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What US Produce Packagers Need to Know About the French Ban
A new French law banning the use of plastic packaging for the sale of fruits and vegetables that took effect January 2022 is being closely watched. Here’s what US and other packaging executives and companies should consider as this legislation and other climate change regulations eventually hit home.
Image courtesy of Imaginechina Limited / Alamy Stock Photo
2022 is expected to bring about new policy, governance, and regulations focused on climate change and environmental issues. The first one we are seeing is a controversial law in France banning the use of plastic packaging for the sale of fruits and vegetables.
Thirty different varieties of fruits and vegetables are banned from being wrapped in plastic, while larger packages along with chopped or processed fruit are exempt.
It is estimated that more than a third of all fruits and vegetable products in France are sold in plastic wrapping, and this new measure — expected to eliminate more than a billion wrappings per year — demonstrates the country’s commitment to reduce the environmental impact of waste, with an eye toward phasing out single-use plastics by 2040.
Consumer packaged goods (CPG) companies — particularly large US-based organizations such as PepsiCo, Coca-Cola, P&G, and others — have fervently promoted their efforts and commitments to move away from plastic packaging. These companies are joined by governments, sustainability pundits, and concerned global citizens, as well as global and domestic packaging executives — all of whom are closely watching this new law, and what it means for them and the evolving nature of consumer behavior.
While France has been lauded for its progressive stance, some industry leaders have bemoaned the short notice and the speed at which the ban went into effect.
Given the debate that’s being waged in France and across the globe when it comes to the environment and sustainability practices, brand-owner companies and their respective packaging executives can’t afford to stand still while the world changes around them.
Packaging and marketing executives should consider four key issues as they monitor the impact of this new French law, and prepare for its eventual migration to their respective markets:
1. Determine what new packaging will be acceptable.
Whether we’re steeped in the packaging industry or we are the primary shopper in our household who picks out fruits and vegetables, we can all agree that people “like what they like.” We like buying tomatoes and basil and potatoes a certain way, and that could be based on our eye and nose for freshness, the way the produce is displayed and merchandised, or merely due to our buying habits built up over time.
Companies and executives should not only keep an eye on trends and data coming out of France, but also use this opportunity to double down on market research. Conduct focus groups with audiences — grocers and consumers — to better understand what is most and least appealing when it comes to new forms of packaging. Understanding data today that points to how new sustainable packaging can keep the product clean and hygienic, and maintain its integrity and avoid damage throughout the supply chain, will help us better determine what the optimal solution will be for future sustainable packaging and whether or not it has a dramatic impact on revenue and bottom line.
In short, trust your customers to tell you what they’ll tolerate, or hopefully embrace.
2. Talk to your suppliers, like, now.
Fundamentally changing your packaging from the ground up is not an overnight equation. France, like most of Europe, has been carefully and aggressively charting a roadmap to eliminate a variety of plastic packages and wrappings. This process began nearly three years ago, and undoubtedly for most fruit and vegetable companies this may have triggered serious conversations with packaging vendors and experts to learn about packaging alternatives and specific changes necessary for the picking, storing, packing, and shipping process. Having lengthy discussions now, and conducting scenario planning, with your packaging partners will better inform the lead time that will be needed to make the change to a biodegradable alternative to plastic packaging. The issues surrounding potential alternatives to plastic range from the obvious: how much does new packaging cost; to the extremely complex: whether or not sugar cane fibers will be more effective in the long run vs. wood pulp fibers.
3. Do the math (all of it).
Change to biodegradable alternative to plastics is coming, whether that’s driven by environment friendly legislation or environmentalists. Because of that, companies should understand every cost associated with what a change in packaging will mean to its organization’s financials, both globally and domestically. Costs should factor in short term issues such as cost per kilo/pound, as well as the impact new packaging could have on more or less shelf space for stocking purposes.
Meanwhile, in the mid and long-term, what might rising interest rates mean for new packaging? It could mean that now is a good time to invest in packaging research and development (R&D) to better position yourself for packaging improvements that could lead to a stronger sales and eventually stronger bottom line.
Lastly, some states in the US may provide tax incentives for companies that offer environmentally friendly packaging solutions. All pros and cons need to be thoroughly explored, along with cost implications, as far in advance as possible. This includes the potential to pass along some new packaging costs directly to Millennials and Gen Z consumers who are more open-minded to pay a premium for products associated with sustainability.
4. Leverage packaging innovation for reputational growth.
There have been great innovations in fresh produce to sustain and improve shelf life, and the same opportunity may exist with new packaging. Companies should look at the new French law as an opportunity to ramp up their own R&D, specifically to invest in and explore what packaging options will work best for them, their customers, and respective consumers. Savvy companies could claim “first-mover” status with new innovations; and leverage new data and policies to help build customer relationships and corporate reputation.
We’re still early in this process, but there is an opportunity for future packaging decisions to help determine which companies and leaders will emerge as winners and losers, when it comes to being prepared. Packaging decisions in the US could become more complicated, with different laws in different states presenting companies with difficult and potential costly options. Managing multiple supply chains with multiple packaging suppliers, all while staying compliant, may reflect a new normal.
France and its new law has put the packaging industry on notice, creating more enforceable levels of transparency and accountability.
Packaging executives should not only just watch what’s happening in France, but also be proactive and become engaged in this conversation.
About the Author(s)
Vice President, GEP
As a Vice President at GEP, a leading provider of procurement and supply chain solutions to Fortune 500 companies, Darren Lynch’s focus is on operational effectiveness and efficiency, helping clients with their operating model, structure, value chain, supply chain, strategic cost management, and process excellence across multiple industries, including banking, aerospace, telecoms, healthcare, government, utilities, consumer goods, life sciences and retail.
As a Director at GEP, a leading provider of procurement and supply chain solutions to Fortune 500 companies, James Peach is a highly experienced and versatile interim procurement consultant with 21 years of extensive sector and deep end-to-end functional procurement experience specializing in procurement transformation and capability development, complex strategic sourcing projects, and procurement project management.
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