Matt Reynolds, Packaging World:
Hi, I'm Matt Reynolds, editor of Packaging World Magazine and I'm here in New Orleans with Dan Felton. He's the president and CEO of the Flexible Packaging Association. We've had two great days of meetings so far, and sessions on flexible film recovery on EPR which is obviously a huge topic, but before we dive in, what's with the Harley gear?
Dan Felton, FPA:
Well, we like to theme up our meetings a little bit. Obviously we were in New Orleans this week and we had a great first night with a live Second Line [New Orleans street parade team], where they escorted us from the hotel via the parade with a hundred a hundred person marching high school band. It was awesome.
But a year from now we'll be in Milwaukee, and we'll start the event there at the Harley Davidson Museum. So we're just trying to promote a little bit and get people excited about next year's conference.
Matt Reynolds, Packaging World:
Good. That's practically my hometown. So next year we expect you to be in leathers.
Dan Felton, FPA:
Alright. Or at least rolling in.
Matt Reynolds, Packaging World:
There you go. So when you kick things off yesterday you revealed some new data, some new research that revealed that the flexible packaging industry is at 51.5 billion converter value right now and 151 billion total economic impact, big numbers. So what does that mean about the health of the industry and what can brand owners kind of extrapolate from that?
Dan Felton, FPA:
Yeah. Well this is a part of a report we do every year called the state of the industry, but we revised the methodology we're using for the economic impact part of that. So the numbers are actually quite a bit bigger than past years, but the key behind that is as we are a strong economic driver in the U.S. with that 51.5 billion direct economic impact from the converters and that goes up to 151 billion with the indirect and induced is that we're a strong industry and the other data we have in that report coming out in a few weeks shows we're continuing to grow. We're continuing to be vibrant. Chasing corrugated is the way I like to say it, but there is no reason to believe flexible packaging is going anywhere. The formats might change, the materials as we'll talk about are going to change, but we're a good strong industry on a big placeholder in the U.S.
Matt Reynolds, Packaging World:
Yeah, maybe even overtaking corrugated.
Dan Felton, FPA:
Well, that's my goal.
Matt Reynolds, Packaging World:
can't have small goals. Good. So EPR was huge here as it should have been. It's on everybody's minds. One of the constant, I guess questions around EPR is are we going to be rolling this out piecemeal across many different states as it is now? Or can there be some sort of federal mechanism to harmonize things? So I guess the question is state level harmonization possible? Can we make it work that way? Or is the federal legislation going to have to happen to get all the ducks in a row?
Dan Felton, FPA:
Yeah, I mean, I think it's a great question and I think we've actually can argue, we've seen a little bit of harmonization in the last three states that have gotten across the finish line Minnesota last year, Maryland and Washington State this year. Or if not harmonization, exactly, a little bit more about what the producers are envisioning it as we've learned lessons over the last few years. Even with to Maine, Maine, first out of the gate, first enacted now came back this year and fixed their law based on what other states have been doing. So right there you can see some harmonization happening there. However, that said, I do believe wherever the next one or two states go, we're going to see some additional different things, which does beg the question, do we get to the point where can, should, will something happen at the federal level? I think all of us have a hope that yes, something will happen. It's probably not going to happen in the next two, three sessions of Congress, maybe just given the political dynamics there. But we're all having conversations as our policy makers at the federal level about looking at EPR I do not believe and think most probably envision or want a 50-state program, but we could have some harmonization. I like to call it some guardrails or guidance from the federal level as we move forward.
Matt Reynolds, Packaging World:
Okay, yeah, that makes a lot of sense. Now you've said, and you spoke to Jeff Fielkow yesterday and he said, and a lot of people are saying that the challenge with flexible films isn't collection per se. You have mechanisms that you can make it happen. You just have to kind of bring the MRFs along. But the real challenge is strong in markets and who you're talking to are brand owners who could potentially be using PCR and so on. So what are steps that brand owners my audience can take to help build that demand pull?
Dan Felton, FPA:
Yeah, and that's what we heard this morning from a couple brand owners who are on a panel this morning is they, yeah, can and want to and should be looking at the use of more recycled content, which if they can help drive that, we'll drive the end market. But I thought it was interesting this morning with a couple of our speakers are turned around and said, Hey, if we want to be using more recycled content than you FPA and your converter and supplier members help us do that. And that was a great message to hear that we're all in this together as we're trying to solve EPR, solve that I look at four components to that being truly circular with, and end markets being the last one, we're all in this together. So brand owners keep doing what you're doing, I would say, and keep looking at the sustainability goals you have, and if that includes recycled content, then come to us and have the dialogue with us so that we can figure out how to do that together.
