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PET bottles are carving a niche

PET bottles accounted for 50% of global soft drinks packaging in 2009, the highest of any pack type, accounting for 303 billion units.  In alcoholic drinks packaging, however, PET languishes down at third place after glass bottles and metal beverage cans, at just 2%, or 7 billion units. Nevertheless with expected CAGR of over 5% from 2009-2014 this pack type is expected to take packaging unit share. 

Dr Benjamin Punchard, head of global packaging research at Euromonitor International, looks at some local examples of where PET bottles are performing well and some where they are not. . .

Wine in PET gains ground in Sweden
In 2010, still red, white and rosé wine were all available in a 750ml PET bottles at the Swedish state alcohol monopoly, Systembolaget. PET bottles have continuously spread to new product areas as they are lightweight, convenient and incorporate excellent closure features.

Although PET for wine was introduced in 2008 it was in 2009 that a number of brands started using this pack type and the pack type started showing real unit volume penetration, taking share from the dominant glass bottle. Many believe that this only marks the beginning of the pack type's penetration into the product category and into the alcoholic drinks market as a whole.

In addition to the cost-related aspects, PET packaging has a case to argue that it is better for the environment. Indeed, the main selling point of the new pack type is that it claims to be environmentally responsible, partly because packaging weight has been reduced considerably.

PET is also convenient and can easily be resealed which gives it the same edge as glass bottles with metal screw closures that have seen very strong growth within the review period. From a distance, it is almost impossible to tell the difference between a glass bottle and the new type of PET bottle that has been designed for wine.

PET is generally considered less prestigious than glass but the new bottles could come to compete even in the high-end segment as they look very similar; only the feel and handling is different.

Russia goes BIG for wine
In May 2009, Ochakovo MPBK ZAO launched still white and still rosé wine in 3 litre PET bottles under the brand Bolshoy Zapas (Big Stock). This represents the first experimentof PET in wine in Russia by a large brand owner, opening the arena for other manufacturers. The new bottle has a convenient closure with handles (replicating the 5 litre still bottled water packaging already accepted by consumers), and is a cost-efficient choice for parties and outdoor events.

Miller Coors develop PET based draft system for US beer consumers
Miller Coors brought packaging innovation to the US beer market with a 'home draft' container that stores 5.7 litres of beer.  Based on a PET bottle in a box with a built-in tap, this packaging combination affords consumers an easy way to store beer in the fridge and a 'fresh pour' similar to a real draft.

The format seems well-positioned to prosper, particularly in light of successes like the Heineken draft-keg. Recalls in some countries because of bursting bottles have caused concern for the safety of this format, although no such recalls have been issued in the US.

Such innovation seeks to increase the brand share of Miller Lite, which is already present in a variety of packaging formats—many of which feature innovative packaging features such as temperature indication.

Local brands discovering PET bottles in South Korea
Lotte Chilsung Beverage Co had an eye on the economy segment with the launch, in January 2010, of their Scotch Blue brand whisky in PET bottles.  In a new small 200ml size, this product is aimed at those for whom the more common 500ml or 700ml pack sizes are too expensive.

In February 2010, the Kooksoondang Brewery launched a clear PET bottle for its premium Takju, an unfiltered traditional rice wine. PET was chosen for its transparent properties, better to reveal the rice wine made with locally produced rice. This pack choice also distinguishes the brand from mainstream rice wine made with imported rice and packaged in green coloured PET bottles or HDPE bottles.

Ukrainians offered 'live' beer in PET
One of the most noteworthy trends in Ukrainian beer is the establishment and dynamic development of a new distribution channel – street kiosks for draught beer sales – which are having an impact on packaging structure in the category.

At the end of 2009, draught beer brands by small regional producers like Riven ZAT and Mikulin ZAT and others started to be bottled directly in street kiosks by sales persons. Consumers can choose between 0.5- 1- and 2-litre PET bottles. 

The development of this new distribution channel was driven by regional brewers which could not access consumers through chained supermarkets or discounters. The unique selling point of brands sold in this way is that the beer is “live” (non-pasteurised) and therefore is rarely bought in traditional retail or foodservice channels in large cities in Ukraine.

