CPG brands have come a distance in minimizing wasteful ways, but there is no finish line in sustainability. Materials can be improved; packages can become smarter; brand communication can be clearer — all to the benefit of bottom lines and customer relations.
BRANDPACKAGING talks with Packaging Technology Integrated Solutions’ Jennifer McCracken, director of sustainability, and Todd Bukowski, senior packaging consultant, about what HAVI Global Solutions (www.havigs.com) is seeing in sustainability and how brands can take green practices and packaging further.
BRANDPACKAGING (BP): Brands have been going greener for years, and today, it’s not as newsworthy because it’s expected. Do consumers care more or less about sustainability now?
JENNIFER MCCRACKEN (JM): In a word, “more.” In its 13th annual consumer report, “The State of Sustainability in America 2015: Trends & Opportunities,” consumer research consultancy NMI notes that “Sustainability is not a trend. It is becoming a cultural shift. All organizations … will need to realize that sustainability is not just a desired activity but a necessary strategy.”
With packaging, a natural look, recycled content and recyclability post-use are important, but what are most essential to the majority of consumers are performance and price. If a package doesn’t perform, or if it is more expensive than alternatives, the majority of consumers are not likely to purchase, even if it is the more sustainable option.
TODD BUKOWSKI (TB): I think there is more general awareness of sustainability and green brands among consumers. Increasingly, consumers are becoming more concerned about social welfare and what is better for our planet. They may not call it sustainability, per se, but that is where their thinking is at. Still, most consumers are not willing to trade off convenience for sustainability. I think you see sustainability really resonating with about 15 percent to 25 percent of U.S. consumers, or the LOHAS (Lifestyles of Health and Sustainability) group.
Sustainability is a bigger issue for brand owners, retailers, investors and NGOs. It is becoming a baseline that companies need to consider, and I think we’re seeing brand owners and retailers further ahead than consumers on this issue. They are looking to get ahead of government regulations and are on the forefront of the sustainability trend, focusing on this before their consumers even get there. Interestingly, and in keeping with this scenario, when Tide introduced its more sustainable cold-water formula, the brand focused on cost savings for the consumer as opposed to the environmental benefits of washing in cold water.
BP: What are some of the latest trends in sustainable packaging?
JM: I think we’re seeing trends that could be grouped into five main categories:
1. Supply chain traceability and transparency: We’re certainly seeing this in raw materials sourcing with fiber- or paper-based packaging and businesses and consumers alike wanting to know how materials were sourced. They want traceability and transparency all the way back to the forest and assurances that logging was managed responsibly. There also needs to be transparency into the chemicals in packaging. Consumers want to know that what they are regularly coming in contact with is safe. In some instances, brands are being asked by consumers to ensure packaging safety beyond required regulations.
2. Collaboration: We’re seeing brands collaborating with a host of different partners; they realize the issues that need to be addressed are often bigger than they can tackle on their own. To move the needle in sustainability and have an impact, they are partnering with one another. We saw this when Coca-Cola and Pepsi collaborated to reduce sweeteners in their drinks, and in packaging, we see it in the Closed Loop Fund recycling partnership between brands and government to try to increase recycling of used packaging.
3. Wanting to move farther faster: Many brands set 2020 sustainability goals. That horizon is well within view, so we’re seeing brands assessing progress and taking steps to ensure they’re still on track to achieve goals.
4. Considering packaging sustainability in the context of the product or system: This is the idea of evaluating packaging and product life cycle impacts holistically rather than separately. Initially, there was a strong industry focus on the package itself that led to size and weight reductions, but there comes a point of diminishing returns; you could potentially have a negative impact on the package’s ability to do what it was designed to do, which is protect. The industry is looking at it more holistically now and recognizing that packaging has value in the role that it plays: We can make improvements on the packaging, but we don’t want to negatively impact the product. Ultimately, that’s where the larger share of the life cycle impact is in the overall system.
5. Risk-centered strategy: This is focusing sustainability actions on those most meaningful to supporting the growth of the brand. For instance, sustainable sourcing may be essential to ensuring the company has access to the raw materials it needs to support growth plans.
TB: As a whole, companies have started to build sustainability thinking into the design phase. They may be using tools like COMPASS, PIQET or an internal tool to better understand the environmental impact of their packaging decision in the design phase. This is something we didn’t see 10, or even five, years ago. We’re seeing brands pay greater attention to food waste and the role packaging plays in extending shelf life. This will continue to grow in the next decade. Look for more active and intelligent packaging and brand owners and retailers educating consumers about the value of packaging in preventing food waste.
Another trend can be found in e-commerce packaging. Companies primarily have developed packaging for specific retail channels but typically not just for e-commerce, food and beverage in particular. Online sales are where brands can shine or struggle with regard to sustainable packaging materials and food waste. Whereas distribution of food and beverage products has traditionally has been fairly controlled — from manufacturer to distributor to store to consumers bringing the product home — shipments in response to online sales may travel in a singular case or be mixed with other products on a UPS truck. The challenge and opportunity for brands will be finding the balance where they are protecting the product and optimizing the package design.