Matt Reynolds, Packaging World:
That makes a lot of sense.
Now, you can't have a flexible packaging conference without invoking whether it's non-mechanical or advanced or molecular. I think non-mechanical is what we settled on because it covers all manner of different mechanisms. So we've got 25 states now who have basically codified advanced recycling as manufacturing that's safer for food, for food grade, flexible packaging. But you've got some outliers, say Rhode Island and Maryland who might be looking at being more restrictive about it. So what does this kind of divergence say? How is the FPA addressing chemical recycling?
Dan Felton, FPA:
Yeah, well, it's a key tool in the toolbox for us. I was saying you hit the nail on the head in terms of some specific applications for flexibles and films. If you're looking at recycled content in food grade, there are a lot of applications where recycled content is great, but it may be either post-consumer or post-industrial, which hasn't gone through advanced recycling technologies. Our industry is using that like crazy for different applications for film and flexible. But if you want to talk about the higher grade for food content that's more regulated or for pharma and medical, the path forward we see to get more recycled content is advanced recycling. I'm optimistic it's going to continue to be technology that's available. It's growing in the us but it's a key issue for us to make sure that it's again, another tool in the toolbox.
Matt Reynolds, Packaging World:
And the more tools at your disposal, the better equipped you are to be able to deal with any eventuality.
So you already mentioned the two panelists that we had, the brand owner side, that was Pat from General Mills and Teo from Proctor & Gamble. And Pat in particular, he's on our editorial board, so I can pick on him a little bit. He did challenge the FPA to be more proactive with ideas and so on. Let's flip the script on him and what can brand owners, your FPAs customers do to better partner with their suppliers on the FPA side?
Dan Felton, FPA:
Yeah, I think as Pat knows and Teo from P&G, too, is there's more discussion that needs to be happening. And you look at, I mean, they talked about design for recycling today, and what does that mean? Well, if a brand owner has very specific things they're looking at designing, is it possible? And Pat made an interesting comment today even about, he oversees one division of packaging design for a whole bunch of different brands within General Mills, but that they say, ‘Hey, be thoughtful as you're thinking about. Wouldn't this be the nice next best generation of packaging we can do? Is it recyclable though?’
And so there's an onus on them to be able to be talking about the things that are going to fit now within this sort, the new reign, regime, whatever you want to call it around EPR. And while they might be great ideas, do they fit into what's being asked of the brand owners first and foremost out at the EPR states, for example, and how can they help make sure they're meeting those requirements? And then how do we figure out how to partner with them? But we need to hear from them as we are suppliers, vendors, the brand owners and our members customers is more dialogue really. And I'm not suggesting none of us aren't dialoguing with each other. We are a lot, but I think we need more of that.
Matt Reynolds, Packaging World:
Okay. Well, I think rumor has it, there might be kind of a, let's say a channel or a way for increased or improved dialogue. I'm going to leave the floor open to you if you want to break some news on Packaging World.
Dan Felton, FPA:
Yeah, yeah, that's fair enough. So listen, even before I came to FPA, I've been working with a lot of brand owners when I was at my past job at AMERIPEN, is heard very loud and clear, “oh, we can't wait to be working with you when you get over to FPA.” This meaning the brands we're saying that we don't have a formal mechanism within FPA for brand owners. We dialogue with them all the time. As I say, they're the customers of my members.
But after a year of discussion, I'm happy to report that we have formal approval from our board to bring a layer of brand owners into the FPA membership. We'll be rolling that out in the new year, but something people are already hearing about, not trying to take over what other trade who represent a lot of brands are doing, but there is, we heard it today from the two brands up there, how important it is, if it's not necessarily the largest volume of their packaging portfolio, it's one of the most important for them. So if we can put something more formal in place to be having that dialogue between us and them on the collaboration, the partnership, that's the goal of what we're going to be rolling out in the new year.
Matt Reynolds, Packaging World:
Good. So don't ring his phone off the hook yet. This was voted on two days ago, so still some irons in the fire there, but when we get back to Milwaukee next year, I'm sure we're going to have a lot more information and well before that on brand membership at FPA.
Matt Reynolds, Packaging World:
So Dan, great conference. Appreciate the time and yeah, we've got about an hour left, so good luck as you limp to the finish line.
Dan Felton, FPA:
Thank you. I appreciate the opportunity.
