The Future of Bottles Is Paper with Malcolm Waugh

In this episode, Cory Connors welcomes Malcolm Waugh, CEO of Frugalpac, to explore the innovation behind the Frugal Bottle — a paper‑based alternative to traditional glass packaging. Malcolm walks through his engineering‑rooted career, his years at Tetra Pak, and how he ultimately joined Frugalpac to help lead a packaging revolution. He explains how the paper bottle dramatically reduces carbon emissions, why it maintains a familiar consumer experience, and how global markets are rapidly adopting the technology. The discussion also highlights upcoming innovations, including custom bottle shapes, edible‑oil packaging, and a new paper‑based paint pot.

Key Topics Discussed:

• Malcolm’s background in engineering, food manufacturing, and nearly two decades at Tetra Pak
• The origins of Frugalpac and contributions of its young, innovative team, including Product Director John Paul Grogan
• Overview of the Frugal Bottle: 84% recycled paper shell, 16% polyethylene liner, and a 6× lower carbon footprint than glass
• Environmental costs of glass manufacturing and transportation in the wine industry
• Replicating consumer expectations: bottle shape, screw cap, and premium look and feel
• How Frugalpac’s business model works: early UK manufacturing, followed by customer‑owned assembly machines and royalties
• Market adoption trends: strong uptake in the US, Canada, Scandinavia, and among younger consumers
• Retail expansion, including nationwide placement in Target stores
• Event success stories, Coldplay concerts where 8,000 Frugal Bottles outperformed traditional wine service
• The role of Extended Producer Responsibility (EPR) in accelerating demand by increasing the true cost of glass packaging
• Future innovations: new machine platforms, lighter materials, custom shapes, olive‑oil applications, and the “Frugal Pot”

Resources Mentioned:
Frugalpac website
Frugal Bottle rollouts in major retailers, including Target
Coldplay sustainability initiatives that showcased the Frugal Bottle at concerts

Contact:

To learn more about the Frugal Bottle, Frugalpac’s machine platforms, or partnership opportunities, listeners can reach the team at hello@frugalpac.com or connect with Malcolm Waugh and Frugalpac on LinkedIn.


