Wednesday, 01 February 2023

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Turning Packaging into a Sustainable Business Opportunity

Sustainability is not just a packaging industry issue. Sustainability represents one of the biggest challenges facing all of us today. Consumer product packaging has traditionally been focused on delivering the highest quality products safely and efficiently while attracting and enhancing the consumer experience. Although most packaging accomplishes these goals, it also has contributed to very substantial and serious end-of-life issues, as much of it has ended up as waste. Now, brands are looking for sustainable solutions to revolutionize their product packaging and play their part in driving the world toward a more circular economy. Consumer behaviors change with any global crisis, and it seems that Covid-19 has had three major impacts on the plastic that most products are still packaged in.

  • Firstly, people are buying more products wrapped in plastic than ever.
  • Secondly, the huge rise in fast food and delivery services has led to a similar increase in single-use plastic waste.
  • Third, home delivery of groceries has become the norm for many people. And with most deliverable goods being long-life products, you can bet your life that these, too, will involve some degree of plastic packaging.

In the coming years, we will see which changes are here to stay – and which companies manage to balance the increased demand for packaging materials with consumer concerns about sustainable packaging, all while adhering to the new regulations governments are sure to pass to combat climate change.

E-commerce has made fossil-based plastic waste one of the biggest ecological problems that we must solve, and plastic’s emission-intense lifecycle and its contribution to climate change is something we simply cannot ignore.

The other side of the coin is that plastic is a phenomenally useful material that makes our lives easier and safer. It has helped to solve food shortages at a global level, protected our products, and kept our food fresh. That is why it is so prevalent. But the fact that 98 percent of these plastics are oil-based is now forcing us to look at packaging materials in a completely new way.

Most packages are created by agencies, and the main focus is usually on the visual design of the product. But if companies make sustainable service design a prerequisite, and designers are offered platforms and tools to make sustainable material choices, we will be on the path to fossil-free packaging innovations.

Image Reference: https://www.naturefresh.ca/why-sustainable-packaging-is-important/

Leading companies to that path is often motivated by consumer wishes. Brands listen to their customers – but the urgency to solve the plastic problem is not only motivated by ecological brand image questions, it is also down to legislation. When regulatory forces start to take a closer look at defining terms such as “recyclable,” “green,” and “eco”, many companies may find themselves asking why they didn’t start the work sooner.

The end goal in solving the plastic crisis should be making sure that the packages we use are reusable or recyclable, and that they are made of raw materials besides oil. It should be every company’s goal to limit the amount of plastic that ends up in nature or landfill – and to ensure that any that does and does not cause any harm to marine life or other ecosystems.

The good news is that the materials of the future are no longer in test tubes. They are in the pilot phase, ready for industrial production.

A few companies that are supplying sustainability alternatives are:

• Paptic is a company producing sustainable alternatives to plastic, such as recyclable paper bags that can be used tens of times. They are renewable, recyclable & reusable packaging material made of renewable raw materials. Paptic is a pioneer in the fight against plastic pollution. Since December 2018 renewable, reusable, and recyclable.

• Woodly has created plastic products entirely from softwood cellulose, without fossil-based ingredients. These are the solutions of tomorrow, already available today.

Even though forests are a renewable resource, it takes time for them to renew. Therefore, the use of forests must be on an economically sustainable basis. Every year the consumer societies of Western countries exceed the carrying capacity of the planet Earth. We cannot continue consuming materials at our current rate and as a society, we need to transition to more efficient management of materials, to a circular economy, and a focus on recycling. Economic sustainability and sustainable consumption are secured by keeping materials in circulation for as long as possible. In practice, this means that instead of disposing of materials and items after a single use, we recycle, fix, share, rent, and update them.

Image Reference:https://www.istockphoto.com/photo/recycle-symbol-made-of-used-plastic-bottles-gm693314278-128017113

Recycling is a big part of the future of plastics as the industry develops ways to meet the growing material demand sustainably. Wood-based and recyclable plastic is designed to reduce the need for both fossil feedstock and virgin material.

Image Reference: https://ecofriend.com/bio-plastics-good-bad-ugly.html

Carbon footprint of plastics:

Here is a more practical definition of carbon footprint - The carbon footprint of a product or an activity is a measure of its impact on the carbon balance. The production of products always causes greenhouse gas emissions, and these emissions constitute the carbon footprint of a product.”

