Sustainability drive may boost fortunes for Swedish metal packaging

Paul Cochrane reports

The Swedish metal packaging sector is trying to maximise recyclability and circularity, particularly in aluminium, as the country works to heighten food security and anticipate future challenges, including the government bolstering food stocks through commitments made when joining NATO.

Sweden’s Krone SEK356 billion (US$33.8 billion) food and beverages market has reported strong growth over the past three years, growing by 6.6% in 2022 on the previous year, according to the latest figures from state-run Statistics Sweden (Statistiska centralbyrån). Germany-based research group, Statista, estimates the value of Sweden’s food sector at $37.92 billion in 2024 and forecast to grow by a compound annual growth rate (CAGR) of 4.93% to 2029.

However, that is not all good news for Sweden’s metal packaging sector. With a largely affluent population of 10.5 million (GDP per head of $56,305 in 2023 – World Bank figures), Swedish consumers in recent years have increasingly adopted a preference for fresh produce, prompting a shift away from steel canned food to cartons, said Felix Helander, a Swedish independent packaging consultant. Sales of organic food has also increased, from EUR800 million billion in 2010 in €2.2 billion in 2020, according to the National Board of Trade (Kommerskollegium) figures.

Part of the drive towards carton packaging has been driven by the long-term presence of Swedish multinational, Tetra Pak. “We have the trees to make the cartons, and we have the Tetra Pak company. Cartons are not very hard to sell to people,” said Helander.

Another potential weakness for Swedish canners is that a majority of food consumed in the Nordic country is imported, at over 90% of fruits and berries, over 80% of fish, and 70% of vegetables, according to figures from the Federation of Swedish Farmers (Lantbrukarnas Riksförbund). Fish has declined as a staple part of the Swedish diet, with a majority of fish now being consumed being farmed salmon, wild-caught cod, herring and shrimp, according to the Research Institutes of Sweden. Traditional fish products such as pickled herring are no longer packaged in cans, but in glass jars.

“In Sweden, we tend to use more glass jars. Canning is typically of pickled herring like matjessill [a mild salt herring, which is made from young immature herrings] or surströmming [a lightly salted, fermented Baltic Sea herring packaged in steel cans due to its strong smell aid], among others,” said Kerstin Eriksson, an innovation leader at Sweden Food Arena, which involves food industry businesses collaborating for an innovative, sustainable, and competitive food sector. “It is something they enjoy way up north; it is not found in the [more populated] south of Sweden, and there are not big sales of it,” added Helander.

Despite this, major companies do have metal packaging plants in Sweden. For instance, Ball operates a beverage packaging plant in Fosie, southern Sweden, near Malmo. The Emballator Group’s metal packaging specialist, Metal Group, has a plant in Ulricehamn in south central Sweden.

Sweden’s imports vastly outweigh exports in certain metal packaging categories, according to data from European Union statistical service, Eurostat. The country imported €7.3 millions’ worth of cans of iron or steel for preserving food with a capacity of less than 50 litres in 2022, and €6.5 million in 2023, compared to exports of €3.7 million in 2022 and €3.3 million in 2023. But trade in cans of iron or steel for preserving beverages with a capacity of less than 50 litres were skewed towards exports, at €12.3 million in 2022 and €10.9 million in 2023, compared to imports of €153,781 in 2022 and €9.9 million in 2023.

Aluminium trade is squarely import-dependent. Sweden imported aluminium beverage can end stock and tab stock of less than 0.2mm, worth €104.9 million in 2022 and €78.2 million in 2023, compared to exports of €187,780 in 2022 and €95,283 in 2023. Imports of aluminium beverage can end stock and tab stock of greater than 0.2mm were worth €1.2 million in 2022 and €2.3 million in 2023, compared to exports of €521,017 in 2022 and €109,985 in 2023.

Greener packaging on the rise

One potential plus for metal packagers in Sweden, going forward, however, is public policy supporting sustainable packaging given the recyclability of cans, with Helander stressing that, since 2017, there has been a shift in preferences for greener materials, driven by the government’s 2030 vision for a sustainable food sector. That is part of Sweden’s commitment to the United Nations’ Sustainable Development Goals (SDGs), as well as European Union (EU) legislation, including the packaging and packaging waste regulation, the ecodesign for sustainable products regulation, the green claims directive and the European critical raw materials act (another EU regulation).

An update to recycling legislation in 2021, following the EU’s single-use plastics directive, was introduced in 2022, including a ban on expanded polystyrene to manufacture beverage containers and for corks and lids. Plastic packaging is required to have at least 30% recycled plastic by 2030, all of which could boost demand for metal packaging and closures.

More widely for the packaging industry, all producers are required to join an approved producer responsibility organisation (PRO), responsible for ensuring reporting to the Swedish Environmental Protection Agency (Naturvårdsverket), while financing municipal collection and recycling of packaging of all types of materials, including metal, on behalf of the affiliated producers. Can makers and fillers must register with Naturvårdsverket, which sets recycling targets. “The main change has come from new rules that have, and will, force the packaging industry to follow the line, which is changing a lot of things now and tomorrow,” said Helander.

