Can Paper Packaging Help Reduce the Spirit Industry’s Carbon Footprint?

The eco-friendly alternative to glass is finally catching on in the United States

January 15, 2025 11:55 am EST
5 bottles of Johnnie Walker black label in paper bottles
Even Johnnie Walker has jumped on the paper bottle train.
Nick Mailer / Diageo

The familiar clink of glass bottles in your liquor store shopping cart could be replaced by the soft burr of paper against paper. Taking their lead from the wine industry’s successful rebrand of paper packaging — from cheap house blends to chic upscale brands like Juliet and Boxt — spirits producers around the world are breaking with tradition as recycled paper bottles enter the market.

Although glass is 100% recyclable, just 33% of glass containers are recycled annually in the United States, according to the Glass Recycling Foundation’s 2023 report. This leaves a staggering 9.2 million tons of glass in the landfill. With 61 million spirits bottles shipped domestically in the first three quarters of 2022, this is an industry-wide issue whose impact is becoming increasingly significant to producers and consumers looking for sustainable packaging solutions. 

Instead of waiting for recycling schemes to improve, Florida’s Distillery 98 is revolutionizing the U.S. market as the first American distillery to use paper packaging. While paper-packaged spirits have been on the rise in Europe for several years now, the trend is finally heading to the United States; UK-based industry leader Frugalpac released their trademarked Frugal Bottles here and made the first U.S. sale of their bespoke Frugal Bottle Assembly Machine to California’s Monterey Wine Company (who packages Distillery 98’s Half Shell Vodka).

Half Shell Vodka
Half Shell Vodka is housed in a Frugalpac paper bottle.
Distillery 98

Frugalpac began with a mission to replace non-recyclable, plastic-lined coffee cups, developing their Frugal Cup with its separable paper and plastic layers after discovering the UK was sending four billion coffee cups a year to landfill. The tech worked, and Frugalpac CEO Malcolm Waugh realized it could be employed to bottle alcoholic beverages. 

“For decades, packaging materials like plastic and glass have dominated the beverage industry,” Waugh says. “Yes, they’re cheap to mass produce, but both these materials come with huge environmental costs. Glass is heavy, energy-intensive to produce and often non-recyclable in many areas. That led to us designing the Frugal Bottle, the world’s first paper bottle for wines and spirits.”

Like the Frugal Cup, the Frugal bottle is 94% recyclable — made from recycled cardboard and food-grade plastic — and uses six times less carbon than traditional glass bottles and up to 77% less plastic than a standard plastic bottle. These impressive stats jumped out to Distillery 98 co-founder Harrison Holditch, who found himself looking for an alternative to glass packaging for his vodka during the pandemic. 

Based in Florida’s idyllic Santa Rosa Beach, Distillery 98 began operation with a strong environmental ethos, taking inspiration from their location, where fresh water and salt water meet and abundant Gulf Coast oysters naturally filter out water pollutants. Holditch and his brother-in-law and cofounder David Kapitanoff distill Half Shell in a bespoke closed-loop system that uses locally-sourced oyster shells and coconut carbon to filter the vodka to a high level of purity while keeping the distillery’s carbon footprint low. Holditch was keen to find packaging that fit with the brand’s ethos, and after much online searching, Frugal finally fit the bill.

“When I found Frugal and held a bottle for the first time, I thought ‘oh my gosh, this is exactly what I imagined,’” Holditch says. “I really loved that it looks and pours like a bottle so we’re not having to reteach people how to use the product.” 

Ethos, mission and vision were also crucial connections between Distillery 98 and Frugal. “I fell in love with what Frugal was doing,” Holditch adds. “Their mission and goals aligned with ours — making a new product to help change industry and reduce carbon.”

Having secured distribution in Whole Foods in California and Colorado and Total Wine in select Florida locations — as well as shipping to 41 states via their website — Distillery 98 is proving there’s consumer demand for paper packaged spirits in the United States. And by acting as industry leaders, they could help inspire substantive change. “Working with our retail partners has been an incredible experience,” Holditch says. “Their support has helped us introduce Half Shell Vodka to more people who share our passion for quality and sustainability.”

