'Reduce' gains as cost concerns rise

PD 2013 Sutainable Packaging Study Chart 1

This cost pressure is one of the reasons "Reduce" has risen to the top of the list (see chart 3). When asked "If your company has specific sustainability targets, what is their focus?"—the top three answers start with "Reduce:"

1. Reduce waste, 57 percent
2. Reduce amount of packaging materials (source reduction), 41 percent
3. Reduce energy consumption, 40 percent

Focusing on reducing and actually being able to do it are two different things. Many feel they have light-weighted their packaging as much as possible. How successful will companies be in this area, moving forward? "Can't downgauge for source reduction and cost savings in parallel any further," says this one survey respondent. Another one writes, "The challenge [is] to design packaging [that] uses less material while performing at the same levels."

Reducing isn't the only task packaging professionals are faced with. When asked "What new challenges is your company encountering from a sustainable packaging perspective?"—a new survey question this year—many respondents cite the same ones we've seen already: cost and performance.

PD 2013 Sutainable Packaging Study Chart 2

"Pricing is the main issue," this one respondent says. "Customers will not accept cost increases for more expensive sustainable materials."

"Cost vs. benefit," writes someone else.

"Cost, cost, cost. Everyone wants it, but no one will pay for it," says this respondent.

A fourth respondent answers, "The ability to source and replace current packaging materials to sustainable packaging without increased cost."

But there were other—revealing—answers to the question of new challenges. One of the most interesting verbatim replies was, "None right now, other problems taking lead."

And here are reminders that packaging isn't created in a vacuum: "Finding composters and recycling companies that will take sustainable packaging (non-food)." And "It's the chicken and egg concept. Suppliers want orders from customers to make innovative materials and customers want suppliers to make innovative materials that are available for them to order."

PD 2013 Sutainable Packaging Study Chart 3

A few respondents not only identify a problem, they offer solutions: "Get another view on packaging: Allow continuous improvement instead of expecting that an established packaging system wouldn't be changed in the next two decades." And "We are moving from being just a user of packaging, to a manufacturer of it as well by bringing blow moulding of bottles in house."

For this year's survey, we asked a number of new questions and added a few selections to the choices, specifically about sustainable packaging and innovation, extended producer responsibility (EPR) and life-cycle analysis (LCA).

PD 2013 Sutainable Packaging Study Chart 4

Innovation
When asked "Does sustainability limit packaging innovation in other areas (such as functionality and design)?", 40 percent of participants answered "Sometimes" and 23 percent checked "Yes"—together clearly the majority at 63 percent. But 37 percent said "No" (see chart 1).

Cost, again, showed up in many verbatim comments to our follow-up: "How does sustainability limit packaging innovation in other areas?"

One survey respondent writes, "Not as flexible to required needs. Aka material limitations. Cost is especially a large issue."

Just in case we might miss that critical concern, this respondent reiterates, "Cost, cost, cost."

Another one points out, "Packaging has become so light weight that it is becoming harder to make further reductions without compromising strength and performance."

Performance still shows up as a concern in the verbatim commits. As this survey taker says, "Insufficient property performance for manufacturing efficiencies, impact to shelf life [and] material usage efficiency" limit innovation.

PD 2013 Sutainable Packaging Study Chart 5

Or this one, who writes, "Sustainable materials do not always have the properties needed for specific applications."

Balancing material selection with good design and functionality is not easy, as this respondent explains: "The lack of recyclability of some materials causes designers to stay away from them in their design, such as foils and certain plastics." And this participant says, "Optimized packaging often limits design creativity."

A focus in one area often means something else has to give, as this survey participant points out: "Investment of time and resources into sustainability limits time and resources for functionality and design."

And sometimes circumstances are outside their control: 

• "Consumer expectations for design are at cross purposes with sustainability options." For example, as this other respondent says, "Something which could be an innovation for ease of use or single serve could require more material to package."

• "Due to strict regulations of the nature of the business, it is hard to make changes to processes, and it takes a very long time to implement."

PD 2013 Sutainable Packaging Study Chart 6

EPR
In the last year, we've heard rumblings about extended producer responsibility taking on more of a role in the U.S. Some companies have already started to voluntarily implement their own programs, including New Belgium Brewing (www.packagingdigest.com/NewBelgium). In our 2012 Sustainable Packaging Study, 72 percent of respondents said EPR was going to be a "Very" or "Somewhat" significant issue for packaging in the next five years.

PD 2013 Sutainable Packaging Study Chart 7

Will EPR be a big issue in the U.S. or not? Should it influence packaging design? We'll continue to monitor this issue throughout 2014, including any regulatory activity.

LCA
Fewer respondents this year vs last (27 percent vs 39) are using life-cycle analysis to evaluate their packaging for sustainability (see chart 8a). If LCA is used, our study shows that an internal LCA professional performs the studies more than anyone else (47 percent) but a packaging engineer/designer is often tapped for the task (38 percent). (See chart 8b.)

It remains to be seen if packaging people are qualified enough (more on training later) but other factors weigh in, as this participant notes: "There are various tools out there that do some remarkable work but have limited datasets and functionality. It is time these tools come together for the good of the industry. We prefer streamlined tools over [GaBi] and [SimaPro], which require full LCA consultants as opposed to people in packaging to use."

What's interesting, though, is how companies put this LCA data to use-or don't. We asked "To what end are the data applied?" (see table 8c). The top answer, at 63 percent, is "To understand environmental profile of a product and/or package." But this knowledge sanctions action less than half the time. Only 43 percent of respondents say LCA data are applied "To inform design improvement."

