October 18, 2007
Sustainability Central to Packaging Now and in the Future
By Ronald Margulis, Managing Director, RAM Communications
With packaging solutions ranging from bio-polymers to low-energy consumption components, small footprint machinery and e-machinery, the full array of sustainability-oriented innovation took center stage at PACK EXPO Las Vegas this week.
As retailers institute environmental scorecards and informed consumers make choices based on social responsibility and corporate ethics, the demand for sustainable packaging solutions has become an important concern for business leaders, marketing managers and professionals across the packaging industry. Manufacturers are assessing the challenges and opportunities involved with meeting this growing demand for sustainable products and applying the principles of sustainability throughout their businesses.
“The simple fact is, sustainable can mean many things to many people depending on the focus a company is taking regarding this trend,” noted Charles D. Yuska, president and CEO of PMMI. “PACK EXPO Las Vegas exhibitors are showcasing all of the different solution sets a consumer of industrials goods company may be seeking to address their sustainability initiatives.”
In addition to the exhibitors that displayed their sustainability oriented products and services, MeadWestvaco chairman John A. Luke, Jr., shared his company’s leadership position on sustainability during the Tuesday, October 16 keynote presentation, entitled: “Brand Sustainability, The New Relationship Between Sustainable Packaging and Winning Brands.” MeadWestvaco has a long history of environmental stewardship, including sustainable forest management, active carbon reduction programs, and sustainable packaging design and development.
Several of the presenters at the conference also devoted time to provide input on how sustainability is affecting the development and manufacturing of consumer and industrial goods.
“When discussing sustainability, issues like recycling and recovery come to mind immediately,” said Ben Miyares, vice president, Industry Relations for PMMI. “However, gains can be made at all stages of the packaging lifecycle including raw material choice, energy consumption, manufacturing practices, transportation options and waste reduction. The conference will explore opportunities for packaging providers to look beyond the obvious elements of sustainability and consider the possibilities presented at various stages in the packaging lifecycle.”
Discussion Questions: What impact is the trend toward sustainable operations having on the retail industry? Is there substantive action taking place across retailing and related businesses or are high profile environmental initiatives still the exception rather than the rule? Where do you see leadership coming in the area of sustainability?
[Author’s commentary] PackExpo is a massive conference that fills up most of McCormick Center when it’s in Chicago. This show went on and on, and literally hundreds of exhibitors featured their slant on sustainability. If the investment made on the exhibit floor in Las Vegas is any indication, this trend has legs.
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The response required by manufacturers to Wal-Mart’s scorecard alone is enough to raise the bar to a level that supports sustainability, is here to stay. For those manufacturers who must prepare to respond, read this:
ECRM and MARS PKG (Packaging Knowledge Group) (http://www.marspkg.com) have teamed up to create a seminar designed to help you understand exactly what you need to do to be compliant with the scorecard. The IOPP has approved the curriculum for this seminar. (http://www.iopp.org)
For information about the seminar dates and content, check out this site:
http://www.sustainability-education.com/sessions.aspx
Help is on the way!
There is no doubt that environmental considerations and the increased cost of packaging derived from oil will cause changes in supply chain operation. As the last step in the route to consumers, retailers will not be immune. Some of this will be seen in the repackaging of products and possibly whole categories, where cellulose based alternatives are used to replace existing containers. The paper vs. plastic question will finally have a definitive answer.
But there are other aspects to this whole effort as retailers consider the cost of operating physical stores. The handling of the “long tail” (the slow moving products you carry either for customer convenience or to offer variety) of products that don’t really pay for the heat, electricity, and square footage they absorb while waiting to be purchased must change. This could be through in-store kiosks or home ordering and delivery. Reduced pack quantities, while increasing the handling cost, will reduce the shelf space and the number of deliveries per week (more items on the same load). Store lighting and outside signage must be a big consideration, even though the actual power usage may be coming down with new technology, the image that a large flashing sign portrays may not be desired. I still don’t see a lot of consumers brining their own bags to the store, but the effort encourage this makes sense. Tools to help consumers reduce the number visits, while boosting the purchases during each visit should be appreciated. This could be done with websites that help the consumer build shopping lists and sequence their results with a particular store’s layout.
In sum, we are all in this together. Anything a retailer can do to show they are concerned about their customer’s challenge to improve the environment, reduce waste, and lower expenses will be paid back by increased loyalty.
The environmental focus is a major one, and it certainly will not go away in the near future. Retailers are well behind the manufacturing industry. so there is a “catch up” period for most. The largest retailers will be most visible, in part because they are the focus of activist organizations and they can make the most impact (the obvious–reducing waste from Wal-Mart stores has a bit larger impact than reducing waste from a 100 store specialty retail chain). Retailers with significant proprietary product lines can have more impact more quickly than aggregators. The real challenge right now is on the solution side. The trend flipped so quickly that, despite the rush to market by many suppliers, finding cost effective solutions and understanding whether those solutions really save money is still somewhat up for grabs. Most retailers could do a lot by taking the simple steps towards reducing waste (lighting, power usage, waste disposal practices).
The focus of big retailers on environmental sustainability is a healthy sign of acceptance of social responsibility. This is especially important in a massive consumer market like America. Fact of the matter is, US retailers have been lagging a bit behind their British counterparts in the acceptance of this responsibility, but they are trying to close that gap now. I was attending a presentation by Wal-Mart COO Bill Simon at the University of Connecticut School of Business, where he was talking about Wal-Mart’s big push towards sustainable packaging and he used the example of a concentrated detergent in a small packaging that they are developing in partnership with their suppliers that would replace the big containers at Wal-Mart. Considering the size of Wal-Mart, this will certainly drive other retailers to look at their environment sustainability practices and carbon foot-print.
