Sustainability has been a hot topic in the CPG packaging industry since the 90s when mass retailers started to respond to consumer pressure to develop programs around source reduction and recycled content.
Manufacturers which supply the retailers have pushed machine and materials suppliers to provide a range of solutions that enable them to comply with incremental source reduction targets. Suppliers have delivered, and manufacturers have consistently met or exceeded the "score card" targets set by major retailers and industry organizations.
Trade associations have also joined the discussion. PMMI's recent Earth Day infographic, for instance, illustrates the emphasis on the topic.
Replace & Eliminate
Most of the progress has been focused on replacing bulky materials with alternatives. Examples include:
- down gauging films
- replacing glass with pouches
- thinning plastic bottle walls
- increasing post consumer recycled content in cases & cartons
- replacing corrugated cases with shrink wrapped trays; replacing trays with pads; and eventually eliminating many pads as shrink wrap technology advanced to directly wrap multi-unit packs
- improved strength & durability of primary packaging to reduce need for secondary packaging simply for distribution
Each of these incremental steps has taken substantial packaging volume out of the waste stream. Technology has enabled these changes in fascinating ways. Pouch technology; multi-layer thin films with barrier properties; and paper recycling have all advanced in support of these source reduction & CPG sustainability goals.
Machine technology has also contributed - enabling the primary, secondary and tertiary packaging in more efficient ways. Case erectors that are more forgiving of inherent irregularities in recycled corrugated, for instance, have not only offset operational impacts, but have improved overall efficiency and reduced energy use - even with a tougher material challenge.
The biggest challenge has been to preserve, or even enhance quality and performance even as the source reduction is proceeding.
That requires a net impact assessment of the entire primary and distribution packaging profile.
For instance, as water bottle walls have been drawn ever thinner, dosing of nitrogen has allowed bottlers to eliminate large amounts of corrugated by substituting the strength of bottles rigid from internal pressure for the supporting structure of a case exoskeleton. However, depending on the coefficient of friction (CoF) of the shrink wrapping film, in some cases the palletizing & pallet wrapping process have been impacted. It's not unusual to find that more stretch film (measured in total ounces required to securely wrap a load to maintain the required containment force) is required to ship the loads consistently.
When viewed in terms of total pounds or cubic feet there's still a reduction. It's a source reduction and sustainability success. But, it's important to recognize the net impact to ensure that goals are met in real terms, not simply nominal progress in one area.
To take it a step further, it's not just a function of packaging to finish product and ship it - but rather movement through the supply chain to the point of retail purchase and consumption.
Not just "net packaging"
Here's where companies and consumers need to be particularly attentive to ensure that sustainability targets are met. Packaging materials are just one element to consider. A far bigger component of the supply chain waste stream is unsalable product itself.
In other words, if a whole pallet's worth of product arrives at the distribution center as individual boxes scattered around the back of the truck it is often determined to be unsalable. That could be due to actual aesthetic damage or concerns about package integrity. Sometimes it's a function of hyper efficient distribution best practices which simply pull non-conforming product out rather than slow down operations to manually inspect and manage.
This is the dirty secret of some sustainability efforts - that sometimes the sustainability changes that are high profile in manufacturing facilities necessitate some partially offsetting changes. If those changes aren't made, then the volume of unsalable product entering the waste stream can absolutely dwarf the volume that's believed to have been saved.
While net packaging material sustainability shows progress, in some cases the gross impact is actually negative.
Is it net positive or negative?
Now things start to get a bit confusing.
Tracking impacts throughout the supply chain and distribution channels is a really, really complicated process...for many reasons.
The simplest is that the feedback loop isn't easy to maintain. When product is received in non-conforming condition, how is that reported? To whom? Often it doesn't make it back to the production, package engineering and materials procurement teams with enough detail to attribute causes. It may not even make it back to those folks at all. So the production teams may simply continue with what they believe are best practices....and contribute to a growing volume of unsalable product entering the waste stream.
If they do receive some statistics, they almost certainly lack the detail to do a required root cause analysis. For instance?
- Did product originally shift off a pallet leading to failure on one edge?
- Were cases not properly column stacked?
- Was there another load stacked on top?
- Did high humidity during an extended stop in a distribution center compromise corrugated integrity?
- Is the stretch wrap pattern that's codified in a corporate spec adequate to meet the requirements of down gauged film and new retailer distribution configurations?
These are simple examples - you can easily imagine a host of factors yourself. The point is that even if damage is reported, there's rarely enough detail to define the problem accurately enough to solve it. So the net sustainability impact of packaging changes may actually be negative.
Who owns the damage? Follow the dollars
That's where the trail goes cold, and probably why this remains a taboo topic in many sustainability discussions. (This is where the sustainability 'bodies are buried'!)
Production hits their numbers. The sales team has the score card progress they need. Logistics moves product efficiently through the supply chain. Damaged / unsalable product is within "industry norms" and typically addressed through budgeted sales allowances. In other words, in many companies there's no department which "owns" the "cost" of the unsalable products that result from efforts to reduce packaging in the waste stream. While the company as a whole could potentially save a substantial portion of the credits they write for the unsalable products, with no department to benefit, no department champions the effort.
What's the bottom line?
- Sustainability and source reduction will remain high priorities with manufacturers, retailers and consumers - and therefore with industry suppliers of machines and materials
- Projects must be evaluated holistically to ensure that compensatory changes to ensure proper delivery are considered
- CPG companies could potentially improve profits by understanding and addressing the implications of packaging source reduction beyond the factory walls
- All stakeholders in the sustainability debate could score a huge victory by reducing the flow of unsalable materials into the waste stream - a flow which in many cases may actually outweigh the sustainability successes which contribute to them
Infographic Credit: PMMI
This post was published on June 16, 2016 and updated on January 3, 2020.