Jim Scott, JES Packaging PackExpo ‘09 Las Vegas October 6 th, 2009

Man vs. Clamshell: A Lopsided Fight by David Segal, NYT, 9/27/09 “… companies want packages that are easy to transport, display products in a highly visible way and are hard to steal … The point is to create a package that cannot be opened and closed surreptitiously. That way, no one can remove anything and put the package back on the racks without it being obvious.”

 History of Trend toward PCR Plastic Packaging  Sheet Extruders’ Imperatives  Thermoformers’ Imperatives  End Users’ Imperatives  Retailers’ Imperatives  Recyclers’ Imperatives  Why Trend toward 100% Post-Consumer Content Recycled Plastic Packaging will Continue

 ’80s – ’90s – Paperboard Pkg. “100% Recycled Content - Min. 35% Post-Consumer Content”  Non-Food Contact due to FDA Concerns  Late ‘90s – ’08 – Increasing interest in “Bio-Plastics,” eg., PLA – sometimes touted as “biodegradable”

 ‘05 – Wal-Mart initiates its “Packaging Scorecard”  ‘06 – ’09 – Increasing Questions on Performance, Cost, and Sustainability of Bio-Plastics and degree of biodegradability / compostability  ‘08 – “Wal-Mart will become more aggressive in the near future: Material Reduction & Recycled Content”  ‘08 – ’09 – Increasing demands by Major Retailers with “Truth in Environmental Labeling” mandates  ‘09 – Wal-Mart initiates its Sustainable Product Index  Greener Package initiates its “Anti-Greenwash” Guidelines

 Pentel introduces Recycled “Handy-line S” Highlighters

 More Sustainable versus Virgin or Bio-Plastics  Equal or better Physical Characteristics and Performance  Availability and Competitive Cost of FDA Food Contact Pellets and Flake … esp. PCR PET  Claims can be readily Substantiated … and meet “Truth in Labeling” Mandates  Supported by CPG Companies and Major Retailers

Sheet Extruders’ Imperatives Sheet Extruders’ Imperatives  Want Proprietary Manufacturing Processes and Equipment  Capability to run Flake … not Pellets … may be necessary for High Quality and Consistency of RPET  Need Multiple sources of Pellet / Flake, esp. FDA food grade RPET  May need to move in stages from 35% to 100% Post- Consumer Content  Due to new or less efficient processes … or increased demand … may need to significantly increase Production Capacity

Thermoformers’ Imperatives Thermoformers’ Imperatives  Want Proprietary Manufacturing Processes and / or Package Styles  Need to offer Cost Competitive, Sustainable Packages  May need to move in stages from 35% to 100% Post- Consumer Content

Thermoformers

End Users’ Imperatives End Users’ Imperatives  Want Unique Products and /or Packaging vs. Competition  No Increase in Cost, but … No Sacrifice in Production Efficiency or Performance  Driven mostly by Major Retailer Demands … esp. WalMart * Cost has been #1, #2, and #3 * Environmental Issues beginning to be seriously considered  On-Package Environmental Claims must be believable to Consumers … and be readily Substantiated

End Users

Earthbound Farm  America’s largest grower of Organic Produce  July, ’09 - announced that all their clamshell fresh cut salad pkgs. are being made from 100% post- consumer Recycled PET  RPET is being supplied by Packaging Plus

Earthbound Farm Based on 2008 Annual Usage, use of 100% RPET:  Will conserve 424,000 million BTUs  Will conserve 68,307 gallons of water  Will eliminate 16,191 tons of CO2  Will divert 1.3 million lbs. of Solid Waste from landfills

Sustainable Packaging Coalition (SPC) Sustainable Packaging Coalition (SPC) “ Earthbound Farm’s PCR PET initiative is a perfect example of how to get the ball rolling in the right direction.” “We hope to see more companies that make that commitment, creating a market for these materials …” Anne Johnson, Director SPC

Subway Subway Changing Plastic Salad Bowls:  Redesigned to reduce use of plastic  Switched from OPS to 10% PCR PET  Will reduce plastic material use by 712,00 lbs. annually  Will eliminate 19,500 corrugate cases annually  Will reduce carbon footprint by 21% or 84.8 kgm of Carbon Dioxide Equivalent (CO 2 e)

