November 13, 2008
Sustainability Continues as Focus of Packaging Industry
By Ronald Margulis,
Managing Director, RAM Communications
Despite the economic
downturn, or perhaps because of it, sustainability was once again the buzzword
of this week’s PackExpo conference in Chicago.
Retailers and manufacturers discussed the topic in several workshops, while
hundreds of vendors on the exhibit floor flouted the environmental benefits
of their products or services.
A packed room of attendees
heard Amy Zettlemoyer-Lazar, packaging director,
Sam’s Club and co-manager of Walmart’s Sustainability Value Network deliver
a keynote, Keeping Score: How Walmart and its Suppliers Continue to
Advance Packaging Change, Innovation and Sustainability.
The world’s largest retailer,
she said, has learned a good deal from its vendors since it announced its
Packaging Scorecard, which is designed to make packaging greener, more
sustainable and less wasteful, in 2006. As part of its ongoing sustainability
efforts, Wamart Stores intends to reduce total packaging used in its
supply chain by five percent by 2013.
Betsy Cohen, vice president
of sustainability at Nestlé, urged listeners to become activists in her
keynote, Food Safety, Product Protection, Sustainability…Where Does
Packaging Go?
She said, "Packaging
serves as way to get goods to consumers. I want to be part of the solution,
and working for Nestlé or your companies, we have a chance to do that." Among
Nestlé’s initiatives are glass-to-plastic conversion for baby food containers,
which cut solid waste 67 percent, and Nestlé Waters moving to lightweight
bottles.
Underlining the importance
of sustainability to businesses across industries was a research study
benchmarking the state of sustainability in packaging released at the show
by Packaging Digest and the Sustainable Packaging Coalition. The survey
revealed that familiarity with sustainability has grown rapidly in the
past year, with 67 percent of the respondents saying they were moderately
or very familiar with the issues. Respondents said that brand owners and
retailers have increased their sustainability demands, with 53 percent
saying that more than half of their customers are seeking more eco-friendly
packaging.
Discussion Questions:
How is the trend toward sustainable packaging impacting the retail industry?
Where do you see it headed next?
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Just a moment ago I watched an interview with T. Boone Pickens and other funds experts, all predicting double digit unemployment on the way, and lots of other not-so-wonderful economic realities ahead. I think sustainability, as well as the trendy “green” concerns will take a back seat for a while.
Events like this are of course planned months in advance. So, the focus and topics are not reflective of the current environment, but that of earlier this year.
It will be interesting to see what happens to sustainability initiatives in the short term. Walmart is doing relatively well and can afford to continue the focus–but it will push less on vendors in the short term.
Quickly falling fuel and transportation costs have in just a short time changed the economics around many sustainability moves, including packaging.
There will be almost no companies right now that would take on higher costs to get more green. However, many packaging improvements are just smart moves in and of themselves, and likely will continue, though with perhaps less urgency for a time.
But would you risk a packaging change (e.g., Tide moving to a more concentrated form and package) right now if there was any concern it might impact sales?
You could take that risk when times were good, when the reduction in transport costs on all units sold would mitigate any marginal sales loss from the change, and you thought the consumer would buy green.
All those questions are up in the air right now.
Totally agree with David above; during the upcoming hard times, being “green” to save the planet is not going to matter as much as being green to save money/energy costs NOW. Both are good and we may be talking about semantics, but saving money, in all its forms, will be THE topic for the next few years. The key will be to tie the two together.
Real functional improvements in the reduction of packaging is here to stay. While these efforts do fall under the umbrella of “sustainability” and while they have been the poster child for a number of retailers’ efforts, it has an ROI.
Admittedly there is a trend towards “me too” green out there, but there are real solid business reasons for many of the sustainability initiatives. Reduction in fuel used in fleets through innovations in the supply chain industry, packaging improvements and product configuration changes (concentrated detergents) save real money and benefit the environment.
I don’t see Walmart, for example, backing off of their initiatives relative to sustainability, they continue in earnest and their suppliers and third party suppliers will be focused by default.
Most operations that I’ve dealt with handle most inventory through a centralized DC. And each one that I have worked with uses lockable plastic totes extensively through the allocation process. Most chains allow orders in multiples of 3 which would require some sort of plastic sleeve to prevent breakage. The plastics are probably the first things to go but that would require most stores to carry more inventory than needed for rotation purposes.
