Single-Serve Beverage Capsules Market Trends

By: Lilli Manolis Sherman 6. September 2016


AMI’s newest industry report discusses timeline of brand compatible coffee capsules and trends.


That the coffee capsules market is here to stay is a given but the transformation of the market with competitive brand compatibles emerging is in full swing as noted by an authoritative comprehensive “deep-dive” analytic report of the global Single Serve Beverage Capsules (aka coffee capsules) industry. Released just last month by Bristol, U.K.-based AMI Consulting in cooperation with Plastic Technologies, Inc., Holland, Ohio. Here are the key points and issues addressed:


• No longer a niche market, the capsules industry has developed into a complex value chain over the years. Back in the mid-to-late 1990s, this segment represented a classic example of an oligopoly—limited to a couple of Italy-centered systems for traditional espresso brewing, (e.g. Lavazza Espresso Point).


• Relatively recently (2000s), as the capsules format became more popularized, brands such as Dolce Gusto (by Nestle), Tassimo (by Kraft, now Jacobs Douwe Egberts) and A Modo Mio (by Lavazza) found their successful, high-margin niches on the market.


• The year 2012 heralded the start of a dramatic market transformation, driven by the change of legal circumstances; the expiration of Nespresso and Keurig design patents, which brought about disruptive changes in the supply chain, creating new opportunities for both end-users and converters to tap into the growing market segment. Notwithstanding some legal battles, these circumstances triggered the development of Nespresso-compatible brands and own label products that could now rely on the Nespresso machines installment base, but offer a more competitive retail price for the capsules. Barriers to enter the capsules segment became lower (both from filling and molding perspectives).


• On the other hand, the supply chain of capsules is rapidly losing its oligopolistic nature and the former dominance of major suppliers has been challenged as the market is expanding. A more fragmented supply chain affects the overall profit pool and the way consumers make their choices. Needless to say, that transformation had an adverse effect on the premium image of the segment: the average price was lowered and the quality of some capsules available on the market poorer (based on OTR and performance in brewing machines). The potential machine malfunction (or misuse) in correlation with compatibles introduced some operational challenges for Nestle and its machine partners having to do with machine servicing (i.e. increased service costs).


• The AMI consultants estimate that all plastic compatible capsules (across all systems) accounts for 22% of the Single Serve Beverage Capsules market worldwide by unit volume. The Nespresso system is the world’s largest selling, with volume of about 17 billion units—that included both aluminum capsules and plastic Nespresso compatibles.


• The development of new compatible offerings is now in favor of the Nescafe Dolce Gusto system (another Nestle brand). The market penetration of Dolce Gusto compatibles is still low at the moment, but it is expected to strongly grow in the comping years. 


Treofan Simplifies Laminate Structure; Boosts Sealing Performance of BOPP Films

By: Lilli Manolis Sherman 31. August 2016

ExxonMobil’s Vistamaxx featured in new five-layer BOPP Film.


Metallocene PE (mPE) elastomers, whether they serve as a component of multilayer film and/or sheet structures, or as an additive that boosts the performance of molded parts are by now recognized as one of the major plastic material technologies to emerge within the last two decades.


A report released earlier this year noted that North America has accounted for the largest share of the global mPE market and will continue in the lead through 2020, due to increasing demand from various end-use industries such as packaging, electronics, and pharmaceuticals.


The report also identified the film segment as the leading application, driven primarily by the continued growth of the packaging industry, followed by the sheet segment, which is driven by end-use applications such as lamination, thermoforming, and machining.


Prominent players in the mPE market are: Dow Chemical, ExxonMobil Chemical, Chevron Phillips Chemical, LyondellBasell Industries and Total Petrochemicals. Just recently, we reported on SABIC’s entry into this business.


One thing that’s clear to this editor is that most of the innovation that continues to emerge comes from savvy plastics processors in collaboration with the material suppliers and brand owners. This is particularly evident in the food packaging industry, which continues to evolve as such partners look to produce better, more efficient, more economical packaging that also manages to be more sustainable and attractive.


