“One of the most striking developments was how aggressively companies are moving to translate sustainable packaging goals into robust baselines and specific tactics to realize more sustainable packaging from ideation to commercialization.”
Lisa Grice, Executive Director, Sustainable Products and Packaging
Driving Innovation in Packaging Strategy
Takeaways from the Virtual American Packaging Summit 2021
From July 13-15th, an Anthesis delegation attended the annual American Packaging Summit to explore innovations and best practices in packaging, including design, materials, and branding. It brought together professionals from diverse industries including retail, beauty, pharma, food and beverage, and CPG – all experiencing the same demand from stakeholders for sustainable packaging solutions and more broadly circular solutions.
Here is our roundup of key takeaways from the American Packaging Summit.
The Consumer Experience
It’s becoming increasingly difficult to design effective sustainability messaging on packaging due to the overload of logos and certifications in the marketplace. Generally, consumers are interested in recycled content and recyclability and don’t have a great understanding of some of the challenges and nuances. Labelling on how a product is recycled can also be a challenge for manufacturers because recycling processes vary significantly by region.
While product packaging remains a key touch point with consumers, organisations must consider the consumer experience in the design phase of a sustainable packaging solution. Pilot programs are a key tactic to understanding the customer experience. Without customer feedback, a sustainable solution threatens to disrupt the customer experience instead of improving it. For example, a McCormick Spice representative shared a customer compliant following the rollout of a new plastic container that incorporated PCR, making the historically clear container cloudy. The customer told her, “I can’t see my parsley.” A successful packaging program must consider customer impacts and the trade-offs associated with specific packaging attributes.
Corporate Packaging Solutions
During the conference we heard about a few corporate packaging solutions. Depending on a company’s product or service, a packaging program can look wildly different across organizations.
- P&G has set ambitious 2030 goals to have 100% of packaging be recyclable or reusable and to reduce their use of petroleum-derived resin by 50%.
- General Mills spent years innovating and transitioning to a recyclable wrapper in their Nature Valley granola bar that can be recycled even when contaminated (not clean).
- Novolex is a packaging developer and manufacturer by nature. Innovations include “Dubl Life” – a paper grocery bag that is made of 100% recycled content.
- Kimberley-Clark has set 2025 goals to use 100% packaging to be recyclable, reusable or compostable and to have 20% of average recycled content in plastic packaging. By 2030 their goal is to make a 50% reduction in the use of new, fossil-fuel-based plastics and 75% of the materials in products will be biodegradable or recovered and recycled.
Ecommerce Packaging Design at Amazon
Design teams must consider that with the growth of ecommerce, packaging waste has become more visible to the consumer because it lands in their own living room, and waste bins. And yet, with the rise of ecommerce which can be difficult to recycle.
Since 2018, Amazon’s focus has been on a frustration-free packaging (FFP) program which prioritizes the customer experience. Amazon has developed a tiered system of certification to reward suppliers who are reducing packaging. Considerations include whether it’s a curb-side recyclable packaging material, its ease of opening, the amount of packaging used, whether it can ship without an Amazon overbox, the damage and defect rates and whether prep is required by Amazon. If a supplier used either Tier 1 (FFP) or Tier 2 (SIOC) packaging, Amazon will provide an incentive based on the amount of packaging reduced by volume and the certification tier.
For example, the incentive system drove Lenox, a dishware company to move from retail packaging and overbox to FFP packaging, reducing its weight by 36 oz and volume by > 4000 cubic inches by designing smart, innovative packaging. Amazon has an FFP calculator to help suppliers get started. Amazon serves as an exciting example of how incentive programs from a major retailer can disrupt how thousands of businesses design their packaging.
“We are looking at everything from a total cost of ownership perspective. While cost is still very important, areas such as supply assurance and risk mitigation are as important. If your machines are not running, you won’t drive savings either.”
Christian Gerdes, Global Category Director – Packaging
Packaging supply chains and procurement
Procurement sits at the nexus of a company and its suppliers giving it the unique power to influence and initiate partnerships and sustainability throughout the value chain. Furthermore, an agile procurement system is the bedrock to building a strong sustainable packaging solution.
Traditionally procurement has included sourcing, negotiations and contracts, performance management and business compliance all with a focus on efficiency and cost reduction. In recently years, procurement has evolved to include category management, lifecycle management, risk management and supply assurance with a focus on full value chain cost management, responding to consumers and assessing potential risks. In that vein, Christian Gerdes of Kimberley Clark suggests that procurement should adopt a total cost of ownership mindset to understand cost and trade-offs across the entire life cycle of a product or service.
COVID-19 and the disruptions that ensued made procurement challenging. It highlighted the volatility of the market and how rapidly consumer expectations change. In order for retail companies to grow their customer bases, companies must respond to their evolving needs with agility. This includes responding to demand spikes and developing strong partnerships in the supply chain to mitigate business risk. Cross-functional collaboration and task forces will support an organization to respond rapidly to the routine shifts in stakeholder expectations, to build momentum around goals and leverage best practices to ultimately maximize impact.
State and Federal Policy Driving Sustainable Packaging
It’s clear that while policy can be a major lever to drive sustainable packaging, it can’t be a one size fits all approach. The time-horizon and practicality of packaging solutions varies immensely depending on the industry. For example, for food contact applications, it can take years to develop packaging options that include recycled content and are approved by the FDA while other markets could adopt recycled packaging almost overnight. Policy has an exciting role to play in extended producer responsibility (EPR) and hopefully in the standardization of recyclability labeling going forward. While the How2Recycle Label helped clean up recycling streams there is still a gap to bridge in educating the public about recycling and packaging waste.
To date, there are two primary approaches to policy in the packaging space – direct mandates (also called “rates and dates”) and eco-modulation in EPR schemes. The former requires producers to incorporate recycled content into packaging whereas the latter provides an incentive to do so. Generally, we’re seeing a move from an emphasis on taxes and bans to EPR programs, including at the state level with Maine and Oregon paving the way. EPR is focused on funding collection and recycling of plastic packaging waste. However, given the multitude of players involved in the packaging life cycle, it can be challenging to identify who is responsible to pay the fee– the manufacturer, the recycler, the reprocessor or the remanufacturer.
Sustainable packaging solutions means something different at each organization. Understanding the role it plays in your end consumer’s experience, among departments in your organization and throughout your entire value chain is critical to driving impact. Depending on an organization’s other sustainability priorities, sustainable plastics and packaging solutions offer another avenue for help brands achieve their goals around circularity and net zero targets among others.
To learn more about how Anthesis can support your company’s sustainable packaging journey check out our dedicated packaging webpage and our retail and CPG sector webpage.
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