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Transcript

0:07

Welcome to Sustainable Packaging. I am so excited to have the CEO of Frugal Pack, Mr. Malcolm Waugh Welcome, sir. Thank you for being on. We really appreciate it. Thank you Cory and great to be with you and thank you to all your listeners. means a lot to me. What you've got going here is a really innovative product, something that's as far as I know, never been done before. We're talking today about paper bottles. Frugal Pack has invented this technology to my understanding, and it's selling like crazy. before we get into all that business, let's talk about your background and You've been with Tetra Pak and Frugal Pak and all of these companies that are very paper focused. Is that something that you're passionate about? Obviously tell us how you got into this industry. So as a young man, engineering was more of my thing, but I basically found a career with a company called Outful of Owl, which is a big food processing business. So engineering solutions for food manufacture that was then bought by Tetra Pak. And that introduced me to the world of paper packaging, sustainability, and how a company can go about actually making changes. So I was with Tetra Pak for a good 18 odd years and then I moved to another PLC business in the UK. So a listed company where I worked with them to build up their own packaging portfolio, which again was all fiber based. It was more in the pharmaceutical space. And I was with them for about 11 years and then came out of that. and was looking for something else to do. And I came across a very young company called Frugal Pack, which was a startup business. And I'd been around the mill a few times in terms of experience. And I thought, actually, this could be something that is not only important, but could be fun to do as well. And both are true. So I'm very pleased with where I've ended up. getting older now, though. Getting on a bit. Well, you've, your, your wisdom is showing through. We appreciate what you're doing. This is a very innovative and exciting material and product and design. think it's a revolutionizing the packaging industry for spirits and wine and other things. let's talk about frugal pack. I've got one of your bottles here. This is a vodka, bottle and, uh, it's really beautifully made, beautifully done. And there's a logo here that says press here to recycle. So we'll talk about all of these details, but I want to kind of give the audience a sneak peek. Who invented frugal pack and where did it start? Yeah, so Frugal Pack is a young clean tech business based in the UK, a town called Ipswich, which is about an hour northeast of London. It is a group of very young, enthusiastic people who have all put a hand into some of the developments that have happened over the years, most notably our product director, John Paul Grogan. I like to call him the brains of the operation. It's not me, it's him, I think, is where all the applause should be going. But what we do, we look for problems caused by the incumbent packaging in fast moving consumer goods. And then we try to offer an alternative and we always look and this is from a sustainable perspective. So our materials of choice are recycled paper and the reason we choose that is it's abundant. It's the most recycled material in the world today. Wherever you go, paper is the most recycled. It's got a cost profile that that generally works. Paper is probably still a little bit more expensive than plastic but that's changing over time and it's very adaptable to what we want to do. Once we've spotted an issue, we then engineer, and that's the other side of my history, if you like, the solutions. So whether that is a complete machine platform that is making the frugal bottle or a product that we launched in 2018 was the frugal cup, which was easy to recycle coffee cup for on the go. But despite the best business plan, if I may say, written, we hadn't quite counted on a global pandemic. So we had to pause the production of the frugal cup and really turn all our attention to what effectively is our poster child, if you like, which is the frugal bottle. And really what we're trying to address here, what we spotted in the market was how the wine industry particularly was getting affected by climate change. The root cause of climate change is carbon. If you look into the way that the wine industry works figures move around but we use 50 % of the carbon is effectively coming from the packaging the glass bottle roughly 35 % of that number is from the manufacturing so it's very high energy intensity its original source material silica sand which is either mined or dredged out of rivers so that's not great and whilst very recyclable each time you recycle it you're going to generate roughly the same amount of carbon again. So it's a little bit less. And then there's the weight side of it. So when you're distributing it, empty to get filled and then filled to be distributed, it's quite a weight. So that adds significantly to the carbon. So the spot of the Frugal Bottle was an alternative to the wines and spirits industry to offer a low carbon solution. But one of the things that we also wanted to do was replicate the experience for the consumer. So the Frugal Bottle is the exact shape of a bottle. bottle. It acts like a bottle, you have a screw cap, you pour it and then once you finish with it you recycle it. So we're not asking the consumer to change much, whereas if you take my old company Tetra Pak, that has a different connotation in terms of the image of the package. It's probably a little bit more commoditized and for lower value items. Yeah. Great points. And it, it feels, it feels the same. kind of looks the same. mean, glass is known for being beautiful and shiny and having a weight to it. But when I hold this bottle, it feels very similar. And, other than, you know, it's obviously made of paper. so let's talk about kind of the nuts and bolts of it. When I first heard about this company, about your, your company, I thought. that you were going to sell the machine to every company that would use the bottles and that