Here is a look at a recent example. Global BOPP film producer Treofan, Raunheim, Germany (U.S. office in Winston-Salem, N.C.) has developed a new five-layer BOPP film which features Vistamaxx metallocene-catalyzed olefinic TPEs from ExxonMobil Chemical, resulting in a simplified laminate structure with excellent sealing performance.


Treofan’s aim was to develop a BOPP film for the packaging of instant soups, but one that would also serve well for other kinds of dehydrated powdered products such as spice blends or instant sauces. Current laminates for soup pouches are typically comprised of a 7-9 µm aluminum foil and a sealant, made of PE, with a thickness of 10-30 µm. The PE sealant is either a blown film, adhesive laminated to aluminum foil or directly extrusion coated on the aluminum foil.


The company developed the new Treofan MSB 30, a metallized BOPP film using Vistamaxx in the heat-sealable side, replacing the aluminum foil and PE sealant; it allows the number of laminate components to be reduced from three to two layers. According to Treofan, many brand owners prefer printed paper on the outside of the soup pouch. Instead of printed paper, a reverse-printed BOPP film or a printed PET film can be applied to an MSB 30 produced pouch, offering full product design latitude.


According to ExxonMobil, market reference laminates offer a minimum seal strength of 5N/15 mm, which cannot be achieved with a standard BOPP film as the sealant. Treofan MSB 30-based laminate, however, offers a seal strength of about 8N/15 mm and even higher if desired. Seal integrity (hermeticity) reportedly is also enhanced. SKYE tests indicate a much higher overpressure versus a standard BOPP film. According to Treofan, several brand owners and converters have been running samples of MSB 30 recently. “Application tests of our film usually takes 6-12 months,” said Detlef Hutt, innovation engineer at Treofan. 


Panel of Pros to Discuss Automotive Design Trends at GPS 2016

By: Lilli Manolis Sherman 30. August 2016

Analysts, industry leaders and plastics manufacturers will address expanding use of plastics and composites at this year’s IHS Markit and SPI event.


At the upcoming (Sept. 28-30, in Chicago), GPS 2016: The Global Plastics Summit, hosted by IHS Markit and SPI, attendees will be treated to a panel of industry pros that will address the expanding use of plastics and composites in automotive design. (Last month, Denver-based IHS merged with England’s Markit Ltd. into a global information giant, IHS Markit, headquartered in London.)


Chemical researchers at IHS Markit report that by 2020, the average car will incorporate nearly 350 kilograms (771.63 lbs) of plastics, up from 200 kilograms (440.92 lbs) in 2014. This is driven by increasingly stringent government regulations to meet fuel efficiency standards and reduce carbon emissions.


In the U.S., for example, the Corporate Average Fuel Efficiency (CAFE) standards mandate that carmarkers’ passenger vehicle fleets average 54.5 miles/gal by 2025, and according to IHS Markit estimates, fuel economy must be improved by approximately 50% across the passenger vehicle fleet. This is resulting in the increasing use by automakers of newer-generations plastics and plastics composites.


For the most part, mainstream automakers are initially employing traditional metalworking approaches to weight reduction, as these offer a cost-effective application of known competencies, secure supply chains and more importantly, existing capital equipment. However, automakers are increasingly employing more novel approaches, such as adopting plastics and next-generation composites into automotive design, particularly for larger vehicle applications, according to IHS Markit.


Said Casey Selecman, senior manager of automotive advisory services at IHS Markit, “While metal and metal alloys are still critical to automotive design, automakers are finding innovative ways to leverage plastics and composites into their designs to help reduce vehicle weight and improve efficiency. As efficiency and carbon reduction regulations increase globally, we at IHS Markit expect the use of plastics will only increase as the materials improve and production costs are reduced.”  He also noted that the use of advanced plastics and composites also give automotive designers a freedom of expression that would be impossible with conventional metals, such as steel or aluminum. “Beyond the practical advantages of using plastics and composites, these materials can enhance the design and aesthetic appeal of cars, and while performance, structural strength and safety are key purchase considerations, buyers also look for designs that appeal to the head and the heart.”