Typical fossil plastics have a global warming potential of between 1.7 and 3.5 kg of CO2, depending on the type of plastic. This means that for every kilogram of fossil-based plastic produced, there is between 1.7 and 3.5 kilograms of carbon dioxide released.”

In packaging, the industry is mainly used to seeing the three P’s, which are polyethylene, polypropylene, and PET. These are all materials that can be categorized as traditional fossil plastics. Packaging can be done in a carbon-neutral way.

Packaging solutions are becoming a more prominent subject by the minute due to the current climate of our planet. It is a simple fact that we cannot get rid of plastics, but we can redesign them and offer carbon-neutral packaging answers in hopes of a greener future.

The ongoing race of the winning concepts

Demands for sustainability open doors to innovation, and packaging is the perfect canvas. In addition to protecting products and telling us what they contain, the purpose of packaging can evolve into something we’ve never seen before.

With families getting smaller and cities being awake 24/7, new demands arise for healthier, fresh food that is smartly packaged. A lot of the information that normally appears on packaging should be moved from the actual physical wrapper to digital platforms. There, consumers could get product information from global companies in their language.

Packages are not a necessary evil, but an opportunity. No matter how hated it might be, there is no denying that plastic has done a lot for humankind in terms of fighting food shortages. The next step can be supporting public health with fossil-free packaging materials. Smart, biodegradable packages can proactively recommend the right kind of personalized diet that supports people’s health.

To be a leader in sustainability, a packaging manufacturer needs to make sustainable solutions available to a greater number of brands and needs to take a leadership role in educating brand owners about the right options for their brand. One of those responsibilities is to eliminate misconceptions about materials and processes that sound sustainable but are not. Another responsibility is to help brand owners understand the claims they can make based on the sustainable solution they have chosen.

Recycling market development is having a resurgence. What started in the 1990s as a key strategy by the US Environmental Protection Agency (EPA) to reduce environmental impact via landfill diversion and greenhouse gas reduction, is now being revisited. Supporting end markets for recycled materials is being looked at as a solution to our dependence on restricted export markets in Asia, expanded interest in recycled content, and increased focus on creating circular economies. Since the state of Washington launched a new recycling development center in 2019, four more states — Colorado, Maryland, New Jersey, and New York — have looked to this model to help advance circularity and create economic growth.

Today’s successful programs have used data and the support of stakeholders and government leaders to demonstrate that investments in recycling market development provide positive environmental, economic, and social outcomes to states and local regions. This collaboration is essential to their success. Businesses engaged in market development range from those that collect, sort, and process materials to raw materials providers and converters that influence end-of-life options and the brands using the materials to create new products and packaging. Accordingly, those business perspectives should be represented among program staff to better understand the drivers behind a recycling program. Smaller staff can build external partnerships with industry representatives to gain this crucial expertise. The same can be said for stakeholders’ expectations of these programs: Collaborative discussions with the industry — including brand owner companies — are necessary to prioritize interests and systematically leverage additional support. In the past, we have seen a tendency for state partnerships to redirect concerns toward supply-side issues of municipal collection and contamination. We need industry stakeholders to ensure the primary purpose of new recycling market programs is to create demand for recycled content. Many packaging stakeholders do feel a humanitarian desire to diminish or eliminate waste to improve our environment and protect its natural beauty and resources for future generations, and their drive toward sustainable solutions reflects this.

While many factors affect the advancement of packaging recovery, market development is integral to creating the demand-pull we need to increase recovery and communicate to consumers the value of repurposing and remanufacturing packaging materials.

The programs of the 1990s focused mostly on environmental aspects with a minor focus on job creation, but now even the EPA has recognized the incredible economic value recycling also creates for states. Last year, it released its first study on the economic impact of recycling.

The report shows that in 2012, “recycling and reuse activities in the US accounted for 681,000 jobs, $37.8 billion in wages, and $5.5 billion in tax revenues.”

As we seek to advance packaging circularity and respond to the increased public attention on plastics, market development will be essential to help our industry advance its goals; our support and engagement in this effort can help our country re-emerge from the COVID-19 pandemic stronger and cleaner.

