Socially Responsible Packaging

Stephen DeAngelis

April 29, 2013

Bruce Horovitz, a marketing reporter for USA Today, recently penned an article discussing how more companies are becoming socially responsible. He credits much of this trend to the Millennial generation, a “trend-setting, if not free-spending group of 95 million Americans, born between 1982 and 2004.” [“Millennials spur capitalism with a conscience,” 27 March 2013] He continues:

“In an ultra-transparent world, where information zips from Facebook to Twitter to Instagram, just about everything a company does is out in the open, says John Mackey, co-founder of Whole Foods, a ground-breaking company in local community support. ‘If everything you’re doing is seen,’ he says, ‘it’s human nature to do things that people would approve of.’ But it’s no longer just outliers such as Ben & Jerry’s and Whole Foods doing the right thing. Big consumer brands such as Panera, Starbucks and Nordstrom are members in good standing of the Do-Gooder Society. More likely sooner than later, corporate kindness that doesn’t have its origins in the public relations or human resources department may become as common as coupons. Even in a dicey economy, kindness sells.”

It’s not just kindness and compassion that Millennials are concerned about. They seem to be a generation much more attuned to making the world a better place in many ways, including environmentally. Over the past couple of years, sustainability has become a hot topic in supply chain circles. Packaging plays a significant role in promoting sustainability. Too much packaging is both wasteful and costly. Too little packaging, on the other hand, can result in product damage that also results in waste and monetary loss. In addition to protection and security, designing the perfect package must also take into account consumer aesthetics. After all, manufacturers produce and retailers sell products in order to make a profit. Products that sit unsold on a shelf help no one. Rosemary Grabowski, Global Marketing Director, CPG-Retail, Dassault Systèmes, reports, “As anyone involved in the consumer packaged goods (CPG) industry already knows, the role of packaging in driving sales cannot be understated. Viewing products on a store shelf is still the leading way for consumers to be aware of what products are available. Eighty-five percent of shopping decisions are made in-store — and most shoppers make their purchasing decisions within 5-8 seconds of seeing the product on the shelf. The package design, color and artwork chosen serve to stop, hold and close the shopper to select the product that is right for them.” [“Designing the Perfect Package Better, Faster and Smarter than your Competition!Consumer Goods Technology, 11 September 2012] She continues:

“With the increased importance of packaging in the overall success of a product, companies across the globe are pouring additional resources into understanding their consumer base and what exactly they want in a product. CPG companies, their packaging suppliers and the retailers that distribute these products need to start their processes by understanding the total consumer experience. What features and functions are most important to my consumers? How can I make my product stand out from the rest? What colors catch the eye? What is the optimal shelf placement? This is about defining the key elements of what is required to maximize the ability to stop, hold and close the consumer. Answering these questions with facts and insights will help improve our success in breaking through the clutter on shelf and deliver a more pleasant overall product experience.”

As Millennials become the prime target for marketers, how “green” a package is will likely become more important. Grabowski points out that package design is becoming increasing complex. “Packaging design itself is full of contradictions,” she writes. “The package must be tamper-proof, yet easy to open. It must be attractive, yet strong enough to handle transportation and storing. Packaging must be designed with sustainability in mind, yet secure enough to protect the product inside. And packaging must meet many regulatory requirements, yet still draw a consumer’s attention at shelf.” She notes that package design can no longer be “a siloed process, held completely separately from manufacturing and production.”

 

If you think that too much fuss is being made over packaging, just consider how much is spent on packaging in two sectors: consumer packaged goods and food. According to the Procurement Leaders staff, “The global consumer goods (FMCG) packaging market will reach $436.5bn in 2013, as emerging markets demand FMCG products.” [“Consumer goods packaging market tops $436bn,” 23 September 2012] And the Modern Materials Handling staff reports, “Food packaging is approximately a $340 billion industry worldwide. In the U.S., about a third of household waste is food packaging, and much of this cannot be recycled.” To address challenges like this, the “Rochester Institute of Technology will help to create the Center for Sustainable Packaging, an education and research center dedicated to the development and use of sustainable packaging.” [“Center for Sustainable Packaging created at Rochester Institute of Technology,” 18 September 2012] A report issued last fall by the consulting firm Deloitte reaffirms the need for more research and development of sustainable packaging. “Achieving breakthrough improvements in sustainable packaging is more difficult than simply substituting one material for another,” Deloitte reports. [“You Need to Completely Re-Think Your Approach to Packaging, Report Says,” SupplyChainBrain, 29 October 2012] The report, entitled “Thinking Outside the Box: Throw Away Your Current Approach to Packaging,” points out that “many companies are seeking to improve product stewardship, achieve waste-reduction goals, and save money through sustainable packaging.” The report concludes:

