High oil begs packaging question: Paper or plastic?
Tue Apr 12, 2005 03:59 PM ET By David Brinkerhoff
NEW YORK, April 12 (Reuters) - Paper or plastic?
It's a common question at the check-out line, but don't look for cardboard to displace plastic milk bottles any time soon, even as petroleum-based plastics drive up costs for shoppers and food companies.
Food company executives on Tuesday said the rising cost of petroleum-based materials is trickling down to North America consumers, but not enough for them reject plastic's advantages over paper: portability, fewer leaks and an ability to reseal.
"Consumers tend to go for the convenience, safety, save-me-time features and not worry about whether it costs another penny or two on the price of the product," Graham Houlder, Unilever NV's Packaging Global Network coordinator, told a paper industry conference in New York.
Oil, which hit a record high price last week, is a big component in plastic, which has rapidly replaced paper in North American food packaging.
Consumer goods companies, like chemical makers and other manufacturers, are feeling the pinch of petroleum prices, which have climbed nearly 40 percent in the last year.
But if shoppers can live with higher prices, so can food companies, which shy away from tinkering with the habits of picky consumers.
"If there were substantially higher oil prices for a longer period of time, measured in years, I think you would see a move," toward paper, said Mark Pincott, a purchasing executive with Mars Inc., a privately held candy maker.
He added that shoppers get accustomed to foods in certain containers.
"For consumer goods companies to make a shift, there would have to be something major driving that and it's going to take time, probably quite a lot of time," Pincott said.
Prices would have to overshadow the powerful draw of convenience.
Added Unilever's Houlder: "While we are suffering under the increased costs, I don't think it's going to be a key driver away from plastic packaging solutions."
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