Green Packaging

MICHAEL GARRY

While a necessary carrier, protector and promotional vehicle, product packaging poses a major environmental challenge for CPG manufacturers and retailers. According to Wal-Mart Stores, one-third of all consumer trash in the U.S. comes from packaging.

General merchandise and health and beauty care products are not usually perceived to be at the forefront of the packaging agenda. But manufacturers of these products, egged on by Wal-Mart and other retailers, are beginning to address the sustainability of their packaging.

As with any product, the first approach is simply to use less packaging without sacrificing the integrity of the product. The second is to make packaging with post-consumer recycled material and with material that can itself be recycled.

A notable example of a general merchandise product whose packaging has been dramatically “green-sized” is the compact fluorescent lamp (CFL) made by Osram Sylvania, Danvers, Mass. In 2005, the company developed “Smart Pack” packaging for all of its CFLs as an alternative to standard plastic clamshell packaging. Smart Pack uses 40% less material than its predecessor and generates 30% less transportation-related air pollution in shipping, said Stephanie Anderson, spokeswoman for Osram Sylvania.

“Smart Pack packaging was developed to address consumer interest in more sustainably packaged products,” Anderson said. “While traditional blister packs are not compatible with most curbside recycling programs, Smart Packs are made of 100% recyclable paperboard and contain between 30% and 100% post-consumer recycled fibers.”

Osram Sylvania has not sacrificed any product protection with the new packaging; if anything, protection has improved, said Anderson. “During a recent store visit, a skeptical grocery buyer dropped a traditional blister package and a Smart Pack at the same time,” she said. “The Smart Pack product was undamaged, while the product in the blister pack smashed on impact.”

Smart Pack was made available nationally in 2006 and continues to be rolled out across the U.S. and Canada. K-VA-T Food Stores, Abingdon, Va., began receiving Smart Pack CFLs in the third quarter of last year, said Chris Smith, the chain's director of video and general merchandise, who described the packaging as “very streamlined, as minimal as you can get.”

Apart from its environmental benefits, Smart Pack also offers some merchandising advantages. For example, when the Osram Sylvania CFLs came in clamshell packaging, they were hung on pegboards at K-VA-T's Food City stores, but now they can be stocked on shelves, offering “a cleaner appearance,” said Smith. In addition, the packaging “has added at least 10% of merchandising room back to the section, without altering the size of the section, so we can put out more variety,” he said. “When you get a win on merchandising and a win on the environment, that's a big win.”

But Smith did not tie the new packaging to an increase in sales of CFLs. “None of the items see a bump in sales without a promotion,” he said.

Still, for consumers sensitive to environmental considerations, the Smart Pack has appeal. “A growing percentage of consumers will notice it as long as the product is in a reasonable price range,” Smith said. “We don't experience an extreme desire for green or ecological products outside of that price range.”

WAL-MART'S CONTRIBUTION

If manufacturers are beginning to introduce sustainable packaging, it's in no small part thanks to Wal-Mart. In 2006, the retailer announced its intention to reduce the amount of packaging in its supply chain by 5% by 2013, thereby saving $10.98 billion in collective transportation, manufacturing, shipping and storage-related costs. Wal-Mart's share of the savings: $3.4 billion.

The vehicle for this change is Wal-Mart's online sustainable packaging scorecard, accessible through its Retail Link supplier portal. The scorecard rates manufacturers in nine areas, including renewable energy use, innovation, recovery value, recycled content, transportation, cube utilization, product/package ratio, material value and greenhouse gas/carbon dioxide per ton of production.

Since February of last year, manufacturers have submitted their packaging information voluntarily to the scorecard. It behooves them to do so because Wal-Mart buyers may factor their scores into purchasing decisions. Suppliers are given an indication of the percentile where they rank compared with others in their product class. The scorecard also tracks Wal-Mart's progress in reducing its overall packaging.

A “majority” of Wal-Mart and Sam's Club suppliers are now using the sustainable packaging scorecard, including those who supply nonfood products, said Wal-Mart spokeswoman Christi Davis Gallagher, though she declined to be specific. In addition, she said, Wal-Mart's own “packaging team” has worked to improve packaging for many nonfood products, which has resulted in “lower pricing, lower damage rates and better product delivery.”

For example, the packaging team in 2005 partnered with select private-label brand suppliers to improve the packaging of nearly 300 items in its Kid Connection toy line. By making the packaging smaller, Wal-Mart was able to use 497 fewer shipping containers and generated freight savings of more than $2.4 million per year.

In 2006, Sam's Club reduced the amount of packaging in its digital media department by 50% for items like memory sticks for cameras. As part of this change, Sam's worked with Apple to convert iPod packaging to 100% recyclable materials; the package is also reusable and significantly reduced in size.

Education is a large component of Wal-Mart's sustainable packaging initiative. Last month, the retailer hosted its fourth annual Sustainable Packaging Expo in Rogers, Ark., with more than 2,200 supplier representatives, buyers and exhibitors in attendance. The Expo featured educational sessions on biodegradability, transportation, logistics, government guidelines and other topics, as well as more than 165 booths demonstrating packaging materials and services.

LEAVE BEHIND EXCESS

UK.-based Tesco is another major food retailer that stresses packaging reduction, aiming to reduce the amount of packaging on both private-label and branded products by 25% by 2010. The retailer has developed an online database where suppliers can enter information about their packaging, allowing Tesco to identify opportunities for improvement.

In 2007, Tesco reduced packaging on some nonfood private label products, such as electrical items and clothing lines, by as much as 40%, according to its website.

