Circular Economy Solutions: Fredric Petit & Neil Cameron, Emerald Technology Ventures


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This blog is an Innovation Insights video podcast transcript. In this episode of Innovation Insights, Emerald’s Neil Cameron and Fredric Petit discuss Circular Economy Solutions. Click here to watch or listen.


Anandhi Gokhale:
Welcome to Innovation Insights, I’m Anandhi Gokhale from Emerald Technology Ventures. I’m joined today by Neil Cameron and Fredric Petit to talk about the future of sustainable packaging. Neil and Fredric are veterans in the advanced materials and chemicals industries, bringing diverse and valuable perspectives to Emerald, so I’m very excited for our conversation today. Fredric, maybe we can start with you. You’ve been in the corporate world for many years now before joining Emerald more recently. Would love to hear your story and particularly what made you make the change.

Fredric Petit: Yeah, thank you, Anandhi, for the opportunity. And you’re correct, I spent 24 years with a corporate called DSM, a life science and material science global player, and most of the time, I was in the chemicals and the plastics business. I had several roles on the business side, including sustainability director, where I appreciated to see the opportunities that sustainability provides to corporates. I was an innovation director, where I learned that innovation is only limited by what you can do by yourself, and open innovation taking fruits of everything which is happening outside the corporate world is very valuable. And I was global business director, where you have the responsibility to bring it all together to leverage the competence of the organisation, to make a change and contribute an impact, not only on the profitable bottom line, but also on the bottom line of the planet and the people. Then for two and a half years, I was CEO of a startup called Vibers, developing more sustainable packaging materials, and last January, I joined Emerald Technology Ventures basically to bring in my experience from the corporate world and for the startup community, and supporting corporates for startup trends in bringing fruitful connections. And together with Neil, I will be leading the new sustainable packaging initiatives.

Anandhi: Neil, you’ve been with Emerald now for quite some time, what drew you to the world of venturing?

Neil Cameron:
Yeah, so the thread that holds it all together for me is advanced materials. It’s always been the underlying passion to everything. If it has mass and occupies space, then it’s interesting to me. But specifically, what I enjoy about venturing is, I guess, two things. And the first is kinetics, the speed with which things can happen. It’s the now of our business. It’s all well and good to think about solving the planetary problems for our great-great grandchildren, but in the venturing world, what we’re trying to do is solve a problem now, this year, next year, and that’s really exciting. The passion of now is wonderful. And the other wonderful thing about venturing is the passion of the people with whom we get to work. Every day, I get to talk to interesting people who are doing interesting things in interesting places, and any boring day is my own fault. There’s simply no excuse for a boring day. So those two things together are perhaps the reasons why I enjoy venturing most.

Alright. Jumping into our topic for today, which is the future of sustainable packaging. From buying packaged groceries, to takeaway containers at your restaurants, and deliveries from ecommerce, we use plastic packaging every day and it’s clear that we cannot live without it. Fredric, what trends are you seeing emerging and what are the challenges that companies in the packaging value chain are facing?

Yeah, you’re fully right. Packaging is on the growth, and especially over the last period where we have the pandemic, we see packaging everywhere. Also, the growth of the ecommerce is bringing more packaging on our front door, and also plastic packaging especially is growing very fast. And this makes sense. Plastic packaging is lightweight, it’s transparent, it’s easy to design, so providing the convenience that the customers want. It has excellent barrier properties, so keeping your fresh food fresh for a longer period, extending the shelf life, and most important of all, it’s very cheap. So plastic packaging is literally everywhere. The issue is, is that most of the plastic has one big disadvantage. When it’s not properly taken care of at the end of life and it ends up in nature, it’s not biodegradable and it will survive for a long period. And every one of us has seen the pictures of the plastics piling up in nature and in the oceans. And why is that? Well, basically, there are two elements that come into play. One is the circularity itself of the plastic packaging. Many plastic packagings are not designed for end of life, let alone for second use. So, they consist of multilayer flexible packaging, finding optimal balance between functionality and cost. But also, many rigid packaging solutions. You see the use of multi-materials which are not easily recycled in the current mechanical recycling infrastructure. But on the other hand, a lot of the plastic, even when it’s designed for recycling, is currently not captured and not being recycled. If you look on a global scale today, 40% of all the plastic packaging is landfilled, about 25% is incinerated, 20% is littered and ends up in nature, and only 15% is basically recycled. This is a big issue, but on the other hand, a big opportunity, and society has woken up to this challenge and its governments. And there’s also new initiatives like the Alliance to End Plastic Waste or the New Plastics Economy Global Commitment by the Ellen MacArthur Foundation, who bring in together corporates to address this problem.

Anandhi: So how can corporations then be prepared for this rethinking? And maybe, Neil, you could take this question, what can corporations do then to stay resilient and then proactively prepare early for this future?