they would form those bottles on site. It sounds like maybe that's not exactly how it works. Can you walk us through the nuts and bolts and just explain it to us? Certainly, mean in the first instance I'll just tell you a little bit about the bottle. So it starts life as flat sheet, die cut printed board and then clearly we're dealing with liquids so we use a mono material pouch. plastic pouches is polyethylene again, well recycled material, not overly well recycled globally, just to put that on the table. UK is quite low, but soft any soft plastic is poorly recycled at the moment. That's changing quite quickly. And so it's moving into the into higher recycling rates. But most importantly, and critically is is the frugal bottle is designed to reduce carbon. So it starts life 84 % recycled content. It's made recycled paper as we say it's 84 % paper by weight and 16 % plastic. That delivers six times less carbon than an average weighted glass bottle which we say is 440 grams and that is effectively six times less so that's equating to somewhere in the region of 450 grams worth of carbon reduced each time you use a frugal bottle. weight it weighs 84 grams as I mentioned. and therefore five times lighter than your average glass bottle, which is significant. I wouldn't say it's bomb proof, but it's a lot better than glass. You can drop this from 1.6 meters and you're not going to see a loss of liquid, which is very important. And another attribute that we're really promoting as much as we can to the industry. The industry is not faring too well at the moment in terms of overall consumption. It's going down and a lot of that is bringing bringing in new users and attracting younger people into the wine category. The spirits category is slightly different, but still suffering a little bit from the overhang or hangover of COVID. But the fact you can decorate this bottle all over. allows you to do many things in terms of the design. The one you have there is one of our first customers actually, an American business, very proud of Half Shell Volca. These guys are based down in Florida. They've really brought their business to life using the frugal bottle. And they're attracting, again, the younger consumer. They're being Floridian based. They're very beach friendly. So that's one of the attributes they like of the bottle, is you can take it to events and to the beach. And it can go where glass can't, really. So that's sort of makeup of the product itself. In terms of the business model, we have a facility in Ipswich that runs the first machine. We always build our first machine platforms, test them and then bring them to market. there's an investment in a frugal bottle assembly machine and therefore anybody investing it wants to make sure that the marketplace is there, that they've got the bottle positioned correctly in the market and that if they do move towards or when they move towards the investment in the machine, they know they've got a ready-made audience. So we see market with bottles from the UK. Once that's happened and that sort of technical testing for filling, distribution testing and then market testing, then the idea is that the customer then buys the frugal bottle assembly machine. The components are then all sourced locally and that allows for a lower cost option for for our customer and ultimately the consumer, but also it adds another layer of sustainability. The pack density of this versus. a form bottle which is full of oxygen, it's frugal pack or glass, doesn't really matter. You're getting roughly 5,000 of these on a pallet and you'll get 1,000 of these. So you're taking four trucks off the road and the equivalent amount of carbon and the associated sort of distribution costs. So that brings the cost down as well as the carbon load to the customer. And it allows for more local manufacturing which starts to bring jobs back into various areas. The glass industry has consolidated considerably over the years. You're in the US, think less than 70 % of glass bottles for wines and spirits are now coming from other countries, predominantly China and India. Clearly Mr. Trump has a view of life there, so that's adding to cost with the tariffs. We've been successful in putting two machines into North America. The first went to Canada. The second one has gone into California. So they're actually very pleased. They're sort of tariff free now because then they're able to make the product in America from American based plastics and paper. who knew? I mean, who knew that would be a side part of it? It's worked well for us. And we sell the machines. We tend to look for a single digit markup. They're not really profit centers for us. But what we do take is a manufacturing license with each machine that goes out and we take a royalty. And in return for that royalty, we are then promoting the customer's products. Any inquiries that we're getting for California, say, we pass through to the customer or to our Canadian customer. And then we're constantly working with our customers to ensure the machine are running and they've got sales because for each bottle they're producing then we get paid. If they don't produce anything we don't earn any money so it works extremely well actually and it gives comfort to our customer base that we're always going to be there. That's excellent. Yeah, that makes perfect sense. What a great idea. It's an excellent concept in California. Sure makes sense being, I think it's the largest producer of wine in America to my knowledge. Certainly, certainly makes a lot of great wine. So let's talk about. some of your, your growth areas that you're expecting. I, I think with extended producer responsibility, you're going to see a growth in, in this product because, glass fees are so high based on weight. So are you, are you expecting that growth because of EPR or do you see other reasons for growth in your product? We see a lot of growth opportunities, not least the market itself, despite my comments that it was declining a little bit. You're still dealing with roughly 33 billion units per year. So the addressable market is huge. If we take the the sort