Looks at the importance of sustainable packaging in achieving a sustainable supply chain. Many factors ranging from form factor, packaging weight, to recyclable post consumer content and so forth acting in concert go into green packaging, which can lead to significant cost savings throughout the supply chain, at each single step where packaged materials are used, including consumer packaging itself. The post goes on to list important considerations and attributes related to green packaging.
The pea pod is possibly the greatest sustainable packaging design nature can provide. It packs a lot in a small space, efficiently uses the minimum amount of resources…and best of all its compostable…well sort of unless I eat it!
And like the simple pea pod, few sustainability attributes in a supply chain come together across the value chain than packaging. Packaging and repackaging is ubiquitous along every step of the chain, from product design, prototyping, procurement production, distribution, consumer end use and post consumer end-of-life management. And the more parts that are in use in making of a product, and steps along the way to deliver the parts, the greater the packaging (and hence environmental footprint) involved along that chain. And for every packaged part that comes from someplace else to make a product, a similar carbon, energy and resource use can be measured.
That’s why sustainable practices in packaging are so important in driving supply chain efficiency…and why innovation in the ‘green’ packaging sector has been “white hot” the past several years. A study by Accenture found that retailers can realize a 3 percent to 5 percent supply chain cost savings via green packaging initiatives. So if you extrapolate that type of savings out across multiple tiers of supply chain activity, where packaging is the common denominator, the efficiencies and savings can rack up quickly.
A new report from research organization Visiongain finds that because of a variety of drivers such as carbon emissions, extended producer responsibility and waste reduction targets plus advanced packaging technologies, the sustainable and green packaging market’s worth is expected to reach $107.7 billion in 2011. Their report shows varying degrees of growth from developed to developing nations; however what’s striking is that the growth trend is weathering the slumping global economy and higher production costs.
Sustainable Packaging 101
Sustainable packaging solutions deliver around two colors according to the Accenture report: black (deliver reduced costs) and green (reduce environmental impacts). Sustainable packaging relies on best engineering, energy management, materials science and life cycle thinking to minimize the environmental impact of a product through its lifecycle. Given the past decade or so of science and engineering work around sustainable packaging, there are some discovered and tested attributes, such as:
- Reducing packaging and maximizing the use of renewable or reusable materials
- Using lighter weight, less toxic or other materials which reduce negative end-of-life impacts
- Demonstrating compliance with regulations regarding hazardous chemicals and packaging and waste legislation ( such as the European Directive 94/62/EC on Packaging and Packaging Waste)
- Optimizing material usage including product-to-package ratios
- Using materials which are from certified, responsibly managed forests
- Meeting criteria for performance and cost (e.g., minimize product damage during transit)
- Reducing the flow of solid waste to landfill
- Reducing the costs associated with packaging (i.e., logistics, storage, disposal, etc.)
- Reducing CO2 emissions through reduced shipping loads
Best in Class Examples
I have seen companies stress the importance of the 6 R’s of sustainable packaging (refill, reduce, recycle, repurpose, renew, reuse; WalMart’s 7 R’s of Sustainable Packaging (Remove Packaging, Reduce Packaging, Reuse Packaging , Renew(able), Recycle(able), Revenue (economic benefits), and Read (education); and even the 10 R’s eco-strategy (Replenish, Reduce, Re-explore, Replace, Reconsider, Review, Recall, Redeem, Register and Reinforce).
Associations are stepping up to the plate as well as manufacturers in a variety of consumer product markets. In March of this year, the Grocery Manufacturers Association (GMA) announced the results of survey research by McKinsey that indicated elimination of more than 1.5 billion pounds (800 million pounds of plastic and more than 500 million pounds of paper) since 2005, and another 2.5 billion pounds are expected to be avoided by 2020. Over 180 packaging initiatives were identified and evaluated. The GMA estimated that the reduction would be equal to a 19 percent reduction of reporting companies’ total average U.S. packaging weight.
In the fast moving consumer goods category Coca Cola’s packaging efficiency efforts just in 2009 avoided the use of approximately 85,000 metric tons of primary packaging, resulting in an estimated cost savings of more than $100 million. The company rolled out of short-height bottle closures, reducing material use, implemented traditional packaging material light weighting; and used more recycled materials in packaging production. At the end consumer point, the company has also supported the direct recovery of 36% of the bottles and cans placed into the market by the Coca-Cola system and continues to work with distributors on increasing recovery efforts.
In the electronics space, Dell Computer committed in 2008 to reduce cost by $8 million and quantity by 20 million pounds of packaging by 2012 centered around three themes (cube, content, curb):
- Shrinking packaging volume by 10 percent (cube)
- Increasing to 40 percent, the amount of recycled content in packaging (content)
- Increasing to 75 percent, the amount of material in packaging to be curbside recyclable (curb).
As an example, Dell wanted to find a greener, more cost efficient way to package its computers by eliminating foams, corrugated and molded paper pulp. The solution was sustainably sourced bamboo packaging certified by the Forest Stewardship Council. So far, Dells efforts have resulted in eliminating over 8.7 million pounds of packaging, and they have nearly met their recycled content goal.
