Amazon kicks more plastic packaging to the curb in favor of a new paper

By Mike Feibus

In its first U.S. plastic-free fulfillment center, the retail giant has come up with a lighter, stronger paper packaging that consumers can recycle curbside

Amazon.com recently announced it has exorcised plastic packaging from its automated fulfillment center in Euclid, Ohio, a milestone on the path to eliminating plastic packaging from its U.S. logistics centers.

The development is both an accomplishment and a sobering reminder of what lies ahead on the $1 trillion global packaging industry's long road to sustainable packaging. Amazon, for one, has been vague about when it can expect full elimination of plastic packaging in the U.S. even as it intensifies these efforts in Europe.

Abandoning plastic is no easy feat. The material is so pervasive and enduring because the industry has blended different plastic resins to produce packaging that's impressively inexpensive, strong and light. But the combination of materials is also why plastics are so difficult to recycle.

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That's why less than 9% of all plastic containers and packaging is recycled, with three-fourths ending up in landfills, streams and streets, according to the Environmental Protection Agency. Paper products are far easier to recycle in part because there aren't different ingredients to separate. As a result, more than 80% of paper and paperboard containers are recycled.

For the long haul, Amazon(AMZN) and others are investing in materials that are as strong and light as plastic and as easy to recycle as paper. But that will take a village, as the plastic-like materials -- some of which haven't even been invented yet -- will also require new recycling equipment and processes.

Less than 9% of all plastic containers and packaging is recycled.

In the meantime, Amazon and others are working to replace plastic packaging today, with paper that can leverage existing curbside recycling infrastructure. For one, the company is transitioning to recycled paper filler away from plastic "pillows" to protect items inside boxes. The filler is curbside recyclable. This summer, the company also announced it is phasing out plastic-padded packages in favor of flexible paper bags and envelopes.

What's more, Amazon says it created a new paper box that's lighter than traditional corrugated boxes, is protected from moisture by a new coating, and it, too, can be recycled.

Paper, please

Amazon's packaging initiative reflects a broader preference for paper over plastic, fueled by a growing intolerance for the environmental scars the material leaves behind. A 2023 survey found that 55% of North American consumers intend to buy more from companies that are reducing or eliminating plastic packaging, up from 49% two years ago.

And it's no wonder why. The globe produces more paper and paperboard packaging: 41.9 million tons versus 35.7 million tons of plastic, according to the EPA's latest figures. Yet more than four times as much plastic -- 27 million tons compared to 6.4 million tons of paper packaging -- ends up as waste.

Industry is motivated to respond. In fact, the top three priorities for packaging innovation are to develop new materials, devise better production processes and trim the amount of materials they use, according to a recent poll of decisionmakers by Industrial Physics.

In addition to developing lighter, more durable, paper packaging, Amazon and the industry have been investing in new plastic-like packaging materials. For example, U.S. researchers recently developed a promising process to use bacteria to help produce biomaterials that are easily recyclable.

Amazon also is partnering with the U.S. Department of Energy's National Renewable Energy Lab to develop processes for breaking down plastics so they can be recycled more easily or disposed of safely. As well, Indian recycler Lucro Plastecycle is working with Dow Inc.(DOW) to develop processes to recapture and reuse some of the most neglected plastic materials.

Researchers recently developed a promising process using bacteria to produce biomaterials and eventually, packaging, that is easily recyclable.

Companies also have found ways to slash the amount of packaging per shipment, developments that eliminate waste and emissions regardless of the packaging material. For one, Amazon and others have developed machines that produce made-to-fit corrugated packages.

The online retail giant also has been working with manufacturers to minimize external packaging by shipping more products in their original packaging. Last year, more than one in 10 packages shipped without any Amazon-added wrapping.

Others are contributing to the trend as well. Instead of packaging every datacenter rack and server, for example, Lenovo Group(HK:992) now saves more than 100 pounds of cardboard per rack by pre-installing unpackaged computers to its enterprise customers. Thanks to that innovation, the electronics manufacturer shipped nearly a third of all servers sold without packaging.

And in retail, some companies are working to trim the amount of plastic they use by selling higher concentrations of detergents in smaller containers, designing thinner packaging and increasing use of recycled material. Earlier this year, Unilever's(UK:ULVR) Dove brand launched a refillable roll-on deodorant that uses 56% less plastic than its disposable alternative.

Progress so far

It can be difficult to gauge whether companies are on track to achieve environmental and climate goals, because progress isn't linear. It comes in fits and starts. Electric vehicles(TSLA), for example, are proliferating faster than charging networks, and the resulting range and ease anxiety among consumers risks stilting demand. As well, many homes and businesses are replacing combustible-powered equipment for electric options in areas where energy utilities themselves are still powered by fossil fuels, namely natural gas(NG00).

As for next-generation packaging, it could take a decade or more before the industry makes a wholesale changeover to new materials with the best traits of plastic and the recyclability of paper. And until producers can churn out these as-yet undeveloped ingredients in volume, cities can collect and process used containers and recyclers can break them down for reuse, the impact won't show up in year-to-year progress data.

So it's good to see the industry invest in interim steps like Amazon's plastic-to-paper conversion, made all the more significant given Amazon's reach in U.S. households. This means we can count on an impact right now.

Mike Feibus is president and principal analyst of FeibusTech, a market research and consulting firm. Reach him at mikef@feibustech.com. Follow him on X (formerlyTwitter) @MikeFeibus. He does not directly own shares of any companies mentioned.

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11-01-23 1020ET

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