of benefits of the frugal bottle. I've gone through those from a sustainability perspective. From a price perspective, we are working very hard to bring the cost of the bottles down to match that of and be equal to that of the of glass. And we actually see we've always said by 2026, we'll be on par with your average glass bottle with some of the legislative changes that we're seeing. We could even be lower than that. So EPR is driving some of that is clearly adding a cost to to heavyweight glass. And it's also demonstrating that governments are seeing the benefit of encouraging a change to a different packaging form, different packaging formats, which are bringing sustainable opportunities to the marketplace, including frugal bottle is doing that well. And we're being rewarded for that by not being charged to the same degree as the glass bottle. from so that that starts to get that inflection point happening with pricing of glass. Secondly, we're about to launch our new machine platforms, which slightly change the way the bottle is manufactured, which brings the cost of the bottle down. And also the fact that we can use re-engineering some of the materials, which are going even lighter now, but maintaining the strength and therefore that takes some further cost out. So we're getting closer and closer and the machine runs at a far greater rate. So your return on investment, you're into months now if you're looking at... making a bottle versus buying a frugal bottle. So that's allowing us to talk to some of the bigger players. I clearly the big guys, they're not looking for a cost increase without any great return. And whilst we were pretty sure you'd get a good return on it, you've still got to be close. So we're coming into that space. Clearly where we operate against the, shall we say the mid-size companies and the spirits markets and the frugal bottle actually is coming in. very economic versus volume and also different weights. So that deals with one thing that should excite the market. But where we've got to get to next is really working with the retailers to push the product and the consumer to pull the product through. So we see huge growth just from the use of the bottle within the retail environment. The area we're focused in is in major retail wines. So in the US, we this bottle particularly particularly is in Target and they've rolled out that through the whole of the country, I 12,000 stores. And really where we see this bottle really having a benefit and an attraction is in the faster consumed wine. So we say the Frugal bottle was there for wine that's bought on a Friday night and if it makes Saturday morning, it's doing rather well. this is sort of not high, faster consumption, if you like. And we've got some statistics% of the world's wine is actually consumed within 12 months of being bottled. And also 90 % of that 90 % is consumed within 48 hours of being purchased. a glass bottle today is sort of over engineered. protection for the wine because it was there to really allow the wine to develop over a period of time into years and also be stored for longer. That's not a need anymore within the retailer wines if you like. Clearly fine wine and very high-end wines need the glass bottle and it should be there and it should retain for certain products as well but If it's consumption, then why go for something that's a little overused? So that's where we see another benefit of the bottle and where growth will come from. I've mentioned events and beaches and so on. as people become more strict and environments become more strict with the glass, and that gives us a lot of opportunity. did it. And just being able to put the package into an environment. where glass is not allowed is actually increasing the rate of sale of wine. In 2023, were fortunate to support our wine entered the or our customers wine entered the concert event with Coldplay who ran three shows in Manchester in the UK and they sold 8,000 frugal bottles of wine at that event. They would probably be lucky to sell maybe five, six hundred, maybe a thousand glasses of wine, which is what they used to sell in a plastic glass. So the upsell was incredible. Fifty dollars a bottle, but the consumer could enjoy the show and not have to keep going back to the bar to get some wine. They could carry this around, pour it, drink it and enjoy. the whole occasion and we're seeing more and more of those opportunities arising but really the focus is in on major retail. I've been to several concerts in my life and I would certainly appreciate not having to go wait in line over and over again to get another drink. that I can see the appeal there. And I know Coldplay is one of the leaders in the, in the world of entertainment for sustainability. So that makes perfect sense that they would embrace your, your, sustainable packaging alternative. very exciting stuff. This is really cool. I remember when the screw top. option came out for wine and for bottles. there was a little bit of a consumer pushback saying that looks inexpensive we don't like that but now it's really taken off and people just say well it's easier to use and it's nice and it's convenient and like you said I'm going to drink it tonight I bought it this morning and it you know they're not looking for to to age it over 10 years. are you seeing did you see any pushback originally from consumers with your material with the frugal frugal pack bottle or and is that changing at all? BAM! Yes, and yes. So we did see we did a survey survey of the frugal bottle, where we showed a picture of the bottle. And this is before we launched in in 2020. And we asked the consumer, would you buy wine in a paper bottle? And actually, we were very encouraged by the response without going through all the figures. Basically, we got 5 % of people said no, they wouldn't. So we had 95 % of the market to encourage and all that 60 % was very positive towards that others were unsure. and the usual sort of statistics you get back. To your point, much like screw cap and the pace of take up of that, the frugal bottle is still... quite slow in its take up within certain markets. And