Tetra Pak
Tetra Pak is a Swedish multinational food packaging and processing company headquartered in Switzerland. The company offers packaging, filling machines and processing for dairy, beverages, cheese, ice cream and prepared food, including distribution tools like accumulators, cap applicators, conveyors, crate packers, film wrappers, line controllers and straw applicators.
Tetra Pak was founded by Ruben Rausing and built on Erik Wallenberg's innovation, a tetrahedron-shaped plastic-coated paper carton, from which the company name was derived. In the 1960s and 1970s, the development of the Tetra Brik package and the aseptic packaging technology made supply possible without the need for a cold chain, substantially facilitating distribution and storage. From the beginning of the 1950s to the mid-1990s, the company was headed by Rausing's two sons, Hans and Gad, who took the company from a family business with six employees in 1954 to a multinational corporation, operating in more than 160 countries and with over 25,000 employees as of 2021.
The company is privately owned by the family of Gad Rausing through the Swiss-based holding company Tetra Laval, which also includes the dairy farming equipment producer DeLaval and the PET bottle manufacturer Sidel.
History
Åkerlund & Rausing
In 1929, Ruben Rausing and Erik Åkerlund established a food carton company in Malmö. Rausing, who had studied in New York at the beginning of the 1920s, had seen self-service grocery stores in the United States, unheard of in Europe at the time, and realised that pre-packaging was part of the future in food retailing as a more hygienic and practical way of distributing staple groceries. At the time, these were sold over the counter in cumbersome glass bottles or impractical paper wraps in most European countries. At the end of the 1920s, Rausing bought a run-down packaging factory in Malmö together with the industrialist Erik Åkerlund. Åkerlund & Rausing was the first packaging company in Scandinavia and eventually became a leading manufacturer of dry food cartons, producing various paper packaging for dry staple groceries.Formation
By the early 1940s, Rausing began developing dairy packaging that could compete with loose milk. Erik Wallenberg, an assistant in the Åkerlund & Rausing lab, came up with the idea to construct a tetrahedron-shaped package out of a tube of paper in 1944. On 27 March 1944, Rausing filed a patent for the idea. Rausing's wife Elisabeth reportedly came up with the idea of continuously sealing the packages through the milk while filling the tube in the manner of stuffing sausages. In 1946, the company introduced the first prototype tetrahedron-package filling machine.Operating history
AB Tetra Pak was established in Lund, Sweden, in 1951 as a subsidiary to Åkerlund & Rausing. In May of that year, the new packaging system was presented to the press, and in 1952, the first filling machine producing 100 ml cream tetrahedrons was delivered to Lundaortens Mejeriförening, a local dairy. In subsequent years, tetrahedron packages became more and more common in Swedish grocery stores, and in 1954, the first machine producing 500 ml milk packages was sold to a Stockholm dairy. That same year, the first machine was exported to Hamburg, Germany, soon to be followed by France, Italy, Switzerland, and later the Soviet Union and Japan.Rausing strove to improve the Tetra Classic system, beset with many technical problems during the 1950s, and spent enormous amounts on development. The different projects – the tetrahedron, the aseptic packaging technology, Tetra Brik – all demanded large resources, and the company had financial troubles well into the 1960s. Tetra Pak's commercial breakthrough did not arrive until the mid-1960s with the new Tetra Brik package, introduced in 1963, and the development of the aseptic technology. To liberate capital, Åkerlund & Rausing was sold in 1965 while AB Tetra Pak was retained.
International expansion had begun in the 1960s, when the first production plant outside of Sweden was established in Mexico in 1960, soon to be followed by another in the United States in 1962. In 1964, the first Tetra Classic Aseptic machine outside of Europe was installed in Lebanon. The late-1960s and 1970s saw a global expansion of the company, mainly due to the new Tetra Brik Aseptic package, launched in 1969, which opened up new markets in the developing world and sparked an explosion in sales.