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Distillery 98 and Frugal are taking the lead stateside, but outside the United States, big names including Absolut Vodka and Johnnie Walker have recently tried paper packaging in test markets to gauge its potential for wider rollout. 

Johnnie Walker, owned by Diageo, chose their flagship UK location in Edinburgh, Scotland’s, Princes Street as their test site. They wanted to see how the bottles work in a busy bar environment and how bartenders interact and pour from them. It also gave customers the opportunity to interact with them. Working with Swedish dry mold fiber company PulPac and PA packaging consultancy, Diageo replicated the iconic square design of Johnnie Walker Black Label in paper — building on their previous trial of Baileys Irish Cream Liqueur in paper packaging — to hone and fine-tune what bartenders and customers want from a paper-packaged spirit. 

“At Diageo, we’re exploring different ways to reduce our packaging carbon footprint to help make our business more resilient and efficient, such as lightweighting our glass bottles, increasing the recycled content and exploring alternative packaging materials, like paper,” says Dave Lutkenhaus, Diageo’s global sustainability and innovation director. “The paper-based bottle trial for Johnnie Walker Black Label marks a step forward in this journey.” 

Like Danish company Paboco who produced Absolut’s paper-packaged bottles, PulPac uses a different model from Frugal’s trademarked tech. But there are still significant environmental gains to be made with the Johnnie Walker prototype, which shows up to 47% potential reduction in carbon emissions compared to its glass equivalent. Other advantages paper packaging offers is a huge reduction in bottle weight and 360-degree branding, making bottles stand out on the shelf without the cost and environmental impact of glued labels. 

For Distillery 98, the savings from using Frugal are being passed on directly to consumers. “[Paper packaging] enables consumers to make a conscious green choice without having to pay extra, which is very important to us,” Holditch says. “We want to offer a sustainable green product without alienating the everyday consumer.”

Frugalpac bottles line the shelves at ProWein, a wine and spirits trade show
Frugalpac bottles line the shelves at ProWein, a wine and spirits trade show.
ProWein

Meeting consumer demand has been key in the growth of paper-packaged spirits across the board. “Consumers, especially younger generations, are becoming more discerning about the environmental impact of the products they buy, “ Waugh says. “They expect brands to make real, measurable efforts to reduce their carbon footprints. The paperisation of packaging is an essential part of meeting these demands and aligning with the values of Gen X, Millennials and Gen Z consumers.” 

With Frugal securing contracts with Target and 7-Eleven in addition to Whole Foods, U.S. demand appears to be catching up with the rest of the world; Frugal’s contracts reach beyond Europe to markets including India, South Africa and Australia. 

This is a priority for Diageo too. “With all our innovations and products, we need to stay close to the consumer as their demands and desires evolve so we can develop the products they want,” Lutkenhaus says. 

Recent research by McKinsey shows that 48% of Millennials and 49% of Gen Zs are willing to pay more for environmentally-friendly products, placing a premium on low carbon footprint and recyclable or minimized packaging. With spirits currently the fastest-growing segment of the alcohol industry — holding a 42% market share, which has increased year-over-year since 2000 — finding new ways to reduce environmental impact, appeal to younger audiences and make their brand stand out will become of increasing importance to producers. At Half Shell, Holditch emphasizes how Distillery 98’s paper packaging sets them apart from other brands but also gives them the opportunity to lead from the front. 

“[Our packaging] proves we are truly focused on sustainability — we’re not just talking the talk but walking it too,” Holditch says, describing positive feedback they’ve received from customers, retailers and industry peers. While citing that glass and plastic will always have a role in spirits packaging, Holditch is keen to be an industry leader and champion change. “At the end of the day, we truly believe in the product and that it can revolutionize the industry.” 

Waugh agrees. “The paper bottle revolution is well underway,” he says. While it’s still early days, the potential for paper-packaged spirits is significant. If you build it, they will come.

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