CONCENTRATED laundry detergents led the charge toward greater supply chain efficiency and made the most of more limited shelf space in 2007. Packaged in a smaller vessel but still packing the same punch, the category became the darling of Wal-Mart and the focus of one of the retailer's far-reaching directives.
In October, the industry giant began replacing all conventional liquid laundry detergents in its Wal-Mart and Sam's Club stores with concentrated formulas in smaller bottles. With its launch of the All-brand “Small & Mighty” 32-ounce bottle that contains enough detergent to clean 32 loads, Unilever became the first big marketer to tap into the concentrated laundry detergent trend in 2005. One in four bottles of liquid laundry detergent purchased in the U.S. is sold by Wal-Mart. The retailer noted that even small changes to packaging can have a big impact on shelf space, the use of materials, manufacturing, shipping containers, trucks, storage, refrigeration, waste and the energy used for production and transportation.
The mandate was Wal-Mart's first to zero in on a specific category since it handed its packaging scorecard down to suppliers in February. The tool allows manufacturers to evaluate themselves, relative to their peers, in the areas of packaging innovation, energy efficiency and transportation, among other things.
Beginning sometime in the new year, Wal-Mart will take trading partners' rankings into consideration when making sourcing decisions. The retailer predicts that a reduction of 5% of the packaging from within its own supply chain by 2013 will result from its plan. It also anticipates a collective savings of nearly $11 billion.
In addition to reformulating products to reduce packaging size, manufacturers like General Mills made improvements to their product-to-packaging ratio without changing their recipes. Packages of Hamburger Helper, for instance, were reduced 20% in size without changing product quantity. The result is 500 fewer distribution trucks on the road per year, according to General Mills spokeswoman Kirstie Foster. The manufacturer also reduced the amount of metal used in Progresso soup cans and the case sizes required for its Pop Secret microwave popcorn.