Last month, Tesco announced the start of a “customer packaging audit” at two stores where shoppers are allowed to remove and leave plastic and paper packaging in the stores after purchasing the products. The idea is for shoppers to identify products with excessive packaging. “Packaging left by customers at the store will tell us a lot about areas we may need to look at again as well as where we have got it right,” said Alasdair James, head of energy, waste and recycling at Tesco, in a statement.

The Sustainable Packaging Coalition (SPC), Charlottesville, Va., a nonprofit industry advocacy group that counts a number of HBC suppliers among its members, is working on ways to increase recycling in the U.S. so that more post-consumer materials are available to be incorporated into packaging. “We do a crummy job in this country of recovering materials, especially polymers,” said Anne Johnson, the SPC's director.

Johnson said she would like supermarkets to help the recycling cause by offering to collect water bottles and other plastic bottles made of polyethylene terephthalate (PET). “It drives me crazy when you go to a store and drink bottled water and can't recycle it,” she said. She would also like to see retailers contribute to fostering a “national recycling ethic.”

Consumers share Johnson's desire for more recyclability. In a recent survey by the Hartman Group, Bellevue, Wash., 75% of respondents ranked the ability to return a product's container to the consumer marketplace via curbside bins as either “very important” or “important.” Consumers “are increasingly aware of the back-end — where it goes when it enters their home and after they touch it,” said Alison Worthington, managing director of sustainability, the Hartman Group.

For its part, the SPC recently initiated a Labeling Project to develop a set of labels that would convey to consumers options for packaging after use, such as recycling, composting or disposal. “Our hope is that the Labeling Project will address the confused array of communications about end-of-life options for product packaging,” said SPC in a statement. “We believe that creating consumer demand for alternative disposal methods will act as a catalyst for improving current recovery infrastructure within the U.S.”

A similar project, called the On-Pack Recycling Label Scheme, has been launched in the United Kingdom by the British Retail Consortium, with support from the Waste & Resources Action Program (WRAP). Under the scheme, packaging would have labels reading one of the following: widely recycled, check local recycling or not currently recycled. Retailers and manufacturers are being encouraged to participate in the program. Last year, Tesco pledged to begin providing recycling information on all of its private-label products as well as expand its own recycling facilities.

Johnson pointed out that in the U.S. Federal Trade Commission's Green Guidelines require that a packaging label that says “Please Recycle” can be used only if “a substantial majority” of the U.S. population has access to recycling for that type of package. However, data on recycling accessibility “for many packages does not exist,” she said. “This is a big structural issue that should be addressed so that we can enable appropriate labeling of packaging.”

Johnson commended Wal-Mart for bringing the sustainable packaging conversation to the industry. However, she believes Wal-Mart's focus has been primarily on the use of less material rather than on recycling or the use of recycled content.

HBC PROGRESS

Johnson acknowledged that some health and beauty care companies have been using large amounts of recycled content in their packaging. “I saw a tube of cosmetics made from 100% post-consumer recycled material, which I had not seen before,” she said. “That's a critical step for creating a market pull for recovered materials.”

L'Oreal, New York, is one example of a beauty care company pushing sustainable packaging. Last month, on Earth Day, the company announced new “green goals” and recapped its environmental progress, which included reducing “waste per finished product” by 0.5% over the past year and by 10.1% since 2005. In its 2007 Sustainable Development report, L'Oreal pointed out that it reduced the total weight of its Fructis shampoo bottle and cap from 28.5 grams in 2003 to 21.8 grams in 2007.

In addition, a handful of L'Oreal's brands, including The Body Shop and Kiehl's, use recycled PET in packaging. For example, the Kiehl's brand introduced Superbly Restorative Body Lotion and Superbly Restorative Dry Oil in 100% post-consumer recycled PET.

Estee Lauder, New York, designs its packaging under a “cradle-to-cradle” philosophy with the goal of “maximizing the use of renewable and recycled source materials, designing for recovery at the end of the product life and manufacturing our packaging using renewable energy,” according to the company's Corporate Social Responsibility Report. Its Aveda brand uses 80% to 100% post-consumer recycled content in all hair care bottles and jars and 35% in tubes.

The Pink line of skin care products made by Victoria's Secret, Columbus, Ohio, incorporates 80% post-consumer recycled content in its containers, noted Daniel Abramowicz, executive vice president of technology and regulatory affairs for packaging manufacturer Crown, Philadelphia.

For its toothpaste and other products, Tom's of Maine, Kennebunk, Maine, uses packaging made of post-consumer recycled paper board. Colgate-Palmolive, New York, began reducing the thickness of foil and plastic laminate used in toothpaste tubes marketed in Europe, Asia and Africa in 2006, resulting in a 13% weight reduction.

Among general merchandise products, Abramowicz pointed out that the packaging for the DVD of the documentary “The 11th Hour” on the state of the natural environment is made from 100% post-consumer waste. In addition, Sanford Corp., Oak Brook, Ill., makers of Sharpie pens, has removed plastic clamshell from its packaging, he noted.

DEFINING PACKAGE SUSTAINABILITY

The Sustainable Packaging Coalition, Charlottesville, Va., has come up with a definition for sustainable product packaging that Director Anne Johnson called “very ambitious.” The CPG industry “has a long way to go to get there.”

Here are the basic elements of the definition.

Sustainable packaging:

• Is beneficial, safe and healthy for individuals and communities throughout its lifecycle.
• Meets market criteria for performance and cost.
• Is sourced, manufactured, transported and recycled using renewable energy.
• Maximizes the use of renewable or recycled source materials.
• Is manufactured using clean production technologies and best practices.
• Is made from materials healthy in all probable end-of-life scenarios.
• Is physically designed to optimize materials and energy.
• Is effectively recovered and utilized in biological and/or industrial closed loop cycles.