Sustainable packaging...where are the uprights we're aiming for?

There is no question that throughout the past year sustainability was a dominant theme in the U.S. packaging arena. After many years of limited progress in truly addressing the issues of the environmental impact of packaging materials, a number of consumer product companies and retailers, led by Wal-Mart, have started to take concrete steps to do something about it. We applaud this effort. It’s driven by the concept of sustainability in its entirety, which goes well beyond packaging.

Many major corporations now have a corporate sustainability department. Sustainability covers much more than environmental issues alone. It also encompasses economic (e.g., codes of conduct, corruption, and bribery) and social (e.g., labor practices, talent attraction, and retention) issues. In fact, there is a Dow Jones Sustainability Index that rates companies on their sustainable business practices (see www.sustainability-indexes.com). One of the reasons that this index was established is that business decisions with long-term impact on overall sustainability are being made more frequently. These decisions may reduce short-term earnings for a company, especially if its competitors have not yet embarked on the journey to sustainability wholeheartedly. Today, more and more companies are realizing that by making sustainability an integral part of their business platform, they can maximize profits in the long-term. The concept is no longer about just sprucing up one’s corporate image; it’s much more fundamental than that.

So in examining the issue of packaging sustainability, it’s important to realize that packaging is not really being singled out. However, it is a very visible piece of the equation as consumers deal daily with packaging waste. We believe that one of the issues driving U.S. consumer product companies and retailers to address packaging sustainability is the concern that if the industry does not act on reducing packaging waste, governmental agencies (federal, state, and/or local) will by establishing guidelines and possibly taxes.

In Europe, Germany has had their “green dot” program for over a decade. Many other European companies have adopted their own programs to cut down on packaging waste through source reduction and recycling. Some of these programs have been more successful than others in reaching their goals (and we could write another column on that some day). However, the bottom line is that depending on the specific program, retailers and/or consumer packaged goods companies can be burdened by the requirement to collect used packages for recycling and also taxes/deposit fees. In addition, bans can and have been placed on specific materials.

Oakland, CA just passed a ban on polystyrene foam packaging (e.g., trays and clamshells) in food establishments. It went into effect on January 1, 2007. They want to encourage the use of “bio-materials” that decompose in the environment such as paperboard based products and bio-degradable plastics. To date, Oakland has not banned plastics other than polystyrene foam packaging. San Francisco has reportedly passed similar legislation that is scheduled to go into effect on June 1, 2007. Other municipalities are looking at more bans on packaging materials, and the entire area of bans and government intervention is scary to say the least.

There are different approaches to addressing packaging sustainability, each of which can be more or less favorable to specific materials. If it is determined that recycling is the preferred approach, then packaging materials such as PET, HDPE, and glass bottles and metal cans have a real advantage as these materials are already being recycled. However, if a municipality determines that degradability/compostability is the way to go, then bio-degradable materials such as PLA and paperboard products are preferred because they can be composted. (Paperboard gets tricky as it depends on the coatings used in terms of how degradable specific products are.) Another more complicated approach is some form of cradle-to-grave analysis. In this approach, one takes into account a number of factors including: energy utilization in production, green house effects, total solid waste generated, etc. We think incineration, which was widely used in the U.S. a number of years ago, could also re-enter the picture, but only after detailed assessments including a hard look at state-of-the art scrubbing and energy-generating technologies (widely used in Japan and parts of Europe).

The bottom line is that the U.S. packaging community has not yet defined the criteria for what constitutes sustainable packaging and what their preferred approach is for reducing the packaging waste stream. As an industry let’s really try and address this very complex issue before someone steps in to do it for us!

 

Barry Goldberg is president of TAPPA Group International, an international marketing consulting firm. David Johnson is managing director of Strategic Development and Effective Business Support, a UK marketing consultancy that is TAPPA’s European affiliate. TAPPA can be reached at tappa2@aol.com.

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