National recycling targets for 2029 have largely been met or surpassed within a year of the legislation being implemented in 2022, with 82% of aluminium recycled, according to Statistics Sweden.

In 2023, 89.5% of cans were recycled, some 25,308 tonnes, according to Returpack, a private company jointly owned by the Swedish Brewers Association (Sveriges Bryggerier), the Swedish Food Retailors Federation (Svensk Dagligvaruhandel) and Livsmedelshandlarna, responsible for the Swedish deposit systems for metal cans and recyclable PET bottles for ready-to-drink beverages.

“The general market perspective we see is the same as aluminium can producers – a growing market share compared to glass and PET. We saw can growth of more than double digits in 2023, and 11% this year,” said Tomas Kjellker, managing director of Returpack.

One of the drivers in the rise in aluminium cans is the popular craft brewed beer sector in Sweden. “It really took off about 15 years ago as it is the easiest way for a small brewery to distribute,” said Helander. Sleeve cans are considered cost efficient compared to bio-efficient glass. The $504 million Swedish beer market, according to research firm, IndexBox figures, is however dominated by medium and larger players such as Spendrups Bryggeri AB, Molson Coors Beverage Company, Kronleins Bryggeri AB, Kopparbergs Bryggeri AB, Heineken, Galatea AB, Carlsberg A/S, Budweiser Budvar, Asahi Group Holdings Ltd, AB InBev and AB Abro Bryggeri, according to research group Helix Strategy Data.

Consumption of non-alcoholic beer is also on the rise in Sweden, attributed to government campaigns, said Kjellker – important, given the sales of alcoholic beverages controlled by the state through government retailer, Systembolaget. “Consumption of alcoholic beer is quite static, but non-alcoholic beer in cans is growing,” said Kjellker.

The high cost of alcoholic beverages had resulted in Swedes travelling to neighbouring Denmark or Germany to stock up, but this trend has shrunk in recent years due to higher cost of travel and petrol, said Kjellker. “There’s more [Swedish beer] going out, to Norway, due to their high tax on alcohol,” he added. A major driver of metal beverage cans in the market has been due to a shift in soft drinks packaging away from PET bottles, increasing in unit volumes and market share in 2023, according to Euromonitor International, with total metal packaging retail volumes in Sweden, growing by 6% to 1.3 billion units year-on-year, according to data sent to CanTech International.

Energy drinks such as Naia, Wato, Clean and Red Bull in 330ml or 250ml metal beverage cans have seen particularly large growth among young people. “It continues to explode, last year up 40 per cent, and this year so far by 35 per cent,” said Kjellker. Energy drinks account for around 20% of the Swedish drinks market, compared to 7%, six years ago, he added. However, recycling rates for energy drinks cans are lower than other segments, which Returpack is working to counter.

“It has increased due to a lot of campaigns, but collection rates are around 78 per cent, while for beer is above 90 per cent. Beer is usually consumed at home, so it’s easier to control that package to bring it back into the system, but energy drinks are more on the go-consumption,” said Kjellker.

Future prospects for aluminium

The drive for circularity in aluminium cans is not only being driven by environmental goals. While there are several producers, also including Granges, Nordisk Alu and Crown (which operates three transit packaging plants in Sweden) – the country has only one aluminium smelter. Rusal, a Russian owned conglomerate, runs the Kubikenborg Aluminium (Kubal) plant in Sundsvall in the northeast, producing 135,000 tonnes of aluminium a year, including for the packaging industry.

“Its Russian ownership has been discussed a lot as we are not self-sufficient in aluminium, by far, importing a lot,” said Helander. In 2018, Rusal was sanctioned by the US government, with the ruling later overturned that year to keep operations going. In 2024, the Swedish opposition party, the liberal Centre Party, urged the government to install external management of the Kubal plant to cut Russia’s ties to the company due to the ongoing Ukraine conflict and Sweden joining NATO this year (2024), although Sweden’s current centre-right coalition government rejected the proposal.

The Nordic country’s joining of the Western military alliance is expected to have positive ramifications for the packaging industry as the stockpiling of food will be required for contingency plans in cased of an invasion from neighbouring Russia.

“Since entering NATO, we have to put an effort into storing food. So probably canning can make a return, but we don’t know yet if the government will require cartons, glass or aluminium. What we do know is that we cannot waste food,” commented Sweden Food Arena’s Eriksson.

The drive for improved self-sufficiency in food due to climate change, environmental concerns and NATO membership are all expected to lead to a greater focus on food packaging in Sweden, she added.

“In the future, our food needs to be preserved longer, and packaging will be a big focus – from smart packaging to more digitalisation – as well as being a way of better connecting value chains, which are not well connected today,” said Eriksson.