It’s interesting to follow how big corporations have evolved over the 15 years that we’ve been following the packaging space. And traditionally, the simple answer was to use less packaging, right? Generally, there was a trend towards light weighting and lower cost packaging. But what we see over the last three years is a paradigm shift in the effort that corporations are dedicating to being more circular in their packaging solutions, and we see their efforts divided really, or their near-term efforts anyway, divided into two main families of activity. On the one hand, we see them looking much more rigorously at the advanced materials that they use in their packaging solutions. So on the one hand, it’s looking for ways to reduce their CO2 footprint, maybe that means using this 15% of recycled material that Fredric was referring to or helping to increase that 15% and making that number bigger, maybe it’s about getting more out of the packaging that they’re using. Traditionally contain, protect, inform, but maybe more than that, maybe also communicate, maybe also sense, maybe also deliver feedback on where the packaging is, maybe circularisation in that respect. Maybe it’s all about design for end of life that Fredric was referring to also. But interestingly, in parallel to the whole advanced materials answer to the question, there’s also a digitalisation answer to that question, because as we move towards e-commerce and digitalisation, people are looking for new solutions that deliver intelligence. So maybe it’s about better sorting. Maybe it’s about using artificial intelligence in sorting. Maybe it’s about developing new business models direct to customer or packaging to service, circular loops, you can think of lots of ways in which industrial IT can add value to the packaging universe, and this is critical. But really the most important thing, I think, it comes down to gap analysis. There are very, very large gaps in between where we are today and where we need to get to, and that’s where our corporations are doing, and I think that’s what we as a whole need to do. The best and most important path forward is to identify the largest and most significant gaps and then try and sell them, you can think about, the simplest example is the gap for recycled PET where there are millions of tons of unspoken for capacity, where there’s capacity demand and simply not capacity availability in the next five to 10 years, corporations require it and it’s not available, so these are gaps that need to be filled and provide enormous opportunities.

Anandhi: Fredric, you mentioned Open Innovation before, what do you say are the critical success factors for open innovation?

Fredric: Yeah, a very relevant point, and I had experience at DSM to see what the value is of open innovation and how many outside insights it’s gonna bring to the company. When you’re looking at the packaging value chain for me, the key word is collaboration and collaboration in two ways. It’s a collaboration between players in the existing packaging value chain, so between voluntary producers, converters, brands, retailers, but also folks use the waste management companies and recyclers, because if you design a new, plastic raw material, you need to know how it will play out on the customer needs, but also how it will play out in the end of life sorting and recycling process. The same, if you are a converter and you’re using some specific labels or DSFs of Incs, you wanna know end of life, how it impacts the chemical recycling process. So that’s a key success for the collaboration among the existing players in the packaging value chain, but also collaboration with outside players, with new players, we see an enormous growth of capital flowing into the startup communities, and we see a lot of new initiatives of new entrepreneurs, seeing opportunities to capture some value of these unmet needs in the packaging value chain. So, you see the budget for open innovation to work with outside companies is a critical success factor, and not only getting to know those, but also assessing the start up communities and looking for the best ways, how to integrate them into your business. I think those are our key success factors moving forward.

Anandhi: Before we wind up, Neil, if you could share with us some of the most innovative technologies that you’ve come across that are really positioned for disrupting the future of sustainable packaging.

Sure, the pace of innovation has increased dramatically over the last three years in sustainable packaging. And I would argue that during COVID time, it’s increased even more. Nothing quite so exciting as entrepreneurs that are locked in their basement thinking of great ideas. And so the business plans that we’ve reviewed over the last year and a half of being truly quite exciting, and they range through the entire circle of value chain, where it goes, it goes from alternative feedstocks to converters and secondary packages, it includes ancillary material suppliers, it includes logistics, it includes retail waste collection, sorting end of life circulation, the whole circular value chain is represented in the deal flow that we’ve been looking at recently, but in our existing portfolio, I guess I would single out a couple of companies, one is face change solutions, a company in North Carolina that delivers thermal stability in logistics. You can think about vaccines that need to be shipped around at minus 70 degrees Celsius, or you might think about food that needs to be shipped around at minus 10 or minus 20 degrees Celsius, ice cream or chocolate that it mustn’t melt when it’s being shipped around, at 10 or 20 degrees Celsius or even last mile delivery of hot food, which has to be delivered hot to your front door step, and there are various solutions for that, but what Face Change delivers is a solution which is recyclable, compostable, reusable, reduces waste and is bio-based. So, it’s a planet-friendly solution that protects perishables between where they’re coming from and where they’re going to with relatively low stress on the system that’s doing the transportation. Another one that I would highlight is Metgen, a Finnish company in our portfolio that started focusing on the delignification of cellulose, but came to the realisation that actually what they were removing was a valuable product, and lignin can be used as the barrier coat and has been used successfully in a barrier coat, and their metin shield formulation delivers is bio-based alternative for fibre packaging board, and it’s quite an interesting evolution for that company. So we could talk for hours and hours about innovation, but those are the two that I would highlight in this conversation.

Anandhi: Neil and Fredric, it’s been a real pleasure speaking with you. Thank you so much for joining us on this Edition of Innovation Insights.