Sustainable Packaging Solutions can Improve Enterprise Profitability

Packaging is about more than putting as many boxes as possible in a truck or on a shelf. Consumers notice when shippers use an oversized box stuffed full of packing peanuts to transport a small item. They resent the waste of resources with which they were unwittingly involved.

According to Nielsen research, 55 percent of global online consumers consider a brand’s social purpose before they buy.

The research shows consumers are willing to pay more for products and services from companies that are committed to a positive social and environmental impact, and packaging plays a significant role in those purchasing decisions.

With sustainable packaging solutions, enterprises can boost both the top line and bottom line by attracting eco-conscious consumers and reducing their long-term supply chain spend. For packaged food products, packaging can comprise around 10 percent of the product’s overall carbon footprint. For some items such as soft drinks, packaging may represent up to 30 percent of the carbon footprint, reports Packaging Digest.

Some of the largest shippers, including Walmart, Target, Unilever and Coca-Cola, are focusing on sustainable packaging as part of the overall strategy to lower greenhouse gas emissions.

There are four critical areas for reducing the environmental impact of packaging:

Materials: Personal-care product manufacturers have reformulated plastics to use fewer chemicals in bottles that are more recyclable and improve the overall life-cycle analysis for the entire supply chain. Sustainable plant-based packaging materials are replacing plastics made from fossil fuels.

Weight: Lightweight packaging not only reduces the amount of materials used but also the fuel used in transportation. Of course, the packaging still must protect the product from damage during shipping. For example, some beverage makers are shifting from glass bottles to recyclable plastic containers to save shipping weight. Vendors are developing cardboard and paperboard boxes and liners that are just as strong but weigh less than conventional options and free up more truck capacity.

Recyclability: Insight into the entire life cycle of packaging is leading companies to insist on recyclable materials. The demand is growing for recyclable materials, such as engineered wood pallets used that can be ground up and burned to generate electricity after they are used for exports.

Right-Sizing: As e-commerce booms and parcel carriers have implemented dimensional pricing, revamping packaging practices to optimize box size and packing materials can reduce costs and waste. Decreasing box sizes incrementally can reduce dimensional parcel shipping costs and reduce or even eliminate the need for cushioning materials. Wrapping bundles in film rather than boxes allows room for more product per pallet.

While reducing the environmental impact of packaging is a positive strategy, keep in mind that those changes may reverberate throughout the supply chain. Processes built on packaging sizes and shapes, such as manufacturing, warehousing, fulfillment and shipping, must adapt to new packaging configurations. Secondary packaging materials may need to be enhanced to replace protection formerly provided by primary packaging that has been reduced. After all, the product still must survive the journey to the end user.

Focusing on supply chain sustainability has implications throughout the organization, and missteps could lead to damaged products and unhappy customers. Transportation Insight’s division focused on indirect supply chain materials, United Sourcing Alliance, has deep experience in optimizing packaging strategies for sustainability as well as performance. Our process helps identify opportunities for sustainable packaging solutions that improve enterprise profitability and reduce an organization’s environmental impact at the same time.