Why more brands are shifting to sustainable packaging
Businesses that are looking for proof of a return on investment for sustainable packaging and sustainable operations should look at some encouraging financial evidence from recent years.
- Consumers are willing to pay more for goods and services from sustainable companies, according to the World Economic Forum.
- The 100 most sustainable companies in the United States, as named by investment magazine Barron's, enjoyed share price growth of 29% in 2017, compared to 22% for the S&P 500 Index.
- The 2018 Global Sustainability Index Institute Report looked at the number of sustainable development goal statements in the annual reports of 400 of the world’s largest businesses and found that sustainability goals had more than doubled. The reasons for the increase? Company performance benefitted, and stakeholders were interested in sustainability.
Brands turn to sustainable packaging for many reasons, including corporate social responsibility, reducing their carbon footprints, reducing waste, increasing sales — and because retailers require it.
If you would like more information on sustainable packaging for your own business, request it here.
1. Sustainable packaging shows corporate social responsibility
A focus on corporate social responsibility means a business is committed to enhancing the environment and society, not contributing to its destruction. Walmart, one of the largest retailers in the world with more than 11,300 stores in 27 countries and e-commerce websites in 10 countries, recognises its influence and has taken steps toward a leadership role in sustainable packaging.
In Walmart's 2018 Global Responsibility Report, its chief executive officer Doug McMillon stated that one of Walmart's goals is to become a trusted company that creates value for society.
Walmart has a chief sustainability officer, a role that has been gaining in popularity since 2010, with more than 120,000 new CSO jobs added, according to Recruiter.com. Walmart's CSO Kathleen McLaughlin says Walmart's goal is to take an assertive approach in transforming the retail sector for sustainability. By 2025, Walmart aims to have 100% recyclable, reusable or compostable packaging.
Source: Walmart Sustainability Hub
When big-box retailers like Walmart make bold statements like that, brands that do business with Walmart (or aspire to) must take notice. Sustainable packaging could make or break a deal with one of the world’s largest retailers, which brings us to our next reason why brands are shifting to sustainable packaging — because they have to.
2. Retailers expect sustainability from brands they carry
Retailer Target in 2017 announced five new sustainable packaging goals, citing customer expectations as the primary inspiration. One goal, to eliminate polystyrene, serves both the purpose of lessening ocean plastic contamination, as well as easing the burden on customers to try to figure out how to recycle it.
Another goal is to add the How2Recycle label to more Target packaging, so it is easier for customers to know exactly how to recycle each piece of packaging. Since the goals were announced, Target saw revenue grow from $69.5 billion in 2017 to $75.36 billion in 2019.
Companies that hope to sell products at Target, which is also one of the largest retailers in the United States, will be responsible for meeting Target’s promises to improve sustainability in packaging.
Similarly, in 2018 REI announced new product sustainability standards that apply to each of the more than 1,000 brands sold by the outdoor retailer. The REI Product Sustainability Standards outline the retailers expectations for how brands manage key environmental, social and animal welfare impacts. REI features brands and products that are sustainable in its stores and online.
3. Decrease carbon footprint, lower shipping costs
Many of today’s brands are concerned with the amount of greenhouse gas emissions they are producing, which are contributing to global warming and natural disasters. One such brand is HP.
As a producer of nearly 40 million notebooks in China every year, HP wanted to come up with a sustainable packaging solution, because most notebooks are shipped to the United States and European markets. HP wanted environmentally friendly packaging that minimises the impact of their business operations on the environment, while also being strong enough to protect its products from their long journeys from factory to end-users, especially in humid conditions.
By partnering with Billerud, HP started using fluting and liner made with virgin fibre sourced from responsibly managed forests. The fibre is incredibly strong and decreased packaging materials by 29%, reducing materials and maintaining protection. Another benefit for HP is that the box weighs less, which lowered shipping costs and reduced transportation emissions.
Over just one year, the lighter weight decreased total fibre usage by nearly 2,500 metric tons. It also decreased carbon dioxide emissions by 5,000 metric tons, drastically reducing HP's carbon footprint each year.
4. Optimise packaging, save millions
Sustainable packaging that is designed to minimise inefficiencies that contribute to environmental harm can also help optimise business operations. Home goods retailer IKEA is one notable example. Adjusting the packaging for one of its products by 50% resulted in savings of 1.2 million Euros per year.
When HP partnered with Billerud to decrease their carbon footprint it also decreased shipping costs and saved substantial amounts of money. While the higher-quality packaging material HP transitioned to costs roughly the same as the previous boxes, reducing the boxes’ weight by 35% results in airfreight cost savings of $3 million to $5 million annually.
When you work with a sustainable packaging partner like Billerud, you will get custom packaging that is optimised both to lessen environmental impact and increase your efficiency. That means:
- Less waste in packaging materials
- Less waste in packaging design to increase sustainability in manufacturing, operations and the supply chain
The result is increased savings for a business.
5. Meet growing consumer demand
Consumers are willing to spend their money on sustainable products. Market research company GlobalWebIndex reports that 42% of U.S. and UK consumers seek out products that are recyclable or that use sustainable materials when making day-to-day purchases.
Eco-conscious consumers care about sustainable packaging because they are concerned about the environment, and they’re willing to support companies that share this concern. In the U.S., 61% of consumers want to support companies that protect the environment. In the UK, 56% of consumers want to support eco-friendly companies. This, coupled with their awareness of their role in the supply chain, means they are willing to switch to support their values.
Companies that want to win over eco-conscious consumers are striving to meet the demand for sustainable packaging.
Partner with Other Sustainable Brands
As your business continues to make progress in sustainable efforts, packaging is one of the biggest ways to make an impact. When you partner with Billerud for sustainable packaging, you can:
- Be a leader in your industry in corporate social responsibility by adopting sustainable packaging materials
- Reduce your carbon footprint and use of resources through customisable package