Sustainable Packaging

There has been a huge shift in focus on packaging products. Soda companies have been focused for decades on “light weighting” where they have significantly reduced the material in cans and bottles. They continue to work to reduce the amount of packaging material but have to balance low weight against field breakage. But every milligram of aluminum that can be reduced from a can is being worked by Pepsi and Coke (and by extension other products in cans). However, the real change is other companies are feeling the consumer preference for sustainability and are looking at how they package their goods.

One trend I like seeing is the reduction of secondary packaging. Primary packaging is the box or bag that a product comes in that the end user buys. For example, the cereal box that you buy. Secondary packaging is the carton that is filled with a dozen boxes of cereal that typically is thrown-away (or maybe recycled) by the retailer. Where a company can reduce secondary packaging while minimize product damage is going to save a lot of money. A typically RSC carton can cost $1.00 to $3.00 and hold a dozen items. This is big cost for some products and may never been seen by the end consumer. For example, many companies are using a combination of a corrugated tray and heat shrink plastic top. Typically, you need a bottom tray of corrugated cardboard to allow conveyance (i.e. allow the product to go through the miles of conveyors in the supply chain), but the top can be based on the individual product top. This may require stronger primary package. You have probably seen this design if you buy bottled water by the case. Even better is companies eliminated the secondary packaging entirely. You get individual items on a pallet without secondary packaging. This may require significant changes in the retail supply chain (i.e. you can’t order a case quantity, but only a full pallet and have to send a full pallet to the store). Another example is using shrinkwrap instead of cartons. This works for items with a uniforming sized top and bottom (boxes or cylinders). They key is to ensure the product is conveyable in this packaging.

The other item I like is the removal of cardboard in primary packaging. You are seeing more product (even premium brands) in just a plastic bag. You can get more product in a carton and significantly reduce cost. The big impediment is consumer perception (or many companies perception of consumer tastes). However, I think the USA will be many years away from bulk dispensers in retail for branded items. Imagine Kellogg’s having a Kiosk at your local supermarket where you would buy their branded cereal out of bulk barrels with a scope or dispenser similar to buying granola at Whole Foods? Or buying cleaning products out of a bulk dispenser directly into your own spray bottle. Many cleaning product companies have refill size containers, but typically the cost per unit is similar to the smaller size with a spray nozzle and still has colored labels and premium shaped/color plastic packaging.

Unfortunately, some changes are good for the environment and others maybe more cosmetic. There is a push for more fully transparent containers. However, to get plastic that shows its contents as clear as glass, may actual require more weight (and cost more) than a semi-translucent plastic. The biggest issue I see is that many packages combine material (like a plastic and a metal) that actually inhibit recycling and bio degrability. Most of us are aware of the issue with kids drinkboxes that mix plastic, metal, and paperboard into a unrecyclable mess.

Some trends are a negative. I am seeing more “individual” or “conveyance” packed items. This is like the packaging of tissues in 2 packs or aspirin in single packs. So, the consumer buys a box that has 50 individual packs inside? There is more cost (and weight) in the packaging than in the actual product.

Ironically, emerging markets typically have less packaging then developed markets. I suspect that large supermarket chains and big box retailers require the secondary packaging for their automation while in the emerging markets most of the product handling is still by human hands which can deal with various packaging types. The ironic part is product damage is expontially higher in emerging markets, but even a 0.5% damage rate in America could be a charge back issue to a consumer products company.

For sustainable packaging, the number one advice is to cut as much packaging as possible while still delivery product with minimum damage and maintaining brand awareness. Then try to think about using product that can be recycled or at least allow the packaging to be separated to be recycled. Then for the most forward thinking companies, how can you distribute your product while maintaining its brand and logo without any packaging at all? That could be a big difference in the market.