This trend is positively impacting the demand for aluminium kegs and PET bottles. However, it should be noted that this distribution channel still accounts for only a small retail volume share (1-2%) of beer sales. Moreover, its long-term sustainability is questionable due to possible legal restrictions as a result of the ongoing government campaign against easy access to alcoholic drinks.

PET moving away from economy in US spirits
The largest US spirits category, white spirits, has for some time been home to PET bottles with this pack type's use for economy products, such as McCormick's vodka in 1750ml PET bottles, driving growth.

In the US, the strength of economy lines in white spirits, such as gin and vodka, have enabled PET bottles to make greatest inroads into glass, and, in 2009, PET bottles accounted for 56% of bottle sales in white spirits.

With the PET bottle now common on the spirits shelf brand owners are trying out this pack type for higher quality products. For example, in October 2009 MS Walker launched Integré Premium Vodka in 1750ml PET bottle, using a heavier design to deliver a bottle that closely replicates a glass bottle. Similarly White Rock Distillery also turned to PET bottles for the 2009 launch on Mount Royal whiskey, using a shaped mold to replicate the effect of embossed glass. This continues the White Rock's strategy of using PET bottles for brand extensions, pack redesigns and brand development.

New 'safe' PET launches for foodservice in Italy
Night clubs and bars are increasingly shifting away from glass bottles to avoid potential disorder and as a result of increasing bans on the use of glass.

Brands, needing to launch alternatives to glass bottles, have turned to the PET bottle. For example, Ceres Italia has launched the “freedom bottle” for the Strong Ale brand, an attractively designed 330ml PET bottle option that is sold in places where glass is not allowed. Bavaria has also launched a 330ml PET bottle option and promoted the new packaging by sponsoring the Music Air festival in Rimini where drinking from glass bottles was also banned.

Lightweighting leads innovation in Japanese alcoholic drinks packaging
Lightweighting has been the order of the day in Japanese alcoholic drinks packaging as brand owners respond to the desire for ecological awareness in packaging.  For example, Asahi Breweries succeeded in manufacturing a 9% lighter lid for its metal beer can, claiming that this will save around ¥500 million and 9,000 tonnes of CO2 annually.  Furthermore, Ozeki, a sake (non-grape wine) manufacturer is to produce lighter glass bottles such it's 270 ml glass bottles, reduced from 175 g to 163 g. These new glass bottles have been available on retailers' shelves since March 2010 and may save up to 300 tonnes of CO2 annually based on the company's claims.

This desire for lighter weight packaging is also benefiting PET bottles, for example Mercian's 1,500 ml PET wine bottle being launched for seven kinds of wine. It is one-tenth the weight of the existing pack type.

Mercian will also launch a 750 ml PET bottle in 2010 for Beaujolais Nouveau wine. This PET bottle is 30% lighter than the previous pack, with an expectation to reduce CO2 emissions by 30%. To ensure the quality of the wine, the bottle is of a triplex structure, using Paul Sapin SA's Multi-Layer PET bottle (MLP). It provides a complete mechanical barrier to oxygen with no scavenger required. Due to technological developments the structure promises to ensure quality is maintained. It is expected to be launched in November 2010.

Spain warms to beer in PET – as long as it is low-alcohol
Economic uncertainty has been a strong barrier for packaging development in Spain, with many launches failing to find favour with consumers. For example the beer leader in Spain, Grupo Mahou, introduced a PET bottle for imported lager in 2007 in an effort to reduce distribution costs. But consumers were not convinced that the taste of the products was not affected by the change in packing, so the company withdrew this pack in 2008. However, Mahou remains committed to the potential benefits that PET bottles could offer in the distribution of beer products.

To develop consumer awareness of PET bottles for beer, Mahou has introduced a 2-litre PET bottle for its range of low/non-alcohol beer brands Laiker and San Miguel 0.0, in addition to the increasingly popular RTD brand Mixta. The new range is offered in discounters and hypermarkets in multipacks of four units, enhancing the perception of increased value in this new packaging. The launch of this new range of alcoholic drinks in PET bottles has been considered a success. This could in part be due to the low-alcohol nature of these products, which puts them on a par with soft drinks where the demand for quality is not as strong, enabling the acceptance of alternative packaging, such as PET bottles.

