Seal Factor

Market analysts are optimistic about the growth of beverages globally, as Asia rises to the occasion due to its sheer population size and diverse consumer preferences. Functional drinks, tea and beer in PET are adding new dimensions to what caps and closures can do. Romeo Corvaglia, CEO of Corvaglia Holding AG tells Asia Food Journal the importance of China and food safety for caps and closures manufacturers.

Functional drinks, tea and beer in PET are adding new dimensions to what caps and closures can do.

Romeo Corvaglia, CEO of Corvaglia Holding AG.

AFJ: What markets are you targeting at this year?

Corvaglia: We want to go to where the growth is. The trend is clear: the big markets with strong growth potential are China, Indonesia, Mexico and the US. Statistics from various beverage market reports predict an increase in consumption during the next five years and principally in these countries. The reports say the US and China are the two largest national markets for bottled water, with Indonesia and Mexico ranked above Germany, which is in the fifth place.

Asia is the growth driver for the global soft drinks market, with China contributing to almost 40% of the region’s consumption while North America accounts for 23% of global soft drinks sales. Mexico is also considered by market research institutes as one of the most attractive markets for packaged drinks investment to 2013.

Different markets require distinct strategic approaches. Today, new packaged beverages are characterized by products such as tea and functional beverages as bottlers invest in new product development and brand diversity. The result is a new highly competitive global beverage market, leading to a growing need for adequate closures to seal these products. Closure is not only a part of packaging but a preservation resource, a marketing element and a safety guarantee.

China faces a rapidly growing volume in aseptic cold fill and it is important to have the right selection of bottles and closures.

AFJ: How is Asia important to your business?

Corvaglia: The consumption per person of non-alcoholic beverages in Asia has increased in the past years. The beverage closure market grows through the recession and Asia is leading this growth every year. The trend is towards costs and material savings, as we see an opportunity in bringing economical cap solutions to this market. In addition, closure design is becoming an important element of brand strategies for bottlers in Asia. This represents a big opportunity to us in terms of innovation and the development of customized solutions for specific customers.

Despite the world economic crisis, major companies have announced investments in the region over the next few years. As demand for packaged beverages grows at a steady rate in Asia, it will drive the demand for closures, especially in China, India and Indonesia, according to market reports.

We want to bring to Asia our latest innovations in light weighting such as our new light closures and short necks, which could be very interesting for bottlers, especially in China, due to the cost, energy and material savings obtained through the application at certain volumes. Existing necks in China’s bottled water industry will be replaced in the near future by short necks, which are reduced from 3.15 gm to 1.75 gm and current closures from 2.00 gm to 1.00 gm.

AFJ: How is Asia different from Europe and the US?

Corvaglia: The volumes in China are so large that bottlers prefer to integrate the closure production from the beginning, which means the bottler produces closures independently. In this case, we offer them our closure designs and mould technology. We work with machine suppliers and deliver our moulds to them in order to include them in a closure production system.

Existing necks in China’s bottled water industry will be replaced in the near future by short necks, which will be reduced from 3.15 gm to 1.75 gm and current closures from 2.00 gm to 1.00 gm.

We delivered our first closure production system in 1993 to Tianjin, China and to Watsons in Hong Kong in 1995. In the US, this vertical integration rarely occurs since 2006 and in Europe two years ago, as it is dependent on certain large sales volumes.

Plastic closures in China are applied in beverage sectors such as water, carbonated soft drinks, juice, tea, sport drinks, dairy products and beer. Filling processes such as hot fill and aseptic cold fill (ACF) are used. The country now faces a rapidly growing volume in ACF and it is important to have the right selection of bottles and closures. Before selecting a machine, packaging must be planned in detail and bottlers who come to us from the beginning can receive in-depth knowhow for a successful closure production.

There is also a general trend towards one-component closures from two-component ones. China has been using one-component closures in its beverage sectors as bottlers realize cost savings. This is the same for Europe.

AFJ: What do you think of today's cap/closure solutions for PET beer?

Corvaglia: The beer market is demanding the biggest quantity of closures globally with standard plastic closures being the most dominant beverage closure type. Plastic packaging is increasing in comparison to glass packaging due to weight reduction and resistance of the material (lower lesion risk).

The common issues concerning beer in PET bottles are oxygen permeability, the loss of carbon dioxide and gas permeability, which has a direct influence on the taste of beer. The development of plastic packaging for beer goes from barrier systems for PET bottles to new capping technologies and design.

China will soon be the largest beer consuming country in the world, not because of its per capita consumption but per market share. And approximately 90% of beer in China is currently packaged in returnable glass bottles.

While there are opportunities for us as closure designers and manufacturers in the development of beer packaging in new formats such as PET, we have to be realistic and observe that glass bottles and aluminum cans will continue to be the most applied packaging in the beer industry. There are however a few markets, such as South Korea and some countries in east Europe, where the concept of beer in PET has commercially been accepted.