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The New Economics of Product Packaging

Renewed interest in a corn-based alternative.

 

One little-known legacy of Hurricane Katrina is a change in the way companies package products ranging from software to soda. In the weeks following the storm, three petroleum-based resins that are used to make plastic rose in price by 20 to 30 percent.

Seizing the opportunity, environmentalists redoubled their efforts to get companies to switch from petrochemical materials to green packaging. They won a big victory in December when Microsoft announced plans to drop polyvinyl chloride packaging, which encases its software disks, this year.

Earlier in the year, Wal-Mart also pledged to drop PVC and to package its private-label products with alternative materials like PLA, a plastic that is produced from corn. Sales of PLA increased 200 percent last year, according to one major manufacturer, with much of the growth coming in the fourth quarter after the hurricane hit. Prior to the storm, PVC resins cost about 55 cents per pound. After Katrina, the price jumped to as much as 80 cents, which made PLA, which starts at 65 cents, newly competitive.

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