Perhaps most significantly, WalMart took a huge step in 2007 to seek supplier conformance around packaging. Since then, despite the initial uproar, there has been an uptick in design and innovative product activity by thousands of key suppliers in response to the mega-retailers challenge. By reducing packaging in the Wal-Mart supply chain by just five (5) percent by 2013, that would 1) prevent 660,000 tons of carbon dioxide from entering the atmosphere, keeping 200,000 trucks off the road every year (that’s a green attribute) and save the company more than $3.4 billion (a black attribute). Walmarts bottom line was to put more products on its shelves in the same space, and also recognized the sustainability attributes that change would make. They also knew that most consumers (me included) just despise excess packaging. Here are two examples of Walmart supplier efforts from a small and large supplier:
Alpha Packaging: The company has a new bottle design for Gumout Fuel Injection Cleaner. The company concentrated the product and switched from PVC bottles (which are not recyclable) to much smaller bottles made from PET (which is recyclable and has 30% post-consumer recycled content). This led to 1) reduced product weight by up to 51% and 2) capability to transport a truck filled with new 6 oz products (formerly 12 oz) equating to 153,600 bottles as opposed to 61,000 originally.
General Mills: The company took a novel approach and they looked at the product first. They straightened its Hamburger Helper noodles, meaning the product could lie flatter in the box. This, in turn, allowed General Mills to reduce the size of those boxes. According to the company, that effort saved nearly 900,000 pounds of paper fiber annually. The company effort also managed to reduce greenhouse gas emissions by 11 percent, took 500 trucks off the road and increased the amount of product Wal-Mart shelves by 20 percent.
Win-Win-Win. For the environment, for manufacturers and suppliers, and for consumers.
Read “5 Steps to Lead Your Organization Down the Path to Environmental Sustainability“, an outline on five critical steps an organization needs to take in order to be successful in promoting sustainability.
Full Circle Collaboration is Vital to Drive Sustainable Packaging
What makes sustainable packaging compelling is that it’s one of the key elements of a product that consumers can see, touch and feel. Over packaging or improper packaging can produce high reaction levels, right? (remember last year’s noisy Sun Chips compostable bag dust up?) But in an interesting post last year in Packaging Digest by Katherine O’Dea of the Sustainable Packaging Coalition, she mentioned the critical importance of collaboration between brand owners and retailers. What was a scary statistic is that “brand owners and retailers may have direct control over as little as 5 percent of the environmental impacts of packaging and only indirect control over the other 95 percent.” On the other hand another study conducted by the market research firm Datamonitor showed of U.S. consumers surveyed, 49% felt that packaging design has a medium or high level of influence over their choice of food and drink products.
Just as there are challenges to drive consumer acceptance of more sustainable types of package designs (especially aesthetics), there are equally challenging design factors (such as package strength, permeability, and other physical factors that may compromise product integrity during shipment.
Opportunities to Leverage the Supply Chain from Design to Post Consumer Package management
High performing manufacturing companies are clearly using sustainable packaging design and manufacturing as a way to lever efficiencies through the product value chain. Companies are finding that using less complex packaging helps cut sourcing, energy production and distribution and fuel costs across the supply chain. The glory days of corrugated packaging as the one stop solution are being replaced with reusable packaging options. Also, reducing the consumption of raw materials, carbon emissions and waste generation reduces manufacturing costs.
Since disposal by consumers is one of the largest waste streams in the supply chain, using less packaging of direct-to-consumer shipments also offers great opportunities for supply chain optimization. The previously mentioned Accenture report recommends that through route planning and sourcing software, “collaboration across the companies in the supply chain is necessary to maximize freight utilization. In particular, retailers need to proactively encourage vendors to provide pallet or “trailer feet” specifications for collecting shipments… retailer’s planners can determine the optimum transportation mode and look for multi-stop opportunities.”
Accenture suggests there are opportunities to reduce the packaging/un-packaging cycle by addressing the product life-cycle and optimized material use. Through ongoing recycling and the use of alternative materials throughout the product value chain, opportunities are created to reduce the volume of packaging waste. Also, take back programs create a two-way transportation flow, with reusable packaging materials being sent back up the supply chain rather than to a landfill.
Remember too that there are several key association and initiatives that can be tapped into, including:
Sustainable Packaging Coalition: http://www.sustainablepackaging.org/default.aspx
Greener Package: http://www.greenerpackage.com/
Sustainable Packaging Alliance: http://www.sustainablepack.org/default.aspx
Sustainable Biomaterials Collaborative http://www.sustainablebiomaterials.org
Reusable Packaging Association: http://reusables.org/
Some final pointers to consider when designing packaging and using the supply chain to drive sustainability:
Source alternative sustainable packaging materials- the innovative options are plentiful.
Evaluate product life-cycle impacts as a way to discover design options that could lead to less packaging.
Anticipate the total energy and resource use over an entire products package life
Evaluate materials disposal and post consumer end-of-product life opportunities
Design products for efficient transport
Schedule and optimize transportation networks
Collaborate, Collaborate, Collaborate!
In our related post “CEOs See Sustainability as Engine for Growth but Industry Sectors Split on Priorities“, Tracey looks at differences in perceptions of sustainability between CEOs in different industry sectors,
© 2011, Dave Meyer. All rights reserved. Do not republish.