A look under the hood at Tetra Pak

"A package should save more than it costs."-Tetra Pak founder Ruben Rausing

Aseptic packaging pioneer Tetra Pak (www.tetrapak.com), the inventors of the "juice box," hosted a gathering of international media (group picture at bottom) at the company headquarters in Lund, Sweden, August 23-24. Tour leader Linda Bernier, who is the company's corporate PR director, promised that we would “take a look under the hood at Tetra Pak.”

Our view included tours of the facility’s laboratories and converting operations as well as a nearby customer center that featured a demonstration packaging line. Market and technology presentations were made by management, including Tetra Pak president Dennis Jönsson (shown below), who noted that the company operates 45 packaging plants and 12 research and development facilities. He pointed to trends including retailer-driven industry consolidation, which has accelerated during the past 10 years.

Tetra Pak’s two biggest customers, Mengniu and Yili, both in China, did not exist seven years ago. They are also the two largest dairies in the world.

Jönsson pointed out that despite decades of ongoing modernization, 86% of the world's food is still hand-packed today, and half of the white milk produced remains unpackaged. In that regard, two markets stand out as a liquid food packaging opportunity: India and Pakistan.

Jönsson noted that oftentimes investment in underdeveloped countries requires years before results are seen, such has occurred in Russia. He says Russia represents one of its largest growth opportunities, and that it is seeing "fantastic growth" in Pakistan. It also characterizes Iran as having tremendous potential.

Tetra Pak’s 10 top customers represents 20% of its revenues, with none of those customers in the U.S.; however, the U.S. does represent Tetra Pak's fifth largest market with 6.72 billion containers. By comparison, China used 24.6 billion Tetra Pak cartons last year; interestingly, the market in China centers on the 250 mL single-serve size.

Jönsson also mentioned dramatic differences in consumption trends in large cities, where consumption is high, versus rural areas, where consumption is far smaller.

On the enviro-front, some 21 billion cartons were recycled in 2006, with the goal to reach 25% by 2008, he said.
A recovery initiative in Brazil recovers materials from used cartons, and for which polyethylene is recovered. The recovery operation is located next to a recycling plant. A successful pilot operation will now be scaled up, he noted.

Beverage carton growth in developed countries is essentially flat, ranging from 0% to 3%. Jönsson indicated that U.S. market growth, modest as it is, is for high-end juices transported within the U.S.'s well-established chilled distribution chain.
Source: packworld