Easy to contemplate, supported by consumer preferences, leverageable with company stakeholders—just swap out what we were doing, and go green.
Not so fast!
First, let’s look at the green packaging market, consumer trends, and government regulations. Then, we will look at each of the above issues.
The Green Packaging global market is BIG and growing FAST.
According to a research report from Straits Research, the global market for green packaging materials was $229.5 billion in 2021. And the market is projected to grow by 7.5% compound annual growth rate to $409.2 billion by 2030. North America is expected to represent $100 billion by 2030, the largest market contributor.
Consumer awareness of the environmental issues surrounding packaging (both in producing those materials and the concerns around packaging waste), as well as government regulations are key drivers of this growth.
How much packaging waste? 82.2 million metric tons in 2018, up from 75.8 million in 2000 according to the latest EPA data. Recycling is helping, isn’t it? Well, yes, just under 54% of packaging and container waste was recycled, but 30 million tons were sent to landfills in 2018! While roughly 32% of waste is recycled in the U.S., only 9% of plastics are.
No surprise, we are running out of landfill capacity. Seven states are projected to reach capacity within 5 years, with another 4 within 11 years. Even with the growth of recycling, there is urgency here!
While giant multinational companies like McDonalds have committed to achieve 100% sustainable packaging by 2025, the study points out that it is the smaller, more nimble, more socially conscious manufacturers (particularly in the food and beverage industries) who are at the forefront of environmentally friendly packaging. Much more costly and complex to shift a global manufacturing and supply chain matrix, than to contemplate a single production facility, and likely, fewer packaging and production equipment suppliers.
That said, P&G, Colgate, Nestle, Snapple, Amazon, Google and TetraPak are all making moves to get to net zero carbon emissions no later than 2030. No doubt, many other major Brands will follow to prevent the loss of market share.
What about consumer preferences for Green Packaging?
The verdict is in, and the data is compelling. Check out the following highlights from the 2022 Sustainable Packaging report from Schurr.
- 76% of consumers have made a conscious effort to purchase more sustainable products in the past year.
- 86% said that they be more likely to purchase products from a Brand that had more sustainable packaging.
- 47% have purchased a competing brand because they offer sustainable packaging. And that increases to 56% for 18 – 29-year-old consumers.
- 47% are willing to pay more for a product that offers sustainable packaging.
- 50% said that sustainable packaging was the most important sustainability initiative for Brands. And, you guessed it, that number goes to 60% for the younger generation.
- 63% of consumers are concerned about the environmental impact of packaging (27% extremely, 36% very concerned).
Some urgency here as well!
The U.S. Food and Drug Administration (FDA) regulates packaging and labeling of food. FDA oversight includes packaging materials like plastics, coatings, papers, food colorants, and adhesives—all of which is regulated and deemed safe for use.
Of primary concern is the safety of the packaging material’s contact with food. The National Environmental Policy Act (NEPA) requires the FDA’s evaluation of the packaging materials environmental impact as well. All food-packaging requires an Environmental Assessment (EA), followed by a Finding of No Significant Impact (FONSI) and clearance by the FDA. The FDA mainly reviews the environmental impact stemming from the packaging material’s use and disposal.
Drug and pharmaceuticals packaging are also under the microscope. Per FDA regulations, pharmaceutical packaging must:
- Provide protection against exposure to light, moisture, oxygen and variations in temperature to mitigate any risk to the medication’s quality. Containers must be well closed and remain airtight if repeatedly reopened/closed.
- Provide protection against physical damage through handling, shipping, and storage processes.
- Provide protection against biological contamination. The container and its materials cannot have any adverse interaction physically or chemically with the medication or allow for leaks, diffusion, and permeation. This means materials used to package pharmaceutical products must be subject to rigorous quality assurance requirements.
On top of that, many states have even stricter regulations—especially in California, New York, and Illinois.
Back to the important issues to be considered when going Green.
- How far can you go when it comes to more sustainable packaging? Can you get equivalent product performance at an affordable cost with alternative materials? The answers are no doubt unique for each product or Brand. Recyclable materials, packaging made from recycled materials, bio-degradable or compostable materials, returnable or refillable packaging—so many options. But do any of them work in practice?
- Each option, and then the alternative that you select, then requires a robust testing protocol. The data from these tests will inform your choices.
- Does the material machine well? Is there any effect on throughput? Does the material produce heat or other potentially negative effect that may cause more equipment maintenance or adjustments.
- Is there any impact to shelf life or light sensitivity? Can you redesign the package to offset this. Like eliminate a “window” to see the product, as long as consumers do not object to such a change.
- How does the material handle labels or ink? Any integrity issues, or consumer experience issues—like when the product is used when hot or cold, or when out at room temp after being refrigerated?
- It is important to complete a full circle environmental assessment of the new packaging to truly understand the impact of a change in materials. Does the new material recycle fully, or as well as what you use today? Or does the prospect of further steps to clean or handle the material diminish the benefit(s) or increase the costs for reuse or recycling?
- Perhaps most importantly, does going green improve your value proposition, your competitive differentiation? Is green packaging important to your core consumer? And, if so, would they be willing to pay a bit extra, so that you can maintain your margins?
Need a hand in figuring all of this out?
Damen Jackson is here to help. We collaborate with you and your team to solve problems by making informed choices, grounded in strategy, that build your business and your Brand.
Immersion: We gather information from stakeholders inside and outside your business to understand the dynamic landscape facing your company, your Brand.
Synthesize & Prioritize: We define your best customer base, differentiate your business, and build a brand platform that defines your space in the market. We create a unique brand persona, voice, and story. With these tools, your team can confidently change weaknesses into new opportunities.
Action Plan: We unify and focus team energy with mutual team goals, eliminating effort wasted on low-impact activities.
Here are our key takeaways around sustainable packaging from the most recent Pack Expo show in Chicago: #PackExpo2022
Take the first step to a more successful business today.
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