Mergers and acquisitions
In 1981, Tetra Pak relocated its corporate headquarters to Lausanne, Switzerland, for tax reasons, but retained all research in Lund, Sweden. For the equivalent of US$2.5 billion, Tetra Pak acquired Alfa-Laval AB in 1991, a Swedish company producing industrial and agricultural equipment and milk separators, world-leading in its industry, in what was at the time Sweden's largest takeover. Since the deal allowed Tetra Pak to integrate Alfa Laval processing know-how, the merger made it possible for Tetra Pak to offer packaging and processing solutions. The deal drew anti-competitive scrutiny from the European Commission, but it was approved after various concessions from both companies. After the merger with Alfa Laval, Tetra Pak announced plans to return its headquarters to Sweden, and in 1993 Tetra Laval Group was created with dual headquarters in Lund and Lausanne. Alfa Laval's liquid processing unit was absorbed into Tetra Pak and the unit specialising in dairy production machinery was organised separately as Alfa Laval Agri. Alfa Laval Agri was later renamed DeLaval, after Alfa Laval's founder Gustaf de Laval, and is still a part of the Tetra Laval group. The part of Alfa Laval that was not directly linked to Tetra Pak's activities – heat exchangers and separation equipment among others – was sold in 2000 to Swedish finance group Industri Kapital. In 2001, Tetra Laval acquired the French plastic packaging group Sidel. The merger was prohibited by the European Commission on the grounds that both Tetra Pak and Sidel were market leaders in their fields and operated in related business areas. The European Court of Justice eventually ruled in favour for Tetra Laval in a high-profile case. The Tetra Laval Group is controlled by the holding company Tetra Laval International, whose board of directors include the three children of Gad Rausing. In 2014, Tetra Pak acquired Miteco, a provider of production solutions for soft drinks, fruit juices and liquid food, which employs 70 people across sites in Switzerland, Italy, the UK and South America.Operations
Business and markets
As of January 2021, Tetra Pak was operating in over 160 countries through its 29 market companies. Between 2007 and 2010, the company saw growth in emerging markets and opened new plants to meet that demand. Tetra Pak invested €100 million to build a plant in Russia in 2007, and built a €60 million plant in China the following year. In 2009, the company announced that it would invest more than €200 million to build plants in India and Pakistan to serve emerging markets in Asia and the Middle East, where milk consumption was rising, especially of ultra-high-temperature processed milk. At the time, two-thirds of Tetra Pak's global sales came from dairy packaging.In 2010, Tetra Pak reported a 5.2 percent increase in sales, with an annual turnover of approximately €10 billion. Growth in Asian, Eastern European, and South American markets helped drive the increase. The company opened a €120 million aseptic packaging plant in Vietnam in 2019 to supply countries in the Association of Southeast Asian Nations, Australia, and New Zealand. According to the company, it had total sales of €11.5 billion in 2019. Tetra Pak's most popular product is the Tetra Brik Aseptic, a best-seller since the 1970s.
Competition
In an interview in Swedish business monthly Affärsvärlden in 2006, then Tetra Pak CEO Dennis Jönsson stated that Tetra Pak's main competitor was Swiss manufacturer SIG Combibloc, adding that Tetra Pak's main competition generally no longer comes from companies producing similar packaging but from industries and companies producing other types of packaging with a lower cost of production, like the PET bottle. Jönsson perceived the PET bottle as Tetra Pak's biggest threat in the European market at the time. The Norwegian company Elopak/Pure-Pak produces similar style carton packages and has historically been Tetra Pak's principal competitor. The Chinese packaging company Greatview has begun challenging Tetra Pak, both in the Chinese market and in Europe.Products
Aseptic technology
Tetra Pak uses aseptic packaging technology. In aseptic processing, the product and the package are sterilized separately and then combined and sealed in a sterile atmosphere, in contrast to canning, where product and package are first combined and then sterilized. When filled with ultra-heat treated foodstuffs, the aseptic packages can be preserved without being chilled for up to one year, with the result that distribution and storage costs, as well as environmental impact, is greatly reduced and product shelf life expanded.The aseptic packaging technology has been called the most important food packaging innovation of the 20th century by the Institute of Food Technologists.
Packages
- Tetra Classic is the name of the first, tetrahedral package, launched by Tetra Pak in 1952, with an aseptic version released in 1961 and still in use, mainly for portion-sized cream packages and children's juices.
- The Tetra Brik, a package in the shape of a rectangular cuboid, was launched in 1963 after a long and costly development process. An aseptic version, Tetra Brik Aseptic was launched in 1969. In terms of entities sold, it is the most popular of the Tetra Pak packages.
- The pillow-shaped Tetra Fino Aseptic was introduced in 1997, aiming to provide low cost and simplicity.
- Tetra Gemina Aseptic was introduced in 2007 as the "world’s first roll-fed gable top package with full aseptic performance".
- The Tetra Prisma Aseptic was launched in 1996. It has an octagonal shape with the aim of providing a more ergonomic experience.
- The Tetra Rex is a cuboid shaped package with a gable-top. It was launched in Sweden in 1966.
- Tetra Recart was launched in 2003 and is a package shaped as a rectangular cuboid that is meant to provide an alternative to previously canned foodstuffs such as vegetables, fruit and pet food.
- Tetra Top was launched in 1986 as a re-closable, rounded cuboid package with a plastic upper part, including opening and closure elements. The lid, molded in polyethylene in a single mold, makes it easy to open and reclose.
- Tetra Wedge Aseptic was developed to keep packaging material to a minimum while retaining a square surface underneath. It was introduced in 1997.
- The Tetra Evero Aseptic is the latest of the Tetra Pak packages, launched in 2011 and marketed as the world's first aseptic carton bottle for ambient milk.