Any way a retailer can save a dollar is a welcome idea right now. Unfortunately, going green requires a major cash and retooling commitment which no retailer will want to put out right at the moment. I think we will begin to pick up in change when the cash flows increase.
Sustainability continues to grow in importance at retail. Most people want to make better choices about the packaging used, and there is greater awareness of what is helpful, not hype. For the retailers, CPGs and manufacturers who have worked to understand sustainability say it is not a marketing initiative; it’s a way of doing business.
Much of the benefit from sustainable packaging initiatives is developed during the design phase. Becoming mindful of opportunities for reducing the amount of material used, choosing materials that are responsibly sourced, using less energy and with better end of life options will help all of us in the long run. Designing with cube efficiencies in mind and optimizing distribution will save time and costs.
There are many steps to be taken for all involved–collaborating with others in the value chain leads to better solutions for now and in the future. Packaging choices within sustainable guidelines are just that–a choice that delivers packaging functionality, shelf impact and cost effectiveness–with the best materials and systems for the job. Guiding sustainable choice is the Triple Bottom Line–People, Planet and Profit. Sustainable initiatives add value to our businesses and our lives.
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Just a moment ago I watched an interview with T. Boone Pickens and other funds experts, all predicting double digit unemployment on the way, and lots of other not-so-wonderful economic realities ahead. I think sustainability, as well as the trendy “green” concerns will take a back seat for a while.
Events like this are of course planned months in advance. So, the focus and topics are not reflective of the current environment, but that of earlier this year.
It will be interesting to see what happens to sustainability initiatives in the short term. Walmart is doing relatively well and can afford to continue the focus–but it will push less on vendors in the short term.
Quickly falling fuel and transportation costs have in just a short time changed the economics around many sustainability moves, including packaging.
There will be almost no companies right now that would take on higher costs to get more green. However, many packaging improvements are just smart moves in and of themselves, and likely will continue, though with perhaps less urgency for a time.
But would you risk a packaging change (e.g., Tide moving to a more concentrated form and package) right now if there was any concern it might impact sales?
You could take that risk when times were good, when the reduction in transport costs on all units sold would mitigate any marginal sales loss from the change, and you thought the consumer would buy green.
All those questions are up in the air right now.
Totally agree with David above; during the upcoming hard times, being “green” to save the planet is not going to matter as much as being green to save money/energy costs NOW. Both are good and we may be talking about semantics, but saving money, in all its forms, will be THE topic for the next few years. The key will be to tie the two together.
Real functional improvements in the reduction of packaging is here to stay. While these efforts do fall under the umbrella of “sustainability” and while they have been the poster child for a number of retailers’ efforts, it has an ROI.
Admittedly there is a trend towards “me too” green out there, but there are real solid business reasons for many of the sustainability initiatives. Reduction in fuel used in fleets through innovations in the supply chain industry, packaging improvements and product configuration changes (concentrated detergents) save real money and benefit the environment.
I don’t see Walmart, for example, backing off of their initiatives relative to sustainability, they continue in earnest and their suppliers and third party suppliers will be focused by default.
Most operations that I’ve dealt with handle most inventory through a centralized DC. And each one that I have worked with uses lockable plastic totes extensively through the allocation process. Most chains allow orders in multiples of 3 which would require some sort of plastic sleeve to prevent breakage. The plastics are probably the first things to go but that would require most stores to carry more inventory than needed for rotation purposes.
Any way a retailer can save a dollar is a welcome idea right now. Unfortunately, going green requires a major cash and retooling commitment which no retailer will want to put out right at the moment. I think we will begin to pick up in change when the cash flows increase.
Sustainability continues to grow in importance at retail. Most people want to make better choices about the packaging used, and there is greater awareness of what is helpful, not hype. For the retailers, CPGs and manufacturers who have worked to understand sustainability say it is not a marketing initiative; it’s a way of doing business.
Much of the benefit from sustainable packaging initiatives is developed during the design phase. Becoming mindful of opportunities for reducing the amount of material used, choosing materials that are responsibly sourced, using less energy and with better end of life options will help all of us in the long run. Designing with cube efficiencies in mind and optimizing distribution will save time and costs.
There are many steps to be taken for all involved–collaborating with others in the value chain leads to better solutions for now and in the future. Packaging choices within sustainable guidelines are just that–a choice that delivers packaging functionality, shelf impact and cost effectiveness–with the best materials and systems for the job. Guiding sustainable choice is the Triple Bottom Line–People, Planet and Profit. Sustainable initiatives add value to our businesses and our lives.