There is No Simple Solution, but Brands are acting, and companies are taking several different approaches to sustainable packaging solutions. According to a survey, most companies prefer to improve their current packaging formats, rather than develop entirely new ones. New solutions, such as innovative materials, require increased investments in time, resources, and knowledge. By improving the sustainability profile of their current packaging, enterprises may hope to make their current offerings and processes more efficient while avoiding a complete overhaul of their current systems. Just over 60 percent of participants are aiming to make their current packaging options more recyclable while 55 percent are redesigning their packages to reduce weight. When it comes to implementing sustainable solutions, we have a problem. But by “we,” I don’t just mean brands and packaging solutions companies; real progress lies somewhere in a collaboration between social science, environmental science, civic engineering, politics, and corporate and consumer responsibility. The additional resources and expertise that partners provide can help achieve any goal, but they will be more than just helpful in creating sustainable packaging solutions; they will be an absolute necessity. No single entity can tackle this problem by itself; developing the circular economy will require cooperation among solution providers, municipalities, retailers, NGOs, and individual consumers.

This issue has a diverse set of variables that flux from one geography to another. Europe has the most mature and efficient recycling system in the world and sets the global standard in terms of recycling and composting access. Many European governments encourage recycling by driving accessibility, adequate funding, financial incentives, and performance targets for local governments. But they only represent a fraction of the global population. China, Vietnam, the Philippines, and Indonesia are the top sources of plastic garbage reaching the ocean. This problem will not be solved without global partnerships spanning the entire value chain. The road to sustainability is not straightforward, simple, or quick. Everyone has a role to play. It is a massive undertaking that will only be resolved by bridging various industries, civic and organizational leaders, and consumers. It will require an overhaul and improvement of the current manufacturing and packaging processes, recycling infrastructure, government services, retail outlets, and more. Creating sustainable packaging solutions will not be easy, but many brands have already voiced and begun to act on public commitments to sustainability. They are ready to face the challenges and do their part in ensuring optimal health for every living being – humans, animals, and plants – and providing a brighter, safer future for the planet.

Brands and retailers have historically relied on a trusted set of tools and tactics to control the customer experience. Brands leveraged a steady drumbeat of advertisements and designed attractive packaging while retailers arranged planograms and retail shelves to guide customers’ eyes and wallets. But as constant connectivity, social media, and algorithmic decision-making exert their influence on all aspects of our lives, they inevitably come to influence the consumer-packaged goods (CPG) space.

How will this impact the future of packaging?

The relationship between brands and consumers will never be the same, and the recipe for success is changing. This is as much an opportunity as a challenge, and I believe that with smart use of the Internet of Things (IoT), CPG brands can take control of the future of packaging in a connected world. Packaging innovation is here. Outside of the traditional retail model, brands are exploring connected packaging as an avenue to forge a direct relationship with consumers inside the home. Sensors let the brands know when a product is running low and how consumers are using the product in their everyday lives. This newfound stream of first-party CPG data enables capabilities like auto-replenishment that provide more convenience, ease, and efficiency in consumers’ lives.

Steve Jobs famously wore the same outfit every day: a black turtleneck, blue jeans, and New Balance sneakers. Similarly, Mark Zuckerberg often wears a gray t-shirt and jeans. This self-imposed uniform was not born out of a lack of fashion sense or angst over wearing the wrong thing. These CEOs pre-select their outfits because people can only make so many decisions a day, and a lot of brainpower is wasted on trivial matters, such as should I sleep another 15 minutes? Should I go to the gym? What should I eat for lunch?

People are constantly looking for ways to reduce decision fatigue and streamline their lives. Although they may not pre-select the same outfit every day, auto-replenishment services enabled by connected packaging can eliminate the unnecessary headache it takes to, say, pick toilet paper. Charmin or Quilted Northern? “Ultra-Plush” or “Soft and Strong”? Twelve rolls or 24? This not only relieves the burden on cognitive overhead for consumers, but it also helps brands secure consumer loyalty. If the consumer chooses to forgo the decision-making process, then there is little chance that they will end up brand-switching. However, this does put the brands into a race to adopt auto-replenishment and build a user base. Early adopters will have a significant advantage over latecomers with this innovation. Everyone wants the same thing, to have products and services available to them that make life easier and help them regain the most valuable commodity of all – time. Connected packaging will shift the future of retail in many ways, both for the consumer and the brand. It will create an overall experience that helps people feel more relaxed and ensure they have what they need to help life go a little more smoothly. Sometimes good things can come in small packages. Connected packaging will lessen the shock of the heart-stopping moment when you discover your painkillers, child’s toy, or dog’s food is on a recall list, by ensuring consumers are informed as quickly as possible, rather than weeks or even months after the fact. In September 1982, seven people died after taking cyanide-laced capsules of Tylenol, Johnson & Johnson’s best-selling product, resulting from drug tampering. James Burke, the company’s CEO at the time, put customers first and decided to pull the 31 million bottles of capsules off the market. In addition to being the recall that started them all, the company reintroduced its product to the market two months later with tamper-proof packaging, which is standard for over-the-counter drug products today. The company’s management was widely praised for its management of the crisis. While the whole episode could not have been easy to manage back in 1982, if something similar were to happen today, connected packaging could help inform customers promptly, minimizing or preventing harm to people. Connected packaging will make it easier for a consumer-packaged goods (CPG) company to effectively notify consumers that they need to return a potentially dangerous product. Rather than just putting out mass marketing messages or placing a warning in a newspaper, brands can use additional channels to send targeted messages directly to impacted individuals. Not only will this help keep consumers safe and informed, but it will mitigate the risk of litigation due to injuries or worse, deaths.