“The next frontier in this area requires a radical re-think of the value chain, thus achieving ‘disruptive’ improvements that not only reduce waste, energy and raw materials but also improve time-to-market, quality and margins. Sustainable packaging requires a healthy dose of creativity, strategic flexibility, and coordination across multiple functions of the organization. This may involve designers, manufacturers, merchandisers, buyers, suppliers, logistics providers and marketers — all challenging each other to break free from traditional conceptions of what constitutes packaging and working through the interdependencies that new product delivery models require. Companies that can embed sustainable packaging considerations throughout their supply chain management processes, from demand-and-supply planning to delivery and returns, can realize substantial environmental and economic benefits.”

As the global middle class continues to increase, demand for packaged goods will also grow. The Procurement Leaders staff notes, “Packaged goods are often viewed as superior quality and more hygienic, explaining emerging market consumers’ preference for them.” As the demand for packaged goods grows, the importance of sustainable packaging also increases. The dMass staff reports, “There are a lot of ideas for reducing the waste associated with packaging, from reducing the amount of materials needed for packaging, to making it easier to recycle packaging or using recycled materials as inputs. Designer Aaron Mickelson’s concept is different: make packaging ‘disappear’ altogether.” [“Resource Fix: Integrating packaging with products,” dMass, 18 February 2013] Mickelson’s ideas include printing packaging information right on the surface of products using ink that washes off, eliminating the need for outer packaging, and letting the product serve “double-duty as packaging.” The article concludes, “Incorporating packaging right into products would reduce the amount of resources used for delivering products, as well as resources used to dispose of or recycle packaging.” Tom Szaky reports on another zero waste packaging idea: edible packaging. He writes:

“Innovation is not just emerging in the form of reuse and redesign of product packaging, but in the form of a new initial purpose. For as long as we know, packaging is the part of the product that gets thrown away. Now there are several scientists working to create ‘edible packaging’ for products to help eliminate waste. The idea is controversial, and would require our society to adjust its norms about what is and isn’t considered edible.” [“Giving packaging a second chance at life,” Packaging Digest, 1 April 2013]

Szaky insists that “most consumers are blissfully ignorant of [the] important tasks” that packaging performs. Lora Cecere agrees. She writes, “It is pretty on the shelf, but it can be a problem for the sustainable supply chain. But in fact, unsuspecting consumers would never guess at the issues that the package on the shelf represents for the sustainable supply chain.” [“Pretty is as Pretty Does?” Supply Chain Shaman, 17 December 2012] Despite consumer ambivalence to what goes into packaging decisions, Szaky believes that the challenges associated with package design also represent opportunities. He writes:

“Most product packaging has several aspects to it which provide reasons for a product’s life to end. Physical life, functional life, technical life, economical life, legal life, and loss of desirability lead to products being thrown out or recycled. However, instead of looking at these in a negative way, we can look at each ‘form of life’ individually and find ways to extend them. … In addition to the obvious fact that finding new uses for and redesigning product packaging is beneficial to the environment and supports innovation, it can also be good for business. Brand logos are printed all over product packaging, so if it just gets thrown out or recycled, people will no longer see it, and brand equity is lost. Packaging that is redesigned or designed for reuse helps to preserve the brand equity of those products for a little longer. … Reduce, reuse, recycle … redesign. Redesign is the fourth ‘R’ of the future when it comes to eliminating waste. Whether it’s redesigning packaging to be completely edible, creating no waste, or finding a way to design product packaging for new purpose and extend its life long term, there is no doubt that we are taking steps towards innovation in the future of waste management.”

All of this attention to sustainable packaging is good news for the environment as well as the bottom lines of businesses that successfully achieve an optimally designed package. As the Millennial generation exerts even greater influence on the marketplace, companies that offer sustainable packaging are going to be ahead of the game.