The Talking Point: Esko explores sustainability intelligence

0:23Geert de Proost: Welcome to the latest Talking Point. I'm Libby Mumford, Editor at Packaging Europe, And I'm really pleased to be joined today by Geert de Proust, Director of Product Offering at ESCO, and Susie Stitzelin, Director of Product Management at ESCO. Thank you for joining me today, both of you. Now, I'm really fascinated to hear what you have to share with me and the audience on this talking point. But firstly, I'd like you to introduce ESCO. I'm sure a lot of our audience know you're already in the packaging industry.

0:58Susie Stitzel: Esco is looking after the entire packaging supply chain. That means all the way from a brand having product that needs APs or multiple pieces of packaging, a primary, secondary, tertiary pack, and from all the way from specifications of that packaging, internal loops, internal stakeholders, and getting aligned on that piece of packaging with regards to marketing, with regards to color, with regards to content and statements. all the way to approvals on the brand side. And then the handovers to pre-media, who typically look after the artwork, and then all the way to converters. So within the converters, very much from the onboarding phase all the way to the production floor, and then returning the goods back to the brand.

1:46Susie Stitzel: That's kind of what our applications look after. So really an end-to-end process across the chain.

1:53Geert de Proost: And don't forget also the Flexo suite, where we have a lot of software as well that helps drive some very nice CDIs, the plate-making devices. So on the converter side, both hardware and software. On the brand side, a lot of software.

2:10Susie Stitzel: And sustainability grows across hardware and software. So we're very eager to talk to you about that.

2:17Geert de Proost: And I'm just going to dive straight in there and ask about regulations as my next question. How do you see, you know, your customers from brands and suppliers being affected by all the sustainability regulations? For sure, everybody has been affected by this in one way or another. It's interesting because here, obviously, based in Europe, I'm based in the U.S. And the regulations are a little different. The U.S. is a little bit far behind, behind Europe in terms of those regulations. And it's also quite scattered. You know, it's not a national initiative. It's more like state by state, which makes it super challenging.

3:00Geert de Proost: And so I think what I hear from our customers is that, you know, particularly if you're a global entity, it's just becoming really, really difficult not only to meet those regulations, but just to keep up with them. I mean, compliance is one thing, but just understanding where they are and what's changing and what's coming has been really challenging that I hear certainly from the brand side. And then I know Hirta has done a lot of research and discussion with customers around PPWR and things like that. So a different perspective in Europe, I think, right?

3:35Susie Stitzel: Yeah, Europe, it's really everybody. I mean, obviously, the 12th of August was just a good month ago, which was really the all systems go date. A lot of the people that I've spoken to the last couple of months are only just starting to wake up, which is amazing. And so that means that brands that weren't really aware before, typically they are the mid-tier, mid-tier brands, not so much the global brands. They basically knew what was coming and knew the impact of that. And they're already like in the process of embedding sustainability items into their processes. It's not like a big spike for them.

4:05Susie Stitzel: It's like turning the strategy into just daily operations on the brand side. But then the converters, of course, need to play ball because regulations are, you know, perhaps to the brands or they're impacted through EPR schemes and whatnot. But they can't do this alone. They can't lower the EPR scheme alone. They need their suppliers and the suppliers will need them. It's kind of literally a chain. And so everything rolls up to the brand. So one can't work without the other. So it's a team sport as it typically is. But now it's particularly a team sport in order to comply and to get on to this continuous improvement.

4:38Susie Stitzel: And that requires digital data. And obviously, this is what we're all about. And that's not a simple ask. It is really complex, but meaningful. And as I said, it's a perfect way to get the combination of compliance and continuous improvement, both on sustainability and on profitability. J.

4:56Geert de Proost: That's really interesting to hear both of your perspectives from the US and Europe. So I do appreciate you both joining this discussion today. I'm going to go on to another really deep question. What is the problem with sustainability data? And where do you see the biggest struggle in reporting on sustainability? Oh boy, that's a big one. And it's interesting because we, You know, we constantly talk to our customers and particularly collecting the voice of customer from the converters. We've been doing a lot of research there. And what the converters say is that, you know, it's a little ad hoc for them.