Consumers can definitely form a perception about a company’s sustainability mission based on its packaging, and in e-commerce that is magnified. Normally, the first moment of truth (FMOT) for a consumer is when he or she interacts with a product on the store shelf. In e-commerce, however, that FMOT is when the consumer opens the shipping container and sees not only the primary packaging but also the secondary and protective packaging. That can either be a consumer delighter or dissatisfier depending on the package format. Amazon’s Frustration-Free Packaging, for instance, looks to limit the amount of packaging that the consumer sees upon opening while still providing product protection. This can have a positive impact on brand perception, limit the environmental impact of the packaging and deliver a good consumer experience while still optimizing the packaging for product protection.
BP: What’s happening in materials?
JM: We’re seeing new coatings for materials that are currently deterrents to recycling or hard to recycle. Brands also are designing with more “healthy” materials and avoiding materials that could hinder recyclability. For instance, brands are responding to consumer concerns about BPA.
TB: This is the issue of transparency again and certification of material sourcing. Consumers and brand owners want to know materials are sourced appropriately and that they are safe. We’re seeing online petitions being used to call for ingredient bans in products, and brands are responding. While it’s not as easy to know what’s in a package as there’s no “ingredient label,” it does show the power of the consumer in creating change.
We’re still seeing R&D work around bio-based materials, but low oil prices have caused some companies to pull back their investments. Businesses are investigating opportunities to replace petroleum-based material in a package with bio-based material. Coca-Cola did this with its PlantBottle, and Tetra Pak and Elopak have both started to source polyethylene that is made from renewable resources.
BP: Do consumers prefer brands take a certain path to green packaging over others?
JM: Research indicates that the things associated with sustainability that resonate most with consumers are the ones they are familiar with — terms like recyclability and recycled content or aesthetics that connote natural. Lightweighting, unfortunately, connotes cheap. Because of the challenges we saw with the water bottles that were so heavily down-gauged that functionality was compromised, consumers perceived lightweighting as a failed attempt to remove cost as opposed to crediting the manufacturer for trying to make sustainability improvements.
TB: Most consumers consider recycling something they can do that is green. They think, “this package is helping me be more sustainable,” and they feel like they’re doing their part to help the environment.
A challenge here is that consumers say they recycle more than they really do. Kelton Global recently conducted a survey and found that two-thirds of Americans report recycling on a regular basis. Yet, the EPA rate for recycling in the U.S. is at approximately 34 percent, and for most plastics, the rate is considerably lower.
Generally speaking, mainstream U.S. consumers are not willing to be inconvenienced for sustainability.
BP: People have questions on which materials are the most sustainable, as many are touted as such. How can brands help consumers answer uncertainties on the packaging?
JM: It helps to put the discussion into the context of the system: What are we asking packaging to do? There are many materials in the market, and they have different attributes that contribute to performance of the task required. The American Institute for Packaging and the Environment has been and is continuing to develop communication materials about how packaging contributes to sustainability. Brands could point to those pieces, and members can propose different things to highlight.
TB: I agree: Packaging needs to be put within the context of the system. Glass has a good recyclability story; flexible has a good carbon impact story — all have stories to tell, but they have to be put into the context of what the consumer cares about. LOHAS might be more willing to compost, but many mainstream consumers wouldn’t know what to do with a compostable bag. The How2Recycle label is a good step in the right direction in communicating to consumers what part of the package can be recycled.
JM: That’s a great point. Labeling is important to communicate what sustainability attributes are included in a package. For fiber, brands could apply an FSC (Forest Stewardship Council) label that expresses “this fiber was sourced responsibly.” If your focus is end of life, include the How2Recycle logo.
BP: What about back-end practices: water conservation, pollution reduction? Does telling consumers about these help, hinder or have no effect?
JM: These are not the first talking points I would use to grab consumers’ attention; however, information should be available for those who are most interested in discovering these details. This information may be meaningful to Millennials or others who care about these issues, and it may provide assurance to them that the brand is acting in a way consistent with the values it espouses and that align with theirs. Effectiveness of the message about back-end environmental impacts also likely depends on how those topics are tied to the product and consumers. Those impacts that are most visible to the consumer are most meaningful, as are those that are most tied to the brand mission. Example: Coca-Cola has a strategy with three tiers, one of which was focused on water stewardship. Since in vast majority its product is water, this made sense on many levels, but more so on where it located bottling plants and that they were not impeding on the communities where it built facilities.
This also bleeds into overall strategy. If you aren’t communicating this information, regardless of what the consumer thinks or is aware of, other forces can affect consumer brand perceptions. Key influencers may notice that a company is not acting in a way that is responsible and could share this insight with consumers.
BP: Do you have any closing words to share with us?
JM: Having a supply chain partner who understands the key sustainability issues related to packaging and supply chain and who can deliver solutions from source to consumer is what sets HAVI Global Solutions apart. We offer a suite of services related to packaging and sustainability that assist clients in understanding sustainability topics, developing strategy that integrates sustainability, and designing and sourcing products that reflect a company’s sustainability values.
TB: We’ve really moved past the era of low-hanging fruit. To take the next step in sustainability, it will require systems thinking from raw material suppliers all the way through the end of life providers — and ultimately linking back to the raw material suppliers in a circular economy. Collaboration between all value chain members, even competitors, will be necessary to continue driving sustainable packaging in the future.