Private label boosts use of PET in the UK
2010 witnessed the introduction in the UK of PET bottles across a range of alcoholic drinks categories, albeit primarily for private label products at the retail level.

During the summer, major grocery retailer chains Marks & Spencer and Waitrose began packaging their private label wine products in 250ml and 750ml PET bottles respectively. Sainsbury's meanwhile offered its Basics private label white and dark rum products in 700ml PET bottles. Tesco also introduced this latter format on a trial basis for some of its private label spirits products. Notably, Tesco used 700ml PET bottles for private label spirits products in its Tesco Standard range, but not those of its Tesco Value range. The retail chain also offered its private label Napoleon Brandy product in a 350ml PET bottle.

Industry sources predict that PET bottles will achieve most success in white spirits categories like vodka, but expect that their usage will remain largely restricted to private label products.

Taiwanese consumers not sure about beer in PET
Recently the first beer to utilise PET bottle packaging was introduced to Taiwan, by leading polyester manufacturer Far Eastern Group, which supplies more than 60% of Coke bottles for Coca-Cola in Taiwan, in conjunction with Belgium-based beer manufacturer Martens. The new PET bottle is named the Coolerpak and was specifically designed for use with alcoholic drinks. The bottles are manufactured in China and all bottling of the product takes place there as well. However this PET packaged beer, which was first introduced to Taiwan in mid-2009, has been met with a lukewarm response since its introduction. Martens is a relative newcomer to alcoholic drinks and the product is considered to be too light by many consumers. This early association with a poorly performing brand may taint Taiwanese consumer's perception of bee in this pack type and stifle opportunities for more popular local beer to make the pack switch.

Beer in PET may prove too expensive for Chinese tastes
Martens' introduction of beer in PET bottles to the Chinese market in 2009 led to renewed discussion about the use of PET bottles for beer. Technological developments have solved most beer producers' concerns about maintaining the taste of beer. Suntory also used PET bottles for packaging its fruit-flavoured beer. Thus, rigid plastic packaging posted the strongest growth in 2009, although unit volumes are still very low.

Generally beer packaged in PET bottles retails for a greater price than that packaged in glass. Therefore, in the current market, only beer brands which are targeted at middle-class customers who are not particularly price-sensitive employ PET packaging. Local brands such as those from Yanjing also use PET bottles but mainly for exports, with prices considerably higher than beer packaged in glass bottles. Leading players like Tsingtao are still waiting to ascertain the views of consumers. Without the adoption of large local players,

PET beer bottles will only see limited growth. However, with increasing consumer incomes in China, PET bottles have considerable potential for growth over the long term.

PET loses out to beverage cans in Germany
The reintroduction of metal beverage cans inthe beer sector is gradually eating into the share held by PET bottles, as PET seems to have found very little, if any, favour among consumers of alcoholic drinks.

While the number of units of metal beverage cans is expected to rise fast over 2010, PET bottles will likely suffer a drastic fall, and further declines are expected in the forecast period.

The PET bottles seem to have failed to enjoy the expected success among the consumers of alcoholic drinks and this could partially explain the ongoing reintroduction of metal beverage cans in domestic lager by discounters, which had been prominent in the use of PET bottles in beers. Beers such as Holsten Pils and discounter labels such as Adelskronen (Penny Markt/Rewe), Schloss Pils (Netto), Grafenwalder Pils (Lidl) and Maternus (Aldi) have been offered in 500ml PET bottles (mostly brown bottles similar to the glass ones used in beers) with plastic screw closures.

The introduction of PET bottles in beers had partly been a reaction by some market players (like discounters) to the withdrawal of metal beverage cans, but PET bottles appear not to have won a wider acceptance among beer consumers. As discounters reintroduce cans in the packaging of beers, the use of PET bottles for beers is likely to decline significantly by 2014. Key players contend that the reintroduction of cans has been in response to customers' wishes for refreshment drinks and beers in containers that allow for better freshness and longer shelf life and that bring back a valued cultural attachment that had developed in the previous years.

1 January 2011 - Dr Benjamin Punchard