This will be particularly valuable to households with young children, a prime demographic for connected packaging solutions like auto-replenishment. When products could pose danger to children, it becomes an especially sensitive issue.

In addition to the above, this article debunks the commonly cited claim that “Although consumers will say they intend to purchase sustainable products, they don’t purchase them when given the opportunity”. A recent study by NYU Stern’s Center for Sustainable Business revealed exactly the opposite: consumers do buy sustainable products, and they buy a lot of them.

There is extensive data to back this statement: researchers looked at over 40% of CPG dollar sales between 2013 and 2018 (which included over 36 categories and more than 71,000 SKUs). They found that of the CPG growth from 2013 to 2018, 50% came from sustainably marketed products. Furthermore, products with a sustainability claim on the packaging accounted for nearly $114B in sales in 2018, an increase of 29% since 2013. Most importantly, “products marketed as sustainable grew 5.6 times faster than those that were not. In more than 90% of the CPG categories, sustainability-marketed products grew faster than their conventional counterparts.” On a large scale, we see that legacy companies that are willing to pivot to more sustainable offerings, like PepsiCo and Unilever, have great success in doing so. Unilever’s “sustainable living” brands are delivering 70% of the conglomerate’s turnover growth. So, despite the long-held misconception about consumers’ sustainable purchasing habits, these findings reveal that consumers are voting with their dollars when it comes to sustainability. “The future of CPG… is sustainable.”

I would like to conclude my article by mentioning that “Teaching kids early about the importance of recycling packaging is a great lesson that pays sustainable dividends going forward” and not to forget - Packaging holds millions of possibilities – both economic and ecological, that we have not yet discovered. The Future of Sustainability is in the Hands of Entrepreneurs.

Image Reference: https://entrepreneurship.babson.edu/sustainability-entrepreneurs/

The Covid-19 pandemic brought unprecedented challenges for society and businesses in 2020. In 2021, we have a unique opportunity to build back better. I believe, sustainability is a journey, not a destination. We should always strive to go further, constantly taking new steps to improve and deliver solutions that are more sustainable and be committed to playing our part to steer our world onto a more equitable, inclusive, and sustainable path. We are made for this planet, let’s save this planet, this is what we all have in common, it is the only place in the universe known to harbor life. May the Almighty bless this Earth for generations to come, Amen!

References:

R. Kronthal-Sacco and T. Whelan, “Research on 2015-2020 IRI Purchasing Data Reveals Sustainability Drives Growth, Survives the Pandemic,” New York University School of Business, July 16, 2020.

R. Kronthal-Sacco and T. Whelan, “Research: Actually, Consumers Do Buy Sustainable Products,” Harvard Business Review, June 19, 2019.

“Green Packaging Market Size, Share & Trends Analysis Report By Type (Recycled Content, Reusable, Degradable), By Application (Food & Beverages, Healthcare), By Region, And Segment Forecasts, 2020 – 2027,” Grand View Research, Inc., December 2020.

P. Bhada-Tata and D. A. Hoornweg, “What a Waste: A Global Review of Solid Waste Management,” The World Bank, March 1, 2012.

“The CPG Industry is Committed to a More Sustainable Future,” Consumer Brands Association, https://consumerbrandsassociation.org/wp-content/uploads/2020/06/Top-25_Sustainability-Commitments.pdf.

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