PD 2013 Sutainable Packaging Study Chart 8

Other notable results
Our 32-question survey returned many other notable results and/or shifts in packaging sustainability. Among them:

• When asked, "Over the next three (3) years, which of the following business factors will have the greatest impact on the strategic direction of your company?" (see chart 2). "Sustainability" dropped from fourth place in 2012 (at 24 percent) to seventh this year (at 22 percent). It's still important, but companies are feeling the heat from competition, mostly local. "Gaining market share" came in second at 25 percent behind "Managing costs" at 31 percent. And "Globalization" saw the deepest drop in percentage points in the list this year, from 15 percent in 2012 to 10 percent in 2013.

• "Companywide" dropped steeply from 14 percent in 2012 to just 2 percent this year for the question "At what level is participation in sustainable products being driven inside your company?" Both "By departments" and "Individual champions" moved up this year, from 32 percent to 37 percent. Packaging is the department more often than not driving participation in product sustainability at a company, coming in at the top of the list at 56 percent (see chart 6).

• While sustainable technologies are still important, the people putting them to use may be more so, especially moving forward. "More education, training" tied for top position (with "More efficient processes"—a new category for 2013) at 46 percent for the question "To best achieve your company's sustainability goals, what developments are most needed?" (see chart 5). 

Additionally, "Training" showed the sharpest percentage increase—up 5 points from 2012—for the question "What do you think are the biggest challenges to making your current packaging process more sustainable?" (see chart 4). In 2012, "Training" ranked 12th of 14 categories; in 2013, it has moved up to 7th. "Finding qualified staff" also saw an increase, but it still ranks low in the list (13th).

• In this same chart 4 ("What do you think are the biggest challenges to making your current packaging process more sustainable?"), "Lack of standards/reporting/metrics" dropped a whopping 10 percentage points and ranks 9th this year, compared to 5th place last year. So it looks like the industry has made progress in this regard.

• We added two new categories to the question "What criteria does your company use to evaluate sustainable packaging?"—and they both scored well (see chart 9). One, "Minimizing/eliminating product waste" tied for the top category (with "Recycled content") at 47 percent. The other new category, "Sustainably sourced materials," came in third at 36 percent.

"Design for end-of-life (recycling, composting or reuse)" was the only selection in the list that saw an increase this year, at 33 percent, up from 29 percent in 2012. Looks like some in the industry will be ready for EPR if/when it comes after all!

This criteria-for-evaluation list saw a number of "Other" write-ins. Take a guess...yep, "Costs."

PD 2013 Sutainable Packaging Study Chart 9

• While "Reduce waste" topped the list of "If your company has specific sustainability targets, what is their focus?" (see chart 3), one of the ways to do this—"Extend product shelf life"—was near the bottom at just 19 percent. And another solution—"Improve product evacuation"—was even lower at just 6 percent. Perhaps these will become more of a focus in the future.

But a real eye-opener to the question "If your company has specific sustainability targets, what is their focus?" was a succinct write-in answer: "Cost savings only."

And that emphasis on costs brings us full circle—a closed loop!

We've packaged the full results into a 60+-page PDF that is available for $149. Send an e-mail to [email protected] if you want to order. We will then direct you to a site where you can download your copy. Thank you!

Methodology
Packaging Digest's 2013 Sustainable Packaging Study was conducted via an online survey in October. Invitations to participate in the survey were e-mailed to a random sample of packaging industry decision-makers selected from the subscriber databases of Packaging Digest and its sister publication Pharmaceutical & Medical Packaging News. The survey link was also shared via social media to Packaging Digest's Twitter followers and our group on LinkedIn.

Findings are based on information from 889 qualified returns from:

Consumer Packaged Goods companies (33 percent),

Packaging Material Manufacturers (14 percent),

Packaging Services (13 percent),

Packaging Converters (8 percent),

Retailers/Wholesalers (11 percent),

Packaging Machinery Manufacturers (6 percent),

Transport/Logistics (3 percent),

Industrial Manufacturing/B2B (4 percent) and

Other / None (8 percent).

A piece of the larger pie
Earlier this year, Packaging Digest interviewed Jim Hanna, director, environmental impact, Starbucks Coffee Co. (www.packagingdigest.com/HannaGateway). One of Hanna's main points was that packaging gets a lot of attention from a sustainability point of view because it's most visible to consumers. But packaging is often a small part of a company's total environmental impact compared to other things, such as product manufacturing/processing.

To get some ideas on how to address this, we added this open-ended question to our 2013 survey: "How can companies communicate their broader sustainable strategy to customers without making it seem like they are trying to deceitfully divert attention away from packaging?"

A number of respondents offer good ideas:

"Talk about sustainability holistically, product and packaging together."

"Include packaging as a component of the overall sustainability message. Don't ignore it, it is a vital part of the sustainability equation, but it isn't the only part."

"I disagree with your statement. Product packaging contributes more than ‘only a small percentage...'"
"Carbon footprint seems to be the best way."

"Emphasize that functionality in [for example] reducing food waste by effective packaging is much more important in increasing overall sustainability than minimizing [the] amount of packaging."

"Energy and water is a bigger issue in food/confection processing. We have put in a solar energy system and have never told anyone about it, but will change that after reading this survey."

"Joint industry initiatives may help to educate consumers on facts about sustainability."

"Usually the customer who is concerned with sustainability will turn to the internet for this information. The company's website should contain this info and the company would also do well to get some PR in the more eco-conscious publications."

"Implement the changes no matter."

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