The company’s automotive researchers note that cars represent a fast-growing market for the chemicals industry, with global car production expected to rise in the coming years to more than 110 million units in 2025, up from an estimated 88.7 million in 2015. Much of the growth is expected to come from the fast-expanding Chinese market.


Uses for advanced plastics and plastic composites now range from electronic components, through to body panels, lift-gates, seatbacks, center consoles, interior trim, and underhood applications. These materials are often compounded with fiberglass and additives to boost mechanical properties and stability.  According to IHS Markit the use of carbon fibers and polymer matrix composites are enabling car-body weight-reductions of an estimated 25% to 70%, and company chemical analysts expect the market for carbon fiber in automotive manufacturing to nearly double in the next few years.


Said Selecman, “There is still huge opportunity for automotive light-weighting on the horizon—literally tons of weight yet to be removed from vehicle designs using material substitutions such as innovative plastics composites and carbon fiber technologies. Closures, which are doors, lift-gates and hoods, are the easiest options to significantly reduce vehicle weight, and at IHS Markit, we see significant opportunities for those as well as non-critical structures such as seats, instrument panels, and under the hood for engine cradles, pans, covers, and so on.”


The company expects usage of carbon fiber in automotive manufacturing to nearly double from 2015 to 2020, according to Michael Malveda, lead author of the newly published report from IHS Markit, IHS Chemical Carbon Fibers, Chemical Economics Handbook.  “We expect the use of carbon fiber composites in mainstream cars and trucks to increase, but improvements will need to be made in carbon fiber processing technology to make it more cost-effective for mass-produced automobiles.”


Selecman, along with other IHS analysts and industry leaders and plastics manufactures, including Brian Baleno, global automotive business development manager for Solvay Specialty Chemicals, will participate in this key panel discussion.


SPI Bioplastics’ Inaugural Bioplastics Week

By: Lilli Manolis Sherman 29. August 2016

The first ever such event featured educational information, including infographics, reports and blog posts.


With the fanfare that this growing and evolving market deserves, SPI’s Bioplastics Division launched its first ever Bioplastics Week last week. Coordinated by assistant director of regulatory and technical affairs, Patrick Krieger, this digital campaign featured educational information about bioplastics.


As shown by recent studies, such as “Global Markets and Technologies for Bioplastics,” from BCC Research, the global market is projected to grow at a compound annual growth rate (CAGR) of 30% for the five-year period, 2015-2020.


According to SPI, the role of plastics in packaging, manufacturing, consumer goods, bottling and construction is growing thanks to the unique and unmistakable benefits they provide all participants in the value chain. Bioplastics are part of this plastics’ growth story that is helping brand owners and manufacturers find new applications and solutions.


A new report, an informative industry webinar, and a winner for the 2016 Innovation in Bioplastics Award were among the key highlights of this inaugural event.


• “Plastics Market Watch: Bioplastics,” report, which is based on the results of SPI’s nationwide survey on the topic, is designed to educate about the business and the environmental benefits of bioplastics products, and make the case for their increased use. SPI, which formed its Bioplastics Division in 2007, saw the need for such a report as noted by Krieger, “While growth continues in this sector of our industry, we recognize the challenges present in understanding the complex terminology and makeup of bioplastics products.”


As indicated by the 1,107 adults surveyed nationwide, there is little familiarity with or understanding about bioplastics, signaling a clear need to build more awareness. Only 27% of the respondents were somewhat or very familiar with bioplastics; 34% were not at all familiar; after learning about bioplastics, 50% of the respondents indicates they would consider purchasing a product it “was a little bit more expensive” because it was made with bioplastics; and, 57% indicated they would probably or definitely be more likely to consider purchasing a plastic product with the U.S. Department of Agriculture’s Certified Biobased Product seal.


