Leveraging Foodservice Packaging to Drive Profitability

If there’s one thing that’s guaranteed to get consumers’ attention, it’s the image of an innocent animal suffering at the hands of human negligence.

Such is the case of the recent wave of plastic straw bans in the U.S., triggered in part by a viral video of a sea turtle with a plastic straw disturbingly lodged in its nose. Following public uproar and heightened awareness of the environmental impact caused by the overuse and improper disposal of plastic straws, local governments—including the cities of Seattle and San Francisco, as well as the state of California—are instituting new regulations restricting plastic straws at foodservice operations or altogether prohibiting them.

No doubt, the movement against plastic straws has stirred up more than just controversy. While government intervention poses new challenges for foodservice operators to comply, it has signaled a broader shift in consumer attitude toward the routine use of not just straws but all single-use plastics, including bags, cups and food packaging.

As society becomes increasingly aware and concerned about their environmental footprint, retailers and manufacturers have an opportunity to elevate their brand to match consumers’ values by supplying and producing environmentally safe alternatives. And with the rise of quick-service dining occasions, particularly food delivery, opportunity is ample among the industry to offer innovative, convenient foodservice packaging solutions to drive growth.

Related:The Upsides of Smarter Packaging

Two-thirds of foodservice packaging manufacturers experienced growth in volume in 2017, and more than 40% reported profit growth, according to the Foodservice Packaging Institute’s (FPI’s) 2018 State of the Industry report. This year, 84% said they expect volume expansion, while 67% expect profit growth, noting that the greatest areas for market expansion include fast casual and quick service via home delivery, as well as grocery stores as retailers continue to improve their foodservice offerings with prepared foods, meal kits and grocerants.

Charting Regulation Challenges

While plastic straws have dominated headlines in recent months, they’re not the only environmentally destructive product sparking government regulation. Several cities, including New York, have banned or partially banned the use of foam containers, including cups, plates and trays. Meanwhile, Santa Monica, Calif., recently expanded its regulation on the use of polystyrene—a petroleum-based plastic material—foodservice ware, now requiring all food and beverage providers to use marine degradable alternatives to customers only upon request.

The rise of government legislation and regulation on single-use plastics is posing challenges for retailers and foodservice operators to comply, or otherwise face steep fines and even, in some instances, jail time. As businesses begin to switch toward sustainable foodservice packaging, including recyclable and compostable options, they must also consider their approach toward proper disposal in composting or recycling facilities.

“Currently only 7% of the recyclable plastics in the world actually end up getting recycled,” says Mark Marinozzi, VP of marketing for compostable packaging supplier World Centric, based in Petaluma, Calif. “The rest of that material goes in the landfill—that’s 93%.”

In addition to a retail line of foodservice ware, World Centric offers compostable packaging for retailers’ foodservice programs, like Good Earth Market, which recently added World Centric’s PizzaRound—a circular, compostable alternative to cardboard pizza boxes. Made from 80% sugarcane and 20% bamboo, the product is 100% tree-free and plant-based. It is designed to reduce packaging waste, labor and space needs, supporting foodservice operators’ efforts to minimize their environmental footprint.

To ease retailers’ transition to sustainable packaging, and address the challenge of properly diverting waste, World Centric is testing a pilot program in Northern California called “Fork it Over” that provides compostable waste bins for retailers to carry in-store. The company then collects the bins and transports them to a composting facility for the items to be grinded down and converted into soil.

“We’re still as a country challenged with having commercial compost facilities that can take the plant-based products, that can grind them out or use anaerobic digesters to revert them back to a sulfate,” Marinozzi says. “We need to help these local and regional communities get to a place where they are going to be able to divert without having the problems associated with the traditional incumbent waste haulers and end-of-life options.”

Brand Elevation

In addition to the operational challenges, the higher cost of sustainable packaging alternatives compared to their plastic counterparts can appear as a threat to food businesses’ profitability. But as consumers increasingly base their purchase decisions on products and brands that align with their values, it’s a cost that retailers may want to take.

“Consumers are increasingly caring about the environment, and they want to do the right thing in the restaurants that they frequent or the stores that they decide to go with. One of the reasons they choose to frequent those establishments is increasingly because that establishment is using compostable foodservice ware or not,” says Marinozzi. “It’s a signal to a consumer that the restaurant or foodservice operator care about the environment, about their community locally and the community as a whole.”

Austin, Texas-based Whole Foods Market, for instance, touts a reputation as a natural, eco-friendly grocer, adhering to a strict set of quality standards for the brands and products it carries in-store. As such, customers who shop at Whole Foods generally share those same quality standards and expect those values to be consistent throughout the store and its operations, including packaging for on-the-go items, meal kits and delivery, Marinozzi says.

Plus, providing unique packaging can serve as an opportunity for retailers to advertise their brand. “The foodservice industry has learned that packaging can be a ‘walking billboard’ and helps to drive sales. Retailers should consider how packaging can help promote their brands,” says Lynn Dyer, president of Falls Church, Va.-based FPI. “Consider the premade sandwich platter, sold by many grocery retailers. Some foodservice outlets seeking additional sales have ramped up catering offerings. They may offer their own sandwich platter, but expertly branded so customers know where it came from.”

Catering to Convenience

While environmental attributes are important to consumers, retailers are ultimately concerned with profitability, says Dyer. As such, retailers should offer programs that can drive sales, like grab-and-go, catering and delivery, and then seek packaging that supports the needs of those programs.

“If the package helps the consumer have a good experience with food, great,” says Dyer. “If the packaging does not support the program, well, the retailer may lose that business—perhaps to a competitor in the foodservice space.”

With consumer demand for convenience driving growth across the retail food space, retailers must provide foodservice packaging that is both safe and efficient for on-the-go and delivered meal occasions. Inline Plastics, based in Shelton, Conn., last year launched a line of tamper-evident Safe-T-Fresh SnackWare, designed to protect food for convenient on-the-go snacking. The line is available in three sizes and features leak resistant and tear strip technology, eliminating the need for shrink bands.

Photograph courtesy of Inline Plastics

“Online grocery delivery adds another infrastructure environment before reaching the consumer,” says Cindy Blish, Inline Plastics associate brand and communications manager. “Proper packaging extends freshness and food looks better when it’s delivered.”

With delivery in mind, Sealed Air, based in Charlotte, N.C., provides its sustainable TempGuard line of paper box liners designed to provide thermal protection for perishables. Made from recycled paper, the padded material maintains proper temperatures and cushioning while food is in transit.

Photograph courtesy of Sealed Air

“With the increased complexity of holding logistics and product transfer, leak-proof packaging will continue to increase in demand, along with packaging that allows the product to best maintain its shape and eye appeal,” says Stacey Couch, director of marketing, retail solutions, for Sealed Air.

As the eco-friendly movement continues to evolve, retailers must clearly be prepared to utilize fresh packaging applications that will influence a consumer’s purchasing decision as much as the products within.