those tend to be the traditional wine markets of Europe, frankly. And so in Spain, Italy, quite surprised by France, because they're actually adopting the bottle far more than some of the other countries. And Italy, for example, still will not be using screw caps. I mean, they still are wedded to the cork as a consumer, and they see it as something, despite the fact that they know it's better for the wine in any event. But it is changing. But where we're seeing our core markets, the US has embraced it very well. Thank you very much. Canada, clearly, that we spoke of. Scandinavia is a big user. We've got most of our SKUs in Scandinavia now. And then we're slowly but surely... converting the very traditional markets of Europe. But that conversion is actually coming more from younger people adopting the bottle and then taking it to market. UK, the wine industry is growing here. It's a little bit more sparkling wine that the English producers prefer to make. And the frugal bottle is not right for sparkling. It really is only good for still. And then we've got the spirits market, which is really exploding. if we look at the SKUs, 60 % of our SKUs are in spirits. and 40 % of that in volume and then 60 % of the volume is in wine and 40 % in the SKU. So there's a slight difference but we are appealing very much to the spirits industry and the bottle you were holding there demonstrates that. time and time again I was talking to them they just told me they that their sales are going to be 10 times up on sales from where they were last year and that that's just frugal bottle it's there's a fantastic vodka don't get me wrong but but it's appealing to a different audience and therefore they're nicely through through the US market so lots to play for Yes, it's, it's, sounds very exciting. I had their CEO on, on the half shell vodka team. I had them on the podcast a few years ago and, or about maybe about a year ago. And he said that they changed the artwork because people were, weren't sure why there was a shell on it. And they didn't know what it was at first. Most, most people can read and it says vodka on it. So they understand that, but he showed me the new artwork and it looked really, really nice. So although I like what they did the first time too. But I love this idea, what an innovative topic and interesting thing that you've created here. So what's next for Frugal Pack? Just continued growth, exciting adventures, anything that you can tell us about that's other than the new machine. Bye. countries now where 71 SKUs and continuing to grow with the wine products and the spirits products. Sort of unbeknown to us, but one market that we're embracing is olive oil is really beginning to grow. And we're just about to see quite a big launch in Germany with a frugal bottle for edible oils. Tends to be olive oils more than anything else. So we've got a Greek producer, Italian producer now in Germany. And then we're talking to other parts of the world. So that's a sort of extension of the standard bottle. if you like. We've got the capability to do shapes, so we're talking to some very big iconic brands, if you like, in minds and spirits that are very interested in taking a paper variant of their icons. That's challenging, but both parties are embracing it well, and I think we're going to come out with a successful product there. Then from sizes to from shapes, we were working on sizes and machine the machine platforms, as I've mentioned. So in every day and sort of every way, we're trying to make the frugal bottle better and and really get it into the heart of the wine and spirits industry usage. But we're not stopping there. So we have another product, which is a paint pot, which we have developed. The issue with paint pots around the world is disposal. and you tend to be disposing of a large piece of packaging that is rarely recycled because it's contaminated with paint. So most of them get incinerated, not all, but most. So the frugal pot, as it will be known, has a basically the principles are the same. It's a recycled paper out of shell. And then within that, we have a plastic liner. When you finish your painting, you pull the liner out. And if you can imagine now you've got a lot less material so you can put that in your garbage bag. If it's always use the example, you could probably put 50 of these liners into a garbage bag. You couldn't put 50 paint pots in there. And then you have to go off and dispose of that correctly. But you've got it more consolidated. And then your paper waste, which is uncontaminated, goes off into your paper recycling and you're saving a little bit more of the planet through your painting. And also it works very well for commercial painters because they have the same problem in terms of disposal and therefore there's a cost saving there as well for them, hopefully pass through to the consumer in their options. And then beyond that, it's looking at toothpaste tubes and areas where we're trying to find issues. Toothpaste tubes are not overly recycled, who knew, but we learn something every day and we look at other options. But that's sort of a little bit down the way. There's, as I mentioned, my 33 billion total addressable market for wines and spirits bottles that actually keep us going for a while. Looks like you've got your work cut out for you, sir. Well done. This is very, very exciting. I'm excited for you and your team. How do people get in touch with you if they're interested in uh looking at your... we're available 24 hours a day, I like to think you could test that out. So we're on frugalpack.com is our website. There's a hello at Frugal Pack where we're able to contact the great commercial team we have, Paula and Stephen. We're also LinkedIn. So any of the Frugal Pack on LinkedIn or I'm on there personally, if anybody would like to drop me a line. but in any event you'll get us through the website and we're at your disposal to talk about frugal bottles, pots and anything else you may be interested in. Thank you again, sir. This has been really insightful and I can't wait to post this episode. Thank you. well, thank you. Is that, is that.