And they promote to their guests how they are “Riding the Green Wave.”

In 2009, the City of Atlanta, Georgia, created a “zero waste zone” in its downtown district, with more cities likely to follow this lead. To date, more than a dozen large generators, including Ruth’s Chris Steak House, Hyatt Regency Atlanta, and several large bars and restaurants, have pledged to recycle with most recovering between 40% and 80% of their waste stream. This includes a large amount of glass, which for some makes up about 80% by weight of their containers.

The outlook for 2010 is the creation of more partnerships and pioneering programs that can generate more and higher quality recycled glass from communities, retail businesses, and other high-volume generators. Glass manufacturers demand for recycled glass to reduce energy and meet enhanced regulatory standards for air emissions will continue to fuel competition for high-quality cullet and open the door for more innovation in sourcing this valuable commodity.

Climate Change Legislation Takes Center Stage

In 2009, Congress moved forward with greenhouse gas (GHG) and related emissions reduction legislation. The House of Representatives passed H.R. 2454, the American Clean Energy and Security Act, which would create a “cap and trade” system to regulate carbon emissions, with the goal of reducing GHG 17% by 2020 and 83% overall by 2050. It is expected that the Senate and Congress will continue to wrangle with climate change issues well into 2010 and beyond.

New and Expanded Container Deposit Legislation Pushes Forward

State legislators introduced over a dozen container deposit programs and expansions in 2009. A major motivator for some of these bills is the fate of the unredeemed deposits. Several states would like to see a significant portion—or all—of the money lapse back into the state’s General Fund, so it may be used to balance their budget.

California, Hawaii, Iowa, New York, Oregon and Vermont each introduced expansion of their existing bottle deposit programs. Connecticut’s expanded container deposit program for water bottles went into effect this year. New York also passed expansion legislation to raise the container “handling fee” and extend the program to include water containers. After numerous court challenges, the law went in to effect in late October.

While the focus of expansions has been primarily plastic water bottles, non-carbonated beverages, such as tea and juice bottles packaged in glass, were also included in several bills. Florida, Maryland, Massachusetts, New Hampshire, New Mexico, North Carolina, Oklahoma, Pennsylvania, Tennessee, Virginia, Washington, and West Virginia all introduced new container deposit legislation that would include glass containers. Some also proposed studies or analyses of existing programs to help determine the viability of consumer deposit legislation for their states.

Boosting state budgets—and recycling rates—is likely to provide a steady drum-beat of container deposit legislation in 2010 and beyond. And glass manufacturers will continue to monitor state legislation to support and encourage those that can provide the largest amount of high-quality cullet without creating new financial disincentives.