Market development analysis

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  • 1. Market Development Analysis Prepared for the exclusive use of Shelburne Plastics
  • 2. Table of Contents1. Market overview Market size Regional competitors Materials2. Target customers Green Mountain Coffee Cabot Creamery Ben and Jerry’s3. Other possible targets Other yogurt producers Regional dairies4. Next Steps5. Appendix EcoPure Brochure VEDA financing products Northern Community Investment Corp
  • 3. Market Overview
  • 4. Market Size$176 million $409 million 4
  • 5. Regional Blow Molder Competitors (with comparable product offerings) Blow moldingIndustry Company salesRank** (million s $) Graham Packaging Co. LP a1 2,195.00 York, PA Constar International Inc. (P) c 1176 683.70 127 Philadelphia, PA56 Custom Bottle Inc. 20.00E Naugatuck, CT 5656 Shelburne Plastics Inc. 20.00E South Burlington, VT81 Currier Plastics Inc. 12.00 Auburn, NY117 J.E. Roy (Plastique) Inc. 4.90E 81 Pintendre, Quebec 118 56118 Blow Molded Specialties 4.50 Pawtucket, RI Ben-Pak Plastics Inc. 1127 3.10 St. Anselme, Quebec 6**Per Plastic News 5
  • 6. Consolidated Container Corp.Profile• 3,400 employees• 51 salesmen• 71 manufacturing facilities, – 17 manufacturing facilities are located on- site at customers’ plants. – cluster around Philadelphia, MA and southern NH, Southern CA, GA (headquarters) – Canada (1 plant) Mexico (2 plants) Products •One gallon and one-half gallon HDPE bottles for dairyCustomers •A wide variety of DPE and PP containers for juiceCoca-Cola Colgate-Palmolive and other beverageDS Waters Dean Foods •HDPE and PET bottles for laundry detergents,Nestle Waters Procter & Gamble cleaners, dishwashing liquids, etc. Pepsico Reckitt •HDPE, PP and PET bottles for mustard, maple Benckiser, Scotts syrup, edible oils and salsa. •one quart HDPE bottles for motor oil •one gallon HDPE containers for anti-freeze and windshield washer solvent. respectively. 6
  • 7. Graham PackagingProfile• 1,000 employees• 81 manufacturing facilities, – 25 manufacturing facilities are located on-site at customers’ plants. – 850 production lines Products •Retortable PP container for Boost and Ensure adult nutritional beverages;Customers • Aseptic HDPE container for 8th Continent soy-basedChurch & Dwight CloroxCoca-Cola Colgate-Palmolive beverages;Danone Dial • Hot-fill PET containers for juices;ExxonMobil Heinz • Hot-fill PET and PP wide-mouth jar for Ragu pastaOcean Spray PepsiCoFrito-Lay Gatorade sauce, Seneca applesauce, Welch’s jellies and jams andTropicana Procter & Gamble Del Monte fruit slices;Shell Pennzoil-Quaker StateUnilever Welch’s •Lightweight 64 oz. rectangular container for hot-fill juice; • Panel-free lightweight 16.9 oz. container for juices and teas; and • Panel-free 20 oz. container for enhanced water. 7
  • 8. Biodegradable Product EvolutionGeneration 1 Generation 2 Generation 3 Oxobiodegradable Microbiodegradable Plastics Plastics
  • 9. PLA, corn-based plastic• Made and promoted by corporate giants that have significant market influence, such as Cargill, Inc., but it has drawbacks.• Product limitations – Based on a common food source. Significant adoption of PLA will significantly upset the existing corn marketplace. – It imparts an off taste to water when used for water bottles – It has a short shelf life. – It is not easily recyclable and accepted in only in controlled situations – It decays so fast in many landfill environments that it generates methane before the landfill can be capped to tap the methane releasing greenhouse gases. 9
  • 10. Oxo-Biodegradable Plastic• Light naphtha-based plastic (Light naphtha is a highly volatile faction of crude oil that cannot be made into gasoline, diesel, fuel oil, or jet fuel.**)• Most widely adopted in Europe• Offers advantages over PLA – It is invulnerable to water. – it doesnt compete for limited the grain supply – it is stronger, less expensive, and made from an otherwise useless industrial byproduct• Limitations – Biodegrade requires specific environmental factors-oxygen and one of the following three circumstances-heat, UV light, or mechanical stress. – When products made with oxo-biodegradable additives enter the recycling stream in large numbers, the resulting plastic could have a short lifespan if placed in sunlight. 10
  • 11. Microbiodegradable Conventional Plastic• Light naphtha-based plastic, with an microbiodegradable additive• All the benefits of oxo-biodegradable plastics as well as: – It has the same shelf life as regular plastic – Unlike PLA and oxo-biodegradable plastic, it does not biodegrade until it is in the presence of soil micro-organisms in either aerobic or anaerobic environments. – Biodegradation is delayed long enough that there is time to cap the landfills, so the methane is burned off or even used to generate electricity, as is being done in almost 500 US land fills currently. – This generation is recyclable and completely non-toxic to people, plants, and animals, and is made of ingredients approved by the FDA for food contact. 11
  • 12. Microbiodegradable AdditivesHow does it work? The secret sauce…. Product attributes• Many common soil • An additive with the • The additive is flavorless. microorganisms can ability to make • Proven environmentally safe biodegrade plastic conventional plastics • The product constituents are through the excretion of digestive enzymes smell and taste better on the FDAs GRAS (generally and acids but…. than their preferred recognized as safe) list. food sources, such as • Not grain-based. Not• Plastics are not the wood. compete for food supplies. preferred food source for these organisms • That is the only • Fully recyclable. PLA isn’t. reducing the rate of difference between Recycled oxobiodegradable degradation. microbiodegradable and plastic impairs the quality of non-degradable recycled plastic products.• To work, you must conventional plastics. • Biodegrading process is attract the microorganisms ASTM 5511D (airless zone), capable of and ASTM D5338 (soil zone) biodegrading plastic to compliant. the plastic. 12