5:37Geert de Proost: And so every brand wants slightly different pieces of information in a slightly different way. And so it's like, I get the request and I respond. I get the request and I respond. And so it's a little bit challenging because there doesn't seem to be, there is no real standard of what's required. And so it's very, very challenging, I think, for our converter customers to comply. But they want to. They want to help. They want to be in the game. They want to help their customers. And I think the ones that organize their data the best and are able to respond quickly to these brand requests are the ones that are really going to be in good shape.

6:18Geert de Proost: Because it's no longer, it's not negotiable anymore, right? And so, you know, anybody who has that sort of data, you know, and can supply it, you know, as necessary is going to be a winner. Collecting the data even internally is hard, though, right? Here to me. Absolutely.

6:37Susie Stitzel: It is a big problem. The other problem is, so it's gathering the data and, you know, it's in all kinds of shapes. You name the format and for sure there will be a specification or some sustainability data. But then it's like a bit of a mess and people employ people just to go through the mess and to make sure they deliver the right information to the customer. But the other fundamental problem, I think, is that sustainability data is typically still seen as, oh, the substrate and the composition of the substrate. Whereas we're saying, no, yeah, it starts with that. And even if you have that house in order and you have all the specifications of the materials, monolayer, multilayer, every single component in all gory details, it doesn't mean that everything goes according to plan as that SKU goes through the chain.

7:27Susie Stitzel: Because now you're adding foils, you're adding perhaps some windows, you're having some wonderful black pigments that turn recyclability into a jug. Look, the definition of sustainability data is everything to do with that piece of packaging and not just the materials. And I think that's a misconception. And especially the people, the PPWR is moving from, is it recyclable to, will it be recycled? Now the scope's even bigger. So, okay, let's not get overwhelmed. Let's get started with the data. make sure we structure the data, digitize the data, and make data and the SKUs part of one and the same, let me call it an asset map, for argument's sake.

8:10Susie Stitzel: That is a digitized way of defining everything that's got to do with that piece of artwork. It is the images, it is the logos, it is a statement, but it's equally the materials, it's the ink and the adhesives. And the brand can define those and then hand them over. I mean, ultimately they're not going to print someone else or multiple people will print. And perhaps then use not using the exact specification, but as close as possible. And then you have to kind of like ask the specification and we call it dependent specification, which is converter specific. And I think that's the, it needs to move in that direction.

8:45Susie Stitzel: You go to sustainability conferences very often, razor sharp focus on materials. And that's critically important, right? Because obviously it starts with material being really recyclable. So it is much more complex than that.

8:58Geert de Proost: Every time I've gone to these conferences for years now, you know, it was materials, materials, materials. And now, finally, it's the whole process. I mean, it's, you know, people have to, you know, start reporting scope three emissions, for example. And so it goes way beyond material. It goes into the production floor and how things get produced and how much waste there is, you know, even waste on sheet, which we think of as, you know, something over here. It's not a part of the final pack, but it's the evil of getting to business, getting it done.

9:31Susie Stitzel: So yeah, I think it's a journey. You saw materials, then EPR came, then you had all these companies on EPR. Where is the data? Oh, okay. Hang on a second. The foundation is not there. It's the data. And interestingly enough, it's not always one or the other. Recyclability and carbon may be in conflict with one another. So you'd find the best match between those. I don't have an application that deals with palletization. That's basically going to now bring in these carbon capabilities so that you can instantly look at, okay, my pallet is put together and formatted in a way that we minimize carbon, which today is typically a long-winded process with multiple people involved and across multiple days.

10:14Susie Stitzel: So there is a way to kind of combine data with experts that do assessments on carbon and assessments on recyclability. And it's that combination, large data on the SKU in the broadest sense of the definition, and then assessment on carbon and recyclability on an ongoing basis. And of course, guidance through the process that what was the intent is essentially being produced. Lovely.

10:41Geert de Proost: And I think this really leads into my next question. You know, what is ESCO's role in solving these problems and how does ESCO plan to, you know, address these issues? use. Yeah, I think one of the things that's kind of interesting about this process is that we sort of would focus on sustainability in sort of these silos that as the packaging moves, you know, from the brand all the way through. And instead, it really needs to be embedded in every part of the process. And even at the point where you're just deciding what the packaging is going to be, you can already start to get some clues about, you know, is this one, is A better than B?

11:24Geert de Proost: Make some choices at the design stage, which we didn't used to do as much as we should have. And so I think those design tools are really helpful in terms of right-sizing the packaging, in terms of choosing materials, in terms of, you know, how do we actually get through the supply chain and doing that upfront instead of much later. And then, of course, there's the production part which, you know, Hirt, I'm sure you have something to say about that on the production side. But the design part was where we kind of, you know, we kind of didn't pay that much attention until it was almost too late.

12:00Geert de Proost: And so, you know, it might be shipping a lot of air because we didn't optimize everything for the supply chain. So the design, I, you know, I'm a big fan of all the way through the process starting right up at design. But then when it hands over to the rest of the process, Hirt, that's. Yep.

12:17Susie Stitzel: And then the rubber hits the road. And the good news is that on the converter side, it's absolutely perfectly possible to combine profitability with, you know, reducing your scope three, for instance, talking about the carbon side and things. The way that you plan jobs on presses, instead of using spot colors, use expanded gamut, and combine that with smart planning, would dramatically reduce the amount of waste because your make ready time will fundamentally decimate. And so using less material, using less ink, using less energy, that fundamentally reduces your scope three as a converter. But that also turns you into a better partner to the brands because they don't have the control.

12:58Susie Stitzel: But as a converter, you are scope three to the brand. So there it's really interesting. And what we really want to do in that process is, again, we'll look at it end to end, that the intent may be X, but the result may be fundamentally different. And we need to make sure every step of the way, not that everything's in place right now, but that's the North's vision. We have all these capabilities that are used across the chain. We're in a position to make sure that the intent is kept intact across the different steps. And that includes, for instance, something that may not be seen as sustainability, but one of the big impact consequences of the PPWR is a constant flow of SKU changes coming into the converters with, hey, a new material here, that new material changes the color somewhat.

13:43Susie Stitzel: So there is work, work, work, work, work. So the need to automate that process is higher than ever. Because if you don't automate, the net result will be that your carbon will go up. Your scope three will go up. And automating is the only way, you know, for a variety of reasons to solve that also to solve your, and make sure that you keep your, your competitive edge and your profitability as a company. So, yeah, we look at, at again, like the, the different companies that we address, we were addressing the entire process also for the sustainability. Yeah.

14:19Geert de Proost: Yeah, for sure. Sure. I think there was one more thing I was thinking now that we've both talked about both ends of this process. Up in the design phase, there are design decisions that you can make that will affect what happens in production. For example, a folding carton. We don't print one folding carton. We print six on a sheet or however many on a sheet. They're all nested. And sometimes how you design that initial carton will change how much waste you have on sheet or how well you can optimize sheet usage or how easy it is to blank it out of the sheet, pull it out of the sheet. The two go hand in hand.

14:54Geert de Proost: And, you know, the good thing, I think from Esco's perspective is that because we have tools across this chain, we do have that data thread. We do have that data thread that we could pull all the way through the chain that is very, very helpful in a way that, you know, if we were just doing the design tools or just doing pre-press or just doing, you know, printing presses or something like that, we wouldn't have quite that data thread all the way up to the press and even beyond because it does affect printing presses, die-making presses, finishing all the way through.

15:28Susie Stitzel: And it facilitates recording, right? Let's not forget that if multiple converters around the world do exactly the same, what is meant to be exactly the same job, they're going to be using different materials, but you need to have a trail, a digital trail of who uses what. And that is essentially what brands are expected to report on. So that reporting is definitely facilitated by that central source of truth across the different players that are touching any given SKU.

15:59Geert de Proost: Thank you both for giving me such a sort of comprehensive view there. I would like to ask you, how would you like the industry to be remembered, say in five years when it comes to the topic of sustainability?

16:12Susie Stitzel: For me, sustainability becomes another domain. So we have structural design, we have palatization, pre-press, we're planning, all these very, very color, very specific domains. Sustainability is another one. That means you have to define it. You have to enable people to do certain things. You have to embed it in the process, just like you do color and structural design and everything else. And you have to manage it across the chain. So, you know, number one, I'd like to be remembered or like ask it to be remembered as the one that brought data to the forefront for the sake of sustainability as well as operational efficiency.

16:52Susie Stitzel: And the digital trail, you know, the auditable trail across the different players in that chain. If we can pull that off, I think we've achieved something to the benefit of the entire industry.

17:05Geert de Proost: Agreed. I think the one other piece I would add is, yes, bring all that data together and bring it to the forefront so that the industry can do it, but also make it just automagic. You know, it's just it's just it just happens. You don't you know, people don't don't have to do a lot of effort to to do this, that the software solutions should provide this data to you so that it becomes easy, easy to deliver, easy to comply. and that would be the one thing I would add on top of that. I would love it for ESCO to be the company that sort of makes that happen and that people just are able to do their regular jobs and in the course of doing that, all of this data gets collected and reported seamlessly.

17:50Susie Stitzel: Yeah, it's taken us 20 minutes, but I'm going to say the word. AI is going to be a very, very useful piece of technology there to do. Agreed. But AI needs the data, let's not forget. So that's the focus initially. making sure that everybody has access to the right data in a digital fashion and a structured fashion. Yeah, for sure.

18:10Geert de Proost: We think AI, you know, AI at least today needs a lot of data to feed it. ESCO has a lot of data in its solutions, so that's a good thing. But, you know, it won't be able to do it on its own. Thank you both. And, yeah, I really do agree there from my sort of vantage point in the industry. I can see that data really is kind of the backbone is the word that I would use when it comes to sustainability. I'd really like to just ask, just to finish off, if there's anything you would like to add, you know, obviously the talking point today is about embedding sustainability intelligence into the packaging value chain.

18:49Geert de Proost: Is there anything you would like to add to this conversation? We did go into the AI a little bit and that's a big focus for us right now. Well, but then I think, you know, for ESCO and the ESCO solutions, AI is bigger than sustainability. AI has something to bring to sustainability, but it has something to bring to design. It has something to bring to some intelligence to bring to, you know, finding, you know, the right solutions and making recommendations to people. I think one of the things that we see a lot in the industry is that it's getting harder and harder to find skilled labor. and this is where a lot of people have a lot of tribal knowledge and then off they go they retire or they leave and that's a place where I think AI could potentially help less experienced people but guide them to still make the right and still make decisions but make the right decisions so I think that's one area where we see a lot of guiding work being done by AI it's still I mean packaging is still a craft and an art let's let's be honest it's one of the things I love about it And I think giving people all the information they could possibly use to make the right decisions, I think, is where AI could really shine in the packaging industry.

20:05Susie Stitzel: Yeah. And a good example of where it's linking sustainability with profitability is in the planning phase. That's where the tribal knowledge is. Planners are the most senior people in an organization. It's all in between the ears and it's in the head. They know it. But the complexity is going up and up and up and up. How do you now know if you need 2 ,000 of those and 5 ,000 of those and 7 ,000 of those variants from the same order? How do you now know whether you're planning it in even remotely the most optimal sequence? And if you don't do that, then basically, again, your carbon's at risk, your cost is at risk, your scope 3 is at risk.

20:40Susie Stitzel: And that's kind of a good example on the converter side, at least.

20:43Geert de Proost: Yeah, for sure.

20:44Susie Stitzel: It's easy to talk about.

20:46Geert de Proost: Yeah, for sure. perfect thank you both so much for sharing your expertise with us today we really do appreciate it and thank you to our audience for listening to this particular talking point we'll see you on the next one thank you bye

21:23Thank you.

21:49Thank you.

22:21Thank you.

22:48Thank you.

23:17Thank you.