More Sustainable Packaging as an Opportunity for Collaboration We recently researched the connection between packaging and sustainability as part of the upcoming report we produced for Consumer Goods Technology's Shared Strategy, a study of the potential challenges and successes of collaboration among retailers and consumer packaged goods (CPG) companies. Packaging is an interesting topic because of its role in both the supply chain and product lifecycle.
For CPG manufacturers, packaging promotes the brand, protects the product, and presents critical information. Along comes sustainability, and packaging decisions become more complex - reducing the quantity and weight, making materials more recyclable, and using more recycled content in all forms of packaging. We believe more sustainable packaging is an opportunity for CPG manufacturers and retailers to collaborate with favorable results.
Rising Importance of Sustainable Packaging
When we first surveyed manufacturers in 2008, packaging redesign of products or shipping/transport cartons was 8th in importance compared to other green initiatives. Today packaging is getting more attention, and we expect most if not all of the 70% of CP manufacturers and retailers that view sustainability as important in a recent IDC Manufacturing Insights survey are taking a closer look at how packaging is designed and used.
It's Not As Easy As You Think....
Transitioning to greener packaging is not straight forward as Frito-Lay can attest to its experience with its SunChips' compostable packaging and consumers' mixed reactions. CP manufacturers also worry that smaller packaging could mean losing valuable shelf space. On the other hand, greener packaging should be a plus for CP and retail brands. Greener suppliers may be more favored suppliers, depending how closely retailers connect procurement practices with sustainability goals. Walmart is the obvious example; the retail giant hosted its fifth annual Sustainable Packaging Exposition and is working toward its goal of reducing packaging by 5 percent globally by 2013 from its 2008 baseline.
Although many CP manufacturers and retailers are making progress toward more sustainable packaging, we've highlighted efforts from three companies newly added to the Dow Jones Sustainability Index. These companies are taking multiple approaches to greener packaging, including transitions to materials that are renewable, recyclable, or from recycled content, minimizing primary product packaging, and changing and reducing packaging materials (pallets, plastic and bundling film, and more) used during the shipping process. The results benefit the relationship between manufacturer and retailer, and just as importantly, win consumers and contribute to the bottom line.
Taking a Look At Existing Progress and Approaches
In the process of conducting our research on the relationship between sustainability and packaging, we came across a number of publicly available resources, including:
- Consumer Goods Forum and its report "A Global Language for Packaging and Sustainability", framework and measurement system that trading partners can use to help make decisions about packaging and sustainability, output of its global packaging project.
- PricewaterhouseCoopers report "Sustainable Packaging: Threat or Opportunity?"
- Sustainable Packaging Coalition's report "Sustainable Packaging Indicators and Metrics Framework".
- Packaging Digest and Sustainable Packaging Coalition study: The fourth annual study, conducted in October, resulted in 630 responses from packagers, material and machinery suppliers, CPG manufacturers, and retailers . Not surprisingly, Walmart and Procter & Gamble received the most votes for sustainability leadership, and of course, Both companies have specific targets for packaging improvements. Survey results pointed to the need for global sustainability metrics and vendor scorecards or ratings to compare packaging suppliers' sustainability practices. More information will be available later in December when Packaging Digest holds a webcast.
Finding More Innovation in Packaging and Using IT to Support the Transition
A focus on sustainability-motivated packaging improvements is going to require some new ideas, processes, and perspectives, while keeping in mind customer expectations for price and quality and packaging's strong connection to brand and reputation.
We expect IT to be a component in identifying options and optimizing alternative scenarios. Despite the fact that packaging may be just a small component of a product's overall environmental footprint, it's still an opportunity for improvement and a highly visible issue for customers and consumers. The complexity often comes from balancing so many requirements and constituents' needs - from product design, packaging costs, the sophistication of packagers and packaging vendors, supply chain distribution, and customer use, for example.
As a result, sustainable packaging requirements will impact how companies use tools and applications in PLM - from product development to lifecycle assessment (LCA); supply chain - from transportation to sourcing and supplier communication; analytics for tracking performance metrics and improvement; and optimization across price, quality, and sustainability.
When I spoke to one of our retail analysts, Leslie Hand, she reminded me that packaging used to be slow to change, but now there are many more pressures forcing packaging to change more quickly, including sustainability. And we both agree - it's the increasing pace of change and the complexity of the decision making that makes this an area worth researching how IT can support that change. Look for more analysis on this topic from us, especially once Leslie attends the 2010 Sustainability Summit sponsored by the Food Marketing Institute (FMI) and Grocery Manufacturers Association (GMA).
Let us know your thoughts by commenting here or by sending me an email at firstname.lastname@example.org.