We are excited to announce that as of February 1, Wood Mackenzie is a portfolio company of Veritas Capital, a leading investor at the intersection of technology and government. Our focus remains on providing you with the best intelligence, analytics, data and tools to ensure you are making the best data-driven business decisions with confidence.  

Read more in our news release here. 

Case Study

Making materially better choices

A case study of the packaging sector


Let’s take a hypothetical business to illustrate the challenges facing companies, and the value chains that support them, operating in the context of the materials transition. The construction and infrastructure sectors are the biggest consumers of materials globally, but, given the evidence all around us of our failure to manage packaging waste, it’s packaging firms that are in the public eye.

The first step that 21st Century Packaging Co needs to take is to select the right business model for its particular product. Circular business models – which are based around minimising the material impact of a product or service – have been given a huge boost by the Sustainable Development Goals and by organisations such as the Ellen MacArthur Foundation. The approach is often simplified to a focus on:

  • Reducing the amount of material used. Soft drinks companies, for example, have gradually reduced the weight of their bottles to reduce their plastic content, and many packaging applications have moved from rigid to flexible wrapping for that reason.
  • Re-using products to minimise the need for new material inputs. These are less common in the packaging sector, but experimentation is underway. Pepsico purchased Sodastream at the end of 2018 to tap into this trend, and Loop is trialling an innovative delivery-and-collection model in selected markets, with disposable packaging replaced with more durable alternatives.
  • Recycling to capture material post-use and displace the need for new inputs.

21st Century Packaging – like so many businesses – will continue to use disposable packaging and concentrate on the Recycle element of circularity. Its next step, then, is to determine the right material to use. This will vary according to the product, but will include decisions about the appropriate weight, strength, barrier and optical properties required of the packaging material – and the environmental impacts of each option.

As we can see with the example of drinks packaging, it is rarely the case that there is an ‘obvious’ choice, and the best material may change from location to location, depending on local context (water usage may be more of a concern if operating in a water-stressed location, for instance).

Let’s assume 21st Century Packaging eventually settles on PET. Its next challenge is to explore how to collect and process the post-consumer waste so that it can be returned to the value chain. In the plastics value chain, we can see this approach being supported by consumer-facing brands through public commitments – and the requisite budget – to include recycled material in their packaging. Nestle, for example, is putting US$2 billion aside to pay the higher prices necessary to secure recycled inputs.

Materially better outcomes: two scenarios

21st Century Packaging has put the materials transition at the heart of its strategy, to act responsibly and in line with its customers’ expectations and regulatory requirements.

If other companies in the sector act in the same way, what will that mean in terms of plastics production and waste generation in the future? 

Two scenarios focused on the major packaging polymers – polyethylene (PE), polypropylene (PP) and polyethylene terephthalate (PET) – help us to explore the answer to this question, in the report, "welcome to the materials transition".

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