The Context

The existing regulatory framework in the EU promotes use of ecological packaging. One of the most important elements of European public policy in this area is Directive (EU) 2019/904 on reducing the environmental impact of certain plastic products.

The directive stipulates that EU Member States must remove several categories of disposable plastic products, including food containers made of expanded polystyrene (EPS/XPS).

From 3 July, the deadline for transposing the Directive into national law of every EU member state, the road to the use of organic food packaging throughout the Union is clearly marked and irreversible.

The use of ecological takeaway food packaging is becoming a pressing necessity due to the legislation and an issue given that the EU market has depended entirely on their imports from Asia (mainly China) by the end of 2021.

The News

In premiere, a 100%-ecological and compostable rigid takeaway food packaging made in EU is available as of February 2022.

The new range of products is made entirely of wood fiber acquired from the EU market.

The new range of products is made by BFG Packaging at its factory in Romania, with highly automated technology, following the completion of a EUR 20 M investment.

This is a milestone for the European industry. The new range of products presents the first alternative to imports from Asia for rigid takeaway food packaging that is 100% ecological and compostable, made in Europe.

Raw material

The new products are made 100% from wood fiber.

The wood used in the production of the new range of products by BFG Packaging comes entirely from the EU market, mainly from Scandinavia.

Benefits

Operational

No more production shortages

BFG Packaging honors all orders for its partners from existing stocks that are created permanently.

Order-based production can suffer blockages and delays in the event of a surge in demand. For this reason, BFG Packaging has decided to create stocks for the entire range of environmentally friendly and compostable products made by the company before making the first sales and to keep this stock of products permanently updated.

Short logistic chains

Producing inside the European space will allow access to the entire European market through much shorter logistics chains, compared to imports from Asia. It also eliminates the risks of logistical bottlenecks associated with international maritime trade.

Short delivery time

Fulfilling orders exclusively from stocks and short supply chains will allow a cumulative impact that reduces delivery time to few days, or at most a couple of weeks. This is a significant advantage over imports from Asian markets, which take months to deliver.

For example, deliveries from China involve very long delays, firstly because orders must be integrated into production scheduling and secondly because shipping poses challenges (finding an available container, identifying shipping space, risks and duration of shipping on such a long distance).

No more long-term blocked funds

Imports from the Asian market, and especially from China, involve both significant down payments and, in most cases, the advance payment of the full amount due before the products are shipped. For a period of several months, the buyer thus has significant funds blocked, without actually having the goods and thus without reaping their benefits.

No currency risk

Unlike transactions made on the Asian market, all transactions are made in EURO, eliminating the risk of exchange rate fluctuations. Thus, an unknown importance disappears, which can affect the financial conditions of the transaction.

No more geopolitical/political risks posed by international commerce

Imports from outside the European market are also associated with certain geopolitical / political risks, where unforeseen developments may even affect international trade. This risk is eliminated by importing from a member state of the European Union.

For example, numerous factories were completely shut down in China in 2021, both in the fight against the spread of the new coronavirus and as a way to address power shortages, a situation that has not occurred in the European market.

Reputational

Lower carbon footprint

Long supply chains are an important source of carbon emissions. Avoiding transcontinental shipping and replacing it with a short, intra-European supply chain will help reduce the overall carbon footprint.

Such a decision will have a positive impact on the solidity of its message, or claims about a sustainable and responsible business model towards the environment and communities.

Supporting EU economy

The purchase of products made in the EU, made in their turn entirely from raw materials originating also within the European single market, has a positive economic impact horizontaly on other european businessess, supporting jobs creation and generating additional revenues for EU member states.

Therefore, the decision to replace imports from China with purchases from within the EU market will show a renewed commitment to the market in which they operate.

High quality

Due to the very strict quality standards implemented at the level of the community block, the products made in the EU have a reputable benefit of incorporating the latest technologies and having the highest quality available.

The trust and appreciation, not only of the companies, but also of the final consumers is higher in the use of products made in the EU, than in the case of those coming from other markets outside the community space. This appreciation will extend as an additional attribute to the corporate brand of the distribution companies and of their clients.

Sustainability

The purchase of ecological rigid takeaway food packaging made of wood, sends a strong message to promote a responsible attitude towards the environment, for the ultimate benefit of present and future generations.

Overall characteristics

The new range of products match the highest standards of ECO food packaging. They are:

Rigid and strong
Oil resistant
Water resistant
Suitable for microwave and traditional oven
Heat sealable
Biodegradable
Compostable

Production details

At the beginning of 2022, BFG Packaging completed the first phase of its investment in a new production unit dedicated to the range of ecological rigid takeaway food packaging 100% ecological and compostable.

Thus, since the beginning of 2022, the new production facility has become operational.

BFG Packaging is now working on the second phase of development of the new production unit. The second phase is expected to be completed in early 2023.