Digital Watermark Recycling Gets a Powerful Real-World Test

Digital watermark recycling is moving into a significant real-world trial involving snack wrappers and other flexible food packaging collected through Belgium’s household recycling system.

Mondelēz International, PepsiCo and pladis are participating in the HolyGrail 2030 project with Fost Plus, AIM – European Brands Association, CEFLEX and companies from across the packaging and recycling chain.

The aim is to determine whether almost invisible codes printed across packaging can help sorting equipment separate food-contact flexible polypropylene, or PP, from other plastic films more accurately.

The experiment could help address a persistent weakness in flexible packaging recycling. However, it should be understood as an evidence-gathering project—not proof that digitally marked wrappers can already be recycled into food-safe packaging at commercial scale.

Key facts about the trial

• Project: HolyGrail 2030 – PP Flexible Belgium

• Location: Packaging is placed on the Belgian market and collected through Belgium’s household PMD system

• Materials: Flexible polypropylene food packaging, including snack wrappers and plastic films

• Technology: Digimarc digital watermarks detected by specialist camera equipment

• Sorting site: Hündgen Entsorgung in Swisttal, Germany

• Participants include: Mondelēz International, PepsiCo, pladis, Ferrero, Fost Plus, AIM, Digimarc and Pellenc ST

• Recycling tests: Planned for the fourth quarter of 2026

• Food-safety assessment: Planned for the first quarter of 2027

• Final HolyGrail 2030 report: Expected in 2027  Digital watermark recycling

Why flexible food packaging is difficult to recycle

Flexible packaging performs several useful functions. It protects food, extends shelf life and uses relatively little material compared with some rigid packaging formats.

Its end-of-life treatment is much more complicated.

Used wrappers can be folded, torn, contaminated or mixed with visually similar films that previously contained non-food products. Existing sorting systems may identify the general type of plastic without reliably determining its former use.

That distinction matters when recyclers want to produce material suitable for contact with food. A recycling stream intended for food-contact applications requires careful control of its input materials, effective decontamination and compliance with European safety requirements.  Digital watermark recycling

Better sorting could provide a cleaner and more consistent stream. It cannot, by itself, establish that the recycled material is safe for food packaging.

How digital watermark recycling works

A digital watermark is a machine-readable code integrated into the printed design of a package. It is designed to be imperceptible to shoppers but detectable by cameras installed on a sorting line.

The code can carry information about the package, including its material and whether it was used for a food product.

Because the watermark is repeated over a large part of the packaging surface, the system may still detect it when a wrapper is crumpled or partly damaged. That feature is particularly relevant for flexible packaging, which rarely remains flat after use.

At the sorting facility, cameras scan packaging moving along the conveyor. When a recognised watermark is detected, the corresponding item can be directed into a more specific material stream.

The trial is examining whether that process remains accurate under everyday conditions rather than only in a controlled laboratory.

From Belgian households to a specialist sorting line

Participating brands place marked flexible PP packaging on the Belgian market through normal retail channels. Consumers use and discard the packages, which are then collected through Belgium’s PMD recycling system.

Film bales from Belgium are transported to Hündgen Entsorgung’s facility in Germany. There, high-resolution sorting equipment supplied by Pellenc ST reads the watermarks and attempts to separate eligible food packaging from other flexible plastics.

Fost Plus describes Belgium as the first European country to conduct a large-scale test of this kind with flexible packaging that has been sold, used and collected under real-world conditions.

That national collection scope is important. Commercial adoption would require the technology to work with dirty, damaged and inconsistently positioned packages—not only perfect samples.  Digital watermark recycling

Why the EU’s packaging rules matter

The project is also linked to the European Union’s Packaging and Packaging Waste Regulation, or PPWR.

Regulation (EU) 2025/40 generally began applying on August 12, 2026. It is intended to reduce packaging waste, make packaging more recyclable and increase the safe use of recycled plastic.

The regulation establishes minimum recycled-content targets for different packaging categories. Its 2030 framework includes a 10% target for certain contact-sensitive plastic packaging made mainly from materials other than PET, subject to the regulation’s detailed timing, calculation and exemption provisions.

Flexible PP food packaging is therefore an important test case. Producers will need dependable supplies of suitable recycled material if they are to meet future requirements without compromising food safety or packaging performance.

What the trial has not proved yet

Digital watermarks may improve identification, but several questions remain open.

Researchers still need to measure detection and sorting performance, including what happens when packaging is dirty or severely damaged. The separated plastic must then be processed using suitable recycling and decontamination methods.

Recyclates and newly produced films will also need to be assessed against applicable European food-contact safety requirements. Economic viability is another consideration because watermark licensing, sorting equipment, transport and recycling all add costs.

For those reasons, it would be premature to describe the technology as a complete solution or to call the recovered material food-grade before the required testing and approvals have been completed.  Digital watermark recycling

What happens next

According to the project schedule published by Fost Plus, recycling trials are planned for the fourth quarter of 2026. Production trials using films made from the resulting recyclates are expected between December 2026 and January 2027.

Food-safety evaluation is scheduled for the first quarter of 2027. The final HolyGrail 2030 report is expected later that year and should cover sorting efficiency, recyclate quality and economic viability.

Those findings will help determine whether the system can move from a market demonstration toward broader implementation.  Digital watermark recycling

The wider significance

The strongest feature of the Belgian trial is its attempt to test the entire process: commercial packaging, household collection, industrial sorting, recycling, film production and safety evaluation.

If the results are positive, digital watermark recycling could help produce more precisely defined recycling streams and support higher-value uses for flexible PP.

If the system struggles with detection, contamination, cost or food-contact requirements, the project should still provide useful evidence about where investment and technical development are needed.

Either outcome would be more valuable than treating digital watermarks as a proven answer before the full results are available.

Frequently asked questions

What is digital watermark recycling?

It is a sorting approach in which machine-readable codes printed across packaging help industrial equipment identify material and product-use characteristics. The watermark supports sorting; it does not perform the recycling itself.  Digital watermark recycling

Which companies are involved in the Belgian trial?

Participants include Mondelēz International, PepsiCo, pladis and Ferrero, alongside Fost Plus, AIM, Digimarc, Pellenc ST, Hündgen Entsorgung and other packaging and recycling partners.

Can digitally marked snack wrappers already become new food packaging?

Not yet as a demonstrated result of this trial. Recycling, film-production and food-safety assessments remain part of the project’s planned work.

When will the results be available?

Initial findings are expected during the second half of 2026, while the complete HolyGrail 2030 report is scheduled for 2027.

Will digital watermarks solve flexible packaging recycling?

They may improve identification and sorting, but they are only one part of the process. Collection quality, recycling technology, decontamination, safety compliance, infrastructure and cost will also determine whether the system can operate at scale.

Flexible Packaging Recycling: Mechanical Recycling Moves Toward Higher-Quality Recyclate

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