By Paula Rosenblum, Managing Partner
November 3, 2009
Last week I had the opportunity to attend and speak at VCF’s VisionSync conference in Tampa, Florida. The VCF (Vendor Compliance Federation) works to foster mutually profitable relationships across the extended retail industry. In other words, it seeks to reduce deductions and improve order and merchandise quality across the value chain.
I was able to attend a speech by June Anderson, partner at PKG (Packaging Knowledge Group, LLC). Ms. Anderson discussed ways brand managers can improve their cost-structure while being more environmentally friendly.
Retailers know there are opportunities to be had in packaging. In RSR’s 2007 Sustainability benchmark, “What Can Green Do for You?” retailers identified it as their number one brand-building AND cost-savings opportunity, particularly for their private label products. While the economy drove cost-savings in the store to the top of the opportunity list in this year's benchmark, we know over the long-term, packaging will come back to the forefront.
As it turns out (and as Ms. Anderson pointed out), good packaging is not just about protecting the environment from packaging materials. The packaging must contain the product, and it must also protect the product from the environment. She identified six steps to achieving “sustainable packaging” – which also make sound financial sense. And, in some cases, she showed how the road to hell can be paved with the best green intentions.
Step 1: Eliminate Materials – Ms. Anderson used two very clever examples to illustrate this point. She showed a lightweight HP Notebook computer that is sold in a messenger bag. On the cost savings side, consumer packaging was reduced by 97%. On the environmental side, overall packaging waste was reduced by 65% and the messenger bag was made from 100% recycled materials.
Step 2: Change Materials – My favorite example cited here was made by Italy-based Leoplast Group, which supplied Cargo Cosmetics with VegetalPlastic for one of its make-up lines. Not only was the packaging made from PLA, a product that saves 60% of fossil fuels compared with traditional plastic and reduces greenhouse gases by 90%, but the carton is made out of recycle paper infused with wildflower seeds. Moisten and toss away, or just toss away and let the rains come, and wildflowers will grow. Not only efficient, but cool! A real brand-builder.
Step 3: Reduce Materials – By now we’re all familiar with the lightweight beverage bottles used for everything from bottled water to soda. I confess that I thought this was a bit of greenwashing, but it turns out that it really does add efficiency. Coca Cola’s “lightweighting process” has allowed it to improve its yield on plastic it uses while saving costs on each bottle.
Step 4: Improve Cube Utilization – Retailers have talked about improving cube utilization in trucks and containers for as long as I’ve been in the business. But things have really taken some twists and turns since sustainability initiatives began. Ms. Anderson showed us photos of watermelons grown in boxes so they would be square and easier to stack (ummmm, I don’t think these will be hot sellers), and we also saw the square milk jugs that first hit the market at Sam’s Club and have been spreading around the industry. While cube utilization has improved, customers have literally been crying over split milk – the jugs are VERY difficult to pour from, and we may have lost as much in milk as we saved in packaging costs. On the flip side, the United States Postal Service is putting its money where its mouth is: as long as a product is within a rather broad weight range, it is now charging by package size, irrespective of distance to be traveled (within the US) or product weight. It just has to fit in the box.
Step 5: Change Energy Sources – Ah, if this was as easily done as it is said. Yet, we did see some real examples. For one, Origins cosmetics uses paperboard for its outer packaging. This includes 100% renewable energy for paper production, converting and printing. More information on sustainable packaging guidelines can be found here.
Step 6: Change the Product – While this sounds vaguely absurd on the surface, we have a very clear example of a win-win in laundry products. Concentrated laundry detergent has three times less water in it than traditional varieties. That means, a 32 ounce bottle will wash 32 loads, vs. the traditional 100 ounce bottle required to wash the same amount. A win for manufacturers, as shipping costs are cut (200% more product shipped per truck), corrugated usage is decreased significantly, and for the retailer, the product uses only half the shelf-space. In fact, Walmart switched its entire laundry category to concentrates in May 2008.
Sometimes the sustainability debate borders on religious, but beyond those arguments, one thing is clear. When it comes to packaging, sustainability also results in sustainable savings. My thanks go to Ms. Anderson for shedding some light on this important subject.
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