European foodservice trends: Industry ignorance, complacency and the threat of Asian expansion

16 Feb 2024 --- Quick service restaurant (QSR) packaging is due to undergo substantial changes that high street chains and SMEs will need to prepare for in Europe. The sector faces unique challenges due to its special reliance (currently) on single-use formats and the pollution and health threats these designs pose to the public. 

The extent of these burdens and the potential for reusable formats to reduce footprints continues to be a source of scientific dispute, which is directing the negotiations over the Packaging and Packaging Waste Regulation (PPWR), due this year. 

According to Eamonn Bates, a public affairs consultant and lobbyist for 360 Foodservice, a group whose members include Starbucks, Henkel, and H.B. Fuller, ignorance among QSR players is still the biggest hurdle to progress. 

“The single biggest threat is the trinity of ignorance about where environmental activism, politics, and government policies are driving us in practice, a significant degree of complacency in most companies, and a lack of long-term strategic vision across most of the foodservice packaging industry.” 

“The EU’s Single Use Products Directive should have surprised nobody. The pointers were there for over a decade. Too many were blithely unaware. Others just assumed it would never happen. And virtually nobody had a plan. And the same is happening with the revision of the EU’s packaging and packaging waste law. There will be a lot of panic in April when they find out what is actually coming,” he says. 

Facing the inevitable? 
Bates says industry players, many of whom have been fighting to lower mandatory reuse targets in the PPWR, need to accept that difficult changes are inevitable. 

Takeaway packaging will soon need to meet stringent reuse targets in the EU.“The only way to challenge this [ignorance] is to wake up and smell the coffee, which will increasingly often be served in a reusable and not in a single-use container. This is likely to be driven by national governments rather than the EU. Many companies are failing to prepare to adapt business models.” 

“Right now, it looks like all beverages consumed in-store in the bigger operations will have to be in (plastics, perhaps glass) reusable cups,” he says. 

Opponents of reuse models, like the European Paper Packaging Association (EPPA), say that the PPWR targets remain the biggest problem and must be changed before they are implemented. 

“Ideologically-driven policies stand as the biggest challenge for the foodservice packaging industry. The PPWR proposal is a prime example of this,” says EPPA director general Matti Rentanen. 

“By placing so much emphasis on reuse at the expense of other packaging solutions, the Commission tabled a highly ideological text that will create significant costs for the environment, consumers, but also waste management and production lines, as well as the hospitality industry in general: a full EU value-chain will be struck.”

However, others, like Sean Flynn, media outreach and communications officer at Zero Waste Europe, say promoting reuse in the EU will be a major environmental advantage in the long run. 

“It’s true that the European foodservice packaging industry faces significant challenges, but these challenges also present opportunities to challenge the status quo and transition toward a circular economy model that prioritizes reuse and sustainability. The PPWR presents this opportunity by encouraging businesses to adopt tried-and-tested solutions to prevent waste and prioritize resource efficiency.” 

Consulting failures? 
The EPPA’s strong stance against forcing reusable models on QSR is based on numerous LCAs, for which organizations like ZWE present conflicting LCA findings. These conflicts present a problem for legislators and industry players alike since independent analyses usually (if not always) support the interests of the business or group commissioning them. 

Bates says that “another challenge is the fact that policymakers and regulators everywhere simply do not understand food service, and they often fail to consult properly. As a result, regardless of whether we agree with the end objectives, we get legislation that is not fit for purpose. We cannot go on blaming others for this.” 

“An example is the European Commission’s current idea of setting quantitative targets for introducing reuse systems at the level of individual foodservice operators,” he says. 

“In the real world, it makes no sense to require 20% of an individual operator’s sales to be served using a reuse system. How do you do that? Is it 20% of each different product line, or one product line that represents 20% of all sales, or 20% of all outlets operate uniquely with a reuse system?”Cheap Asian produce is undercutting European business and undermining sustainability efforts, according to Bates.

“A smarter way is to look right across the foodservice sector and work out where 100% reuse systems can be introduced feasibly, sustainably and in a way that promotes the emergence of a European reuse system sector that can lead the world. The corollary to that is to accept that there will be many situations in which single-use systems are the only feasible and sustainable option, provided they are fully circular, which brings us back to collection and recycling.”

The threat from Asian markets 
Another central challenge the European foodservice market faces is illegal and unfair competition from imported Asian products that are non-compliant with EU rules and considered unsafe by regulatory standards in the bloc. 

“National control authorities do not understand what is happening, so they do not act. Even if they do understand the issue, their limited resources are targeted to higher priority issues like the drug trade or products that may have a high risk of harm, like dodgy electrical goods. We need to find ways to make this a priority for them,” says Bates. 

R&D investments in Europe are being undermined because non-compliant imports enter the market at low prices “because the packaging offered cuts corners,” usually by not meeting food contact materials requirements, he explains. 

Chinese dumping, particularly of metals like aluminum, has been a problem for decades. In 2022, European Aluminium took the European Commission to court over its decision to suspend anti-dumping duties on Chinese flat-rolled products, which do not meet local standards and leave local companies undercut by lower prices. 

Bates asserts a rush to push reuse systems for foodservice too far too fast will exacerbate this issue and again promote the market for Chinese, Indian and other Asian companies. 

“European companies need time to develop reuse systems and the high quality, safe, reusable products to go with them,” he says. “But Europe no longer makes injection molding machines to manufacture reusable plastic containers. So, the market will be flooded with cheap, non-compliant Asian-made reusable containers, undermining the emergence of the European industry.” 

“This is how well-meaning legislators shoot European companies not just in the foot but in the heart.” 

By Louis Gore-Langton