  • 13. Target CustomersSelection Criteria•Proximity to existing operations•Company with an active sustainability program•Product that leverages existing production capabilities•Market that has environmentally aware consumer base
  • 14. Green Mountain Coffee Sustainability Initiatives• Responsible energy use • Focus on renewable energy • Reducing thermal footprint • Reducing carbon footprint• Waste reduction• Packaging initiatives • Packing film- In 2007, GMCR replaced a layer of petroleum-based material with a layer of PLA in the packaging film used for our Newman’s Own® Organics line of coffees • The Ecotainer- Working with International Paper, we developed an environmentally friendly alternative to conventional paper cups. Paper comes from sustainably managed tree farms and the liner is made from a corn-based polymer which breaks down under proper composting conditions. 14
  • 15. Keurig Sustainability PolicySustainable Packaging Here’s what Keuring is doing Possible Strategies •…actively researching…..”finding a more alternatives to the K-Cup® We are late to the table.environmentally-friendly Portion Pack’s petroleum –approach to this packaging based materials. Option 1-challenge is a big priority for us. •…Life Cycle Analysis of the Define the next generationWe are working on a few environmental impact of the K- offering. We will need adifferent fronts to improve the Cup® Portion Pack. compelling proposition toenvironmental characteristics of •… identifying the right displace the incumbent inthe K-Cup® system, as well as to "environmentally friendly“ the development cycle.mitigate its impact. “ packaging for Portion Packs.Material requirements: Status Option 2-•Protect the coffee inside from • Plan to sell a tea product in a Position ourselves with thelight, heat, moisture, and oxygen renewable material portion Supply Chain team as the– exactly the same elements that pack in 1H ’10. qualified second sourcemake biodegradability possible. • Package with substantive supplier. improvements to follow. 15
  • 16. Cabot Creamery……we understand “Sustainability” to be "living Possible Strategies within our means and ensuring the means to live.” Our fundamental approach to • This is an ideal greenfield opportunity.stewardship and social impact is based on the Propose a development project.triple bottom line of social, environmental and economic impacts. • A price competitive product allows Cabot:  A strong differentiator to the industryCommunity Commitment  A marketing message that ties closely• …committed to helping communities where to the Vermont brandits dairy products are sold.• …donates product to food banks, soupkitchens and shelters. • A price competitive offering allow SP:• …donates cash to charity and non-profit  An industry differentiatororganizations.  A product that has application with a• … sponsorship of local and regional events. variety of diary products• …’Ag in the Classroom’, an educationalprogram for elementary students throughoutNew England to teach children about agri-culture.• …committed to green and clean, Cabotinitiated Vermont’s first polystyrene andpolypropylene recycling program. 16
  • 17. Ben and Jerry’s“We strive to create economic opportunities for those who have Possible Strategiesbeen denied them and to advance new models of economicjustice that are sustainable and replicable. • This is an ideal greenfield opportunity. Propose aBy definition, the manufacturing of products creates waste. We development project.strive to minimize our negative impact on the environment. • A price competitive product allowsThe growing of food is overly reliant on the use of toxic chemicals Ben and Jerry’s:and other methods that are unsustainable. We support  Another clear differentiatorsustainable and safe methods of food production that reduce  Clear parallel to its socialenvironmental degradation, maintain the productivity of the land responsibility agendaover time, and support the economic viability of family farms andrural communities.” • A price competitive offering allow SP:  An industry differentiator  A product that has application with a variety of frozen products 17
  • 18. Potential Targets Other Yogurt CompaniesCompany Location Sustainability Policy•Colombo Inc (General Mills) Methuen, MA Yes•Dannon CO Inc White Plains, NY Yes•Erivan Yogurt (Erivan Dairies) Oreland, PA Yes•Fage Usa Corp Johnstown, NY Yes•Noga Dairy Inc (Dairy Delite) Farmingdale, NY No•North Lawrence Dairy Inc•(Breyers Yogurt Company) North Lawrence, NY Yes 18
  • 19. Potential Targets Regional DairiesCompany Location Sustainability PolicyVermont Dairies•Booth Bros/H P Hood, Inc. Barre, VT, NH Yes Hood corporate Lynnfield, MA•Strafford Organic Creamery Strafford, VT YesOther Dairies•Byrne Dairy Inc Syracuse, NY None Stated•Worcester Creameries Corp Jamaica, NY None Stated•North Lawrence Dairy Inc North Lawrence, NY Yes•Cloverland Green Spring Dairy Baltimore, MD None Stated•Penn Maid Foods Inc Philadelphia, PA None Stated 19
  • 20. Action Plan1. Finalize SMARTvt fact finding a) Review previous Company initiatives2. Define target market requirements and product offering a) Biodegradable product offering b) Focus on coffee and dairy businesses with a strong sustainability commitment • Single serve containers • Yogurt containers3. Build business plan defining the project ROI4. Prepare business proposal targeted at GMCR and Cabot5. Strategically qualify other potential targets6. Contact targets…make presentation7. Define potential state and local funding sources
  • 21. APPENDIX