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Demand up, recycling rates down: what’s the outlook for fibre and paper packaging?

Oct 11, 2021 | Corrugated Packaging, Market Research, Packaging, Packaging Research and Analysis

Demand up, recycling rates down: what’s the outlook for fibre and paper packaging?

Cast your mind back to 2017/18, when China stopped taking mixed recycling waste from Europe. We feared the result would be mountains of unprocessed material, leading to a shortage of paper fibre to use in packaging.

Fast forward a couple of years, and we certainly have a fibre shortage. But this time, we can’t put the blame on the People’s Republic. This time the problem is much closer to home…

As paper packaging industry research experts, the NOA team have been taking a careful look at what has been happening.

China, we believe, is no longer a significant problem, because the issue of taking mixed recycling has eased.

The problem now is squarely to do with global demand for paper packaging coupled with the availability of the recycling waste.

Here’s what our paper packaging industry research has revealed.

Pre-pandemic, waste collection points for cardboard and cartons comprised circa 10,000 retailers i.e., collection from the back of the supermarket. This has now changed to include roughly 100,000 waste collection depots, where kerbside waste is stored.

In fact, taking it a step further, thanks to the rise of ecommerce and its exponential increase during the pandemic, every home is now a collection point.

Clearly, not every home is efficient in returning its cardboard waste for recycling. Some waste will end up in landfill, some will stay in the home indefinitely, and some may be hoarded for a few weeks before being put into the recycling bin.

This all means that a large percentage of paper-based waste is now leaving the recycling chain. Plus, whereas it used to come back into the chain within four days, this is now taking around four weeks.

Pre-pandemic, fibre recycling rates in the UK and mainland Europe were around 85%, but these have now dropped as low as 65%.

Add to this the shortage of drivers to transport waste around then, as one of NOA’s subscribers remarked, we have enough fibre, it’s just in the wrong place!

A word on the green issue, or what we describe at NOA as the ‘green wave’.

When the pandemic hit, as demand for fibre rose so did demand for plastic, simply because we were moving to home food delivery (and you can read our blog here about the impact of the pandemic on paper packaging).

Much of what we were eating came wrapped in plastic, and at the same time we were switching to supermarket value lines, which are invariably wrapped in film, such as bananas, baked beans, cucumbers and let us not forget the panic-buying of toilet rolls!

As we’ve reported before in our packaging insights, many food and drink producers were already exploring a switch over to paper and, when demand for plastic rose, this trend accelerated into a green wave. For example, beer and soft drinks cans moved to carton ‘suitcase’ containers instead of the plastic six-ring hi-cone systems; many products switched to hybrid combination packs, such as meat trays, comprising cardboard with a thin layer of protective plastic on top.

All of this is also contributing to increasing demand for paper.

Other contributory factors are also revealed by our packaging industry analysis. China still has a part to play, because the cost of importing from here has risen thanks to a huge increase in container prices. This means goods such as toys, microchips, graphics cards, phials and, of course, paper packaging aren’t coming across to Europe (or if they are, at a much-elevated price).

Our packaging industry analysis has uncovered a perfect storm: higher demand for paper, coupled with reduced recycling rates. Not because of China, but thanks to our ongoing love affair with paper packaging, fuelled by the pandemic and – of course – increasing environmental concerns, with a wish to move away from plastic.

What, then, are the short-term consequences of this perfect storm? Here are just some of the likely outcomes we’ve been hearing about that consumers could be facing:

  • Christmas produce: will the seasonal shelves be empty, not just because of the shortage of HGV drivers – which is being reported on a daily basis – but because of the shortage of pickers to collect produce from the fields, packers to process poultry (including turkeys!), paper packaging, material and high shipping costs?
  • Books: we heard of one children’s book publisher who is already feeling the squeeze on margins due to the increase in paper prices as a result of the paper shortage. Will books become scarcer and more expensive?
  • IKEA et al: big stores have been suffering from empty shelves for some time, and this is likely to continue.

Could this turbulent time have been predicted? At NOA, we firmly believe this move to a significant increase in demand for online packaging was always going to happen, but it has been brought forward by about a decade.

Will this trend continue? Is it a seismic shift or just a passing phase? Or could it even go into reverse?

In the UK and mainland Europe, the increase in home delivery is significant. Working from home (WFH) is here to stay. Silver surfers are becoming much more agile in using tablets and arranging home deliveries. We see stores moving towards smaller units. Pret A Manger, for example, is opening 100 new stores closer to people’s homes (due to WFH) on more local high streets or as drive-throughs.



Demand for plastic is still growing, but it is starting to slow. In April 2022, the UK is introducing the Plastic Packaging Tax, which will apply to plastic packaging manufactured in, or imported into, the UK that does not contain at least 30% recycled plastic.

Public concern about climate change and pressure to move away from plastic is increasing.

Just this week, the BBC began a series of programmes introduced by Prince William and fronted by Sir David Attenborough, featuring the new Earthshot Prize, an ambitious competition designed to incentivise change and help to repair the planet over the next ten years.

Paper, by contrast, is far more sustainable. Just take a look at some of the interesting facts and figures on the Beyond the Box website, all about cardboard and supported by the Confederation for Paper Industries (the CPI). Few appreciate that in Europe, forests are actually increasing in size, with typically three trees planted for everyone harvested for paper-based materials.

Faced with all this, producers seem unlikely to switch away from paper and back to plastic.

We need to factor in the general move to right size packaging. For example, Amazon trying to avoid using a giant box for a tiny product; similarly, McDonalds moving away from cartons for their burgers towards (or back towards) just using those smaller, paper wraps. Will this ease the pressure on demand for fibre?

With our analysis of packaging industry trends, we’re working on the answers and are preparing two comprehensive new reports, available early in 2022: one on corrugated and a separate report on folding cartons, both looking at demand for paper, waste fibre, and end use markets.

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