• Bioplastics Week Webinar: SPI invited companies and individuals interested in learning more on how to make biodegradable or related environmental claims about their products or packaging. It included the following presentations:


About SPI’s Bioplastics Division and Bioplastics Week,” presented by Keith Edwards from BASF;


“Avoiding FTC Pitfalls when Making Environmental Claims,” discussed by Sheila Millar from Keller and Heckman LLP;


“Industrial Compostability Claims Checklist,” by Edwin Tam from Teknor Apex.


• The 2016 Innovation in Bioplastics Award, which honors companies that apply bioplastics to innovative, purposeful product design, went to Club Coffee’s PurPod100. It offers consumers a single-serve coffee solution that breaks down fully in typical municipal and industrial composting facilities in as little as five weeks. Said company CEO John Pigott, “Our team and partners developed materials that are industrially compostable. Groundbreaking research produced materials, including a paper lid, a ring using chaff from coffee roasting and a mesh filter made of biobased plastic. Well-known coffee brands are now using PurPod100 to deliver a perfect cup of coffee for consumers who what a better approach to single-service convenience.”


Meanwhile, PurPod100 is the first product to earn certification by the Biodegradable Products Institute and its industrial composting abilities were confirmed by tests at composting sites in the U.S. and Canada. Research from the U.S. Composting Council supports PurPod100’s other environmental benefits such as reduced greenhouse gas emissions and the potential to divert tons of waste from landfills to industrial composting.


The growing phenomenon of single-serve coffee is apparent in office and home kitchens nationwide. According to Club Coffee, in 2014 almost 30% of U.S. consumers were drinking single-serve coffee, with U.S. single-serve retail coffee sales growth 319% between 2011 and 2015 to reach nearly $4.6 billion in revenue. 


Carbodeon to Expand Nanodiamonds Business

By: Lilli Manolis Sherman 24. August 2016

Nanodiamonds have commercially joined the arsenal of thermally-conductive fillers, with applications underway.


Recent industry studies indicate that the thermally conductive plastics market is growing at annual rates of nearly 15%, driven by industries such as electrical/electronics, automotive, industrial, healthcare, and aerospace.


It was no surprise then to see that Finland’s Carbodeon, represented in the U.S. by SiliconSense, Nashua, N.H., has announced that it will accelerate its nanodiamond business and expand manufacturing capacity (read more here). This, enabled by $1.7 million funding it has received from Straightforward Capital, a Finnish venture capital firm. This funding follows major financing already received from biotech and advanced materials sector investor Enso Ventures.


As we reported in late 2015, the company was granted a U.S. patent for its technology which enables detonation-synthesized diamond particles –nanodiamonds (ND)—to be combined with polymers for use in fields such as consumer electronics, LED lighting, automotive and machine tools.


The earth’s hardest natural mineral is also one of the most thermally conductive materials known, so when NDs are mixed in with thermoplastics in controlled amounts, they can enable plastics to conduct heat at pre-determined rates, and/or to be highly wear-resistant.


Sources at Carbodeon confirm that its ultra-dispersed” Diamond ND fillers are already in commercial thermal management applications which involve electronic devices, but confidentiality agreement prevent the disclosure of further information.


Carbodeon’s patented technologies reportedly offer superior performance when used as additives in applications including thermal management materials, metal plating and selected polymer coating applications. There are now different easy-to-use and cost-effective grades in Carbodeon’s portfolio of NDs which are said to enable improved lifetime and conductive performance for electronic appliances and devices, automotive parts, and industrial manufacturing line components.


Available in powder or liquid dispersions, the ND is reportedly fully dispersed into its primary particles without agglomeration. As such, the compounder and end-user can benefit from the entire available ND surface area, resulting in better performance with less material and cost.  ND-impregnated polymers can deliver heat-conducting benefits for products such as LED lighting and mobile devices. The hard wearing properties also make them ideally suited for use in the automotive and aerospace sectors.


The new funding will be used to expand nanodiamond manufacturing capacity, recruit new talent and enhance customer support. Further investments in R&D will allow Carbodeon to continue to innovate and develop new products and applications. Says Carbodeon CEO Vesa Myllymaki, “This funding, combined with our innovative partnerships with customers and partners, will enable us to grow significantly within our key application areas.”


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