The need for an environmental action plan by retailers is obvious but what they do on the sales floor is vastly different from what happens in the back office. Sure there is a commitment to protecting the environment from the customer’s perspective, but how many companies have actually gone paperless? This is the quickest way to help mother earth. I’ve seen companies that require managers to print reams and reams of paper reports only to have them filed and forgotten. Chains have a huge opportunity to clean up the internal functions of their organization and save a ton of money and a ton of paper and do good for the planet as well.
Sustainability is a long term trend, not a fad. Subaru’s Indiana plant is so efficient nothing goes into a landfill. 97% of the waste is recycled and the rest is used to generate steam. Germany ran out of cheap landfill in the early 1990s and passed laws requiring retailers, wholesalers, and manufacturers to take back their waste packaging. US localities are considering a ban on plastic grocery bags. More and more supermarkets sell reusable bags and offer 2 cent rebates to customers who either return bags or use their own. Perhaps someday every state will require meaningful bottle deposits (more than a nickel or a dime) and there will be deposits on newspapers, too. And let’s see if the biodegradable soy-based plastics can come down in price.
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The response required by manufacturers to Wal-Mart’s scorecard alone is enough to raise the bar to a level that supports sustainability, is here to stay. For those manufacturers who must prepare to respond, read this:
ECRM and MARS PKG (Packaging Knowledge Group) (http://www.marspkg.com) have teamed up to create a seminar designed to help you understand exactly what you need to do to be compliant with the scorecard. The IOPP has approved the curriculum for this seminar. (http://www.iopp.org)
For information about the seminar dates and content, check out this site:
http://www.sustainability-education.com/sessions.aspx
Help is on the way!
There is no doubt that environmental considerations and the increased cost of packaging derived from oil will cause changes in supply chain operation. As the last step in the route to consumers, retailers will not be immune. Some of this will be seen in the repackaging of products and possibly whole categories, where cellulose based alternatives are used to replace existing containers. The paper vs. plastic question will finally have a definitive answer.
But there are other aspects to this whole effort as retailers consider the cost of operating physical stores. The handling of the “long tail” (the slow moving products you carry either for customer convenience or to offer variety) of products that don’t really pay for the heat, electricity, and square footage they absorb while waiting to be purchased must change. This could be through in-store kiosks or home ordering and delivery. Reduced pack quantities, while increasing the handling cost, will reduce the shelf space and the number of deliveries per week (more items on the same load). Store lighting and outside signage must be a big consideration, even though the actual power usage may be coming down with new technology, the image that a large flashing sign portrays may not be desired. I still don’t see a lot of consumers brining their own bags to the store, but the effort encourage this makes sense. Tools to help consumers reduce the number visits, while boosting the purchases during each visit should be appreciated. This could be done with websites that help the consumer build shopping lists and sequence their results with a particular store’s layout.
In sum, we are all in this together. Anything a retailer can do to show they are concerned about their customer’s challenge to improve the environment, reduce waste, and lower expenses will be paid back by increased loyalty.
The environmental focus is a major one, and it certainly will not go away in the near future. Retailers are well behind the manufacturing industry. so there is a “catch up” period for most. The largest retailers will be most visible, in part because they are the focus of activist organizations and they can make the most impact (the obvious–reducing waste from Wal-Mart stores has a bit larger impact than reducing waste from a 100 store specialty retail chain). Retailers with significant proprietary product lines can have more impact more quickly than aggregators. The real challenge right now is on the solution side. The trend flipped so quickly that, despite the rush to market by many suppliers, finding cost effective solutions and understanding whether those solutions really save money is still somewhat up for grabs. Most retailers could do a lot by taking the simple steps towards reducing waste (lighting, power usage, waste disposal practices).
The focus of big retailers on environmental sustainability is a healthy sign of acceptance of social responsibility. This is especially important in a massive consumer market like America. Fact of the matter is, US retailers have been lagging a bit behind their British counterparts in the acceptance of this responsibility, but they are trying to close that gap now. I was attending a presentation by Wal-Mart COO Bill Simon at the University of Connecticut School of Business, where he was talking about Wal-Mart’s big push towards sustainable packaging and he used the example of a concentrated detergent in a small packaging that they are developing in partnership with their suppliers that would replace the big containers at Wal-Mart. Considering the size of Wal-Mart, this will certainly drive other retailers to look at their environment sustainability practices and carbon foot-print.
The need for an environmental action plan by retailers is obvious but what they do on the sales floor is vastly different from what happens in the back office. Sure there is a commitment to protecting the environment from the customer’s perspective, but how many companies have actually gone paperless? This is the quickest way to help mother earth. I’ve seen companies that require managers to print reams and reams of paper reports only to have them filed and forgotten. Chains have a huge opportunity to clean up the internal functions of their organization and save a ton of money and a ton of paper and do good for the planet as well.
Sustainability is a long term trend, not a fad. Subaru’s Indiana plant is so efficient nothing goes into a landfill. 97% of the waste is recycled and the rest is used to generate steam. Germany ran out of cheap landfill in the early 1990s and passed laws requiring retailers, wholesalers, and manufacturers to take back their waste packaging. US localities are considering a ban on plastic grocery bags. More and more supermarkets sell reusable bags and offer 2 cent rebates to customers who either return bags or use their own. Perhaps someday every state will require meaningful bottle deposits (more than a nickel or a dime) and there will be deposits on newspapers, too. And let’s see if the biodegradable soy-based plastics can come down in price.