PWP Industries PWP Industries Major supplier of FDA Food Grade RPET  Supplier of the 10% PCR PET for Subway  June, ‘09 - opened 40 million lb. annual capacity PET Recycling facility in West Virginia at cost of $20M  Second 40 million lb. facility scheduled to open Q2/10 in California  Every 40 million lbs. of RPET represents elimination of 30,000 tons of CO2 and 398 million kilowatt hours … annually

Integrated Packaging Films ECO-THERM tm 100% Post- Consumer Recycled PET sheet Made with FDA food contact RPET resin

Preserve  Preserve toothbrushes made from 100% Post-Consumer Recycled Polypropylene (PP) - Yogurt Cups  Packaging Clamshell made by Innovative Packaging from ECO-THERM tm 100% Post-Consumer Recycled Content PET  Preserve’s Claim: “Plastic packaging made from 100% post- consumer plastic bottles”

Schering-Plough, Corp.  OTC offerings include Claritin allergy pills, Afrin nasal sprays, Dr. Scholl’s foot care products, and the sun care line Coppertone  Products marketed in some 140 Countries  Company has agreed to be acquired by Merck

Schering-Plough, Corp. New Package Requirements:  Must work in “Club Store” setting  Sustainable material  Does not require the purchase of Sealing Equipment

XO Athletic Company  Over 20 Years experience in the Sports Medicine market  Supplying over 80% of the US athletic cup market  Invented the “flexible cup” in 2000 – hard cup covered in soft rubber

XO Athletic Company New Package Requirements:  New, smoother design that is more in line with product  Clamshell  Does not require the purchase of RF sealing equipment and can be packaged “in house”  More Sustainable material

XO Athletic Company Packaging Development: June 2009: First Choice met with CardPak and LucDesigns Engineering, LLC. to discuss XO Athletics’ concepts

XO Athletic Company Packaging Development  End of July 2009: Presented full display planogram to major retailer  Sept 2009: Moving forward on production order for Fall 2009 introduction

NEW PACKAGING FOR 2010 XO PROCUP Current New XO PROCS2 CurrentNew

ScarGuard Labs, LLC, Inc.  A Pharmaceutical Company guided by Doctors, Pharmacists, and Pharmaceutical Biochemists with decades of combined experience  Manufactured in three locations across the U.S.  ScarGuard MD and ScarLight MD available at Doctors’ offices and Retail Outlets (CVS, Walgreens, etc.)

ScarGuard Labs, LLC, Inc. New Package Requirements:  Eliminate material splitting  More Sustainable material  Improve product fit  Lower Costs

ScarGuard Labs, LLC, Inc.

Retailers’ Imperatives Retailers’ Imperatives  Desire to provide Value to Consumers leads to constant pressure on Consumer Products Companies for lower and lower prices  Pressure from Environmental groups for major Retailers to act as quasi- governmental bodies by setting Sustainability standards  Opportunity to work with Recyclers on Closed Loop Recycling Programs to increase Post-Consumer Content

Retailers CharacteristicPVCPLAPETRPET Environmental NoNoNoYes Claims can be Substantiated Cost EffectiveMostNoYesYes Can SurviveYesNoYesYes Distribution

Recyclers’ Imperatives Recyclers’ Imperatives  Need to have a Critical Mass of packages in a recognized Recycling group to make it profitable to separate  Need to have a minimal number of packages in the Waste Stream that contaminate the Recycling System, eg., PVC or PLA  Opportunity to test PET, PP and PS Recycling Programs with companies like A Greener Solution or NextLife

Recyclers

 Continued Improvement in Physical Characteristics and Performance  Continued Availability of PCR Resins … esp. FDA Food Contact RPET … Large potential Source: 166 Plastic Bottles per year … but only 20% are presently recycled  Claims can be readily Substantiated … and meet “Truth in Labeling” Mandates  Potential for Increased Government Legislation

 Consumers recognize that Recycled Content Packages have positive environmental impact  Continued comfort with “Post-Consumer Recycled Content” Claims … even on Food Packaging  Continued Support by Major Retailers and CPG Companies  Opportunities for PP and PS Recycling … with companies like A Greener Solution or NextLife  Continued Competitive Cost

 Jim Scott, Principal JES Packaging (401)