Retailers are moving to sustainable store-brand packaging not just for the Earth's sake, but to help minimize costs and maximize loyalty
It's been three years since Wal-Mart Stores announced its intent to squeeze inefficiencies from its supply chain by eliminating packaging waste.
By reducing packaging by 5% by 2013, it estimates it will wring a collective $11 billion in transportation, manufacturing and storage-related savings from its supply chain.
All retailers are benefiting from packaging that uses fewer and/or more sustainable materials as a result of Wal-Mart's efforts. But now some supermarkets are realizing similar benefits with their private-label lines.
Among the corporate brands tying ecological consciousness with value is A&P's Green Way.
Its concept is unique because it doesn't just focus on organic, all-natural and environmentally friendly products. In keeping with the Green Way philosophy of being “truly natural and clean in our total approach, which translates to what we eat, how we think and the connection we have with mother earth,” the impact of these items' packaging is taken just as seriously.
“Our desire is to make [packaging] 100% sustainable,” Doug Palmer, vice president for A&P's own brands, told SN at its launch in April.
Doing so is a challenge given the number of suppliers contributing to the Montvale, N.J.-based retailer's 200-item line.
It features Italian imports like frozen Organic Four Cheese Pizza ($6.99), individually stretched by hand, and Organic Fusilli pasta ($1.99).
Locally sourced products such as Organic Mild Salsa ($2.49) and Organic Sesame Ginger Vinaigrette Dressing ($2.50) — both made in New Jersey — also round out the portfolio.
Wherever possible, recycled materials or other ecologically sound means for containing items are used. But such options aren't always available.
“Not all of our suppliers have the capability, but where we can identify packages that are 100% recyclable, or packages that have some sort of bio- or photo-degradable attribute, we're going to tout that out on the package,” Palmer said. “We're pushing our suppliers hard to get there. That's got to be a key element going forward — not just for Green Way, but for [all] natural and organic products: It's not just about the product, it's also about the packaging, and what we do with it after consuming that product.”
Green Way items making packaging claims include All-Natural Multigrain Flax Flakes cereal ($2.97) packaged in a box constructed from 100% recycled paper board; All-Natural Omega-3 Eggs ($2.79) contained in cartons made from 100% reclaimed paper; and Organic Spearmint Green Tea (99 cents) bottled in 30% post-consumer recycled PCR bottles.
As is the case with most products with a packaging story to tell, real estate on Green Way items is limited, so explanations are inconspicuous. The 100% recycled paper board claim, for instance, can be easily missed on the bottom of the side panel of Green Way's cereal boxes.
Oftentimes, marketers of products packaged in vessels that have been reduced for environmental efficiency eliminate space that might have been used to a house a claim, noted Gwynne Rogers, LOHAS (lifestyles of health and sustainability) business director for the Natural Marketing Institute, Harleysville, Pa.
But new research from the NMI's 2009 LOHAS Consumer Trends Database shows that it behooves manufacturers not only fit them in, but to position them prominently.
It found that the majority of U.S. adults (66%) prefer to buy products from manufacturers that use earth friendly packaging materials.
Overpackaged consumer goods, or items that are contained in more materials than necessary, are also top of mind.
Nearly eight in 10 (79%) Americans believe products are “overpackaged.” And for 30%, overpackaging acts as a sales deterrent, with as many Americans avoiding these products by looking for something else to buy.
Concerns like these drove London-based Sainsbury's to do away with the 100% recyclable boxes used to house bags of its store-brand Rice Pops cereal, according to published reports.
“Our customers continue to tell us that excess packaging is one of their top environmental concerns,” said Sainsbury's in promotional materials. “We work hard to ensure that both the amount and type of packaging we use is appropriate.”
Rice Pops were chosen for the initial launch since they're able to maintain their small, round shape without crumbling despite the absence of a protective box.
Sainsbury's is considering expanding the idea to other cereal varieties within its line, according to reports.
Moves like these help the retailer make progress with its goal to reduce store-brand packaging by 33%, relative to sales, by 2015. Sainsbury's aims for its packaging to be reusable, recyclable or home compostable, and to use recycled materials where possible.
To that end its Taste the Difference boxed chocolates recently had their plastic trays replaced with home compostable material derived from corn starch.
Spartan Stores, Grand Rapids, Mich., is also taking steps toward environmental efficiency.
The company that owns and operates 99 supermarkets and drug stores under the Fresh Markets, Family Fare Supermarkets, Felpausch Food Centers, Glen's Markets and VG's Food and Pharmacy banners, and supplies close to 400 independent grocers, will soon introduce smaller aluminum foil boxes that contain the same amount of foil as the current packaging, according to a Grand Rapids Press report. It says the boxes will be available in 100 stores.
Moves like these are not only beneficial to Mother Nature. They also help store-brand marketers maximize profits while lowering price.
Earlier this year, Spartan replaced its private-label Styrofoam egg cartons with recyclable and biodegradable molded-fiber packaging, which is produced from old newsprint, corrugated boxes and other recycled paper.
When communicating the change to consumers, the retailer highlighted what consumers would save as a result.
“Based on last year's sales of Spartan-brand eggs, we anticipate that we will keep approximately 675,000 pounds of pulp (fiber) for the new packaging from the landfills and save consumers nearly $100,000 a year by offering this environmentally friendly packaging,” said Alan Hartline, executive vice president of merchandising for Spartan, in a statement. “This packaging makes good business sense, and is good for the environment and consumers.”
Messages like these are especially effective when delivered not just to ecologically conscious consumers, but store-brand shoppers who are, by nature, price-sensitive.
“Packaging that delivers a dual benefit, such as one that is environmentally friendly and financially responsible, is in a clear position to win,” noted Rogers.
Spartan's selection of category was also clever said Jim Hertel, managing director of Willard Bishop, Barrington, Ill. “Eggs are a category where there is extreme price sensitivity just given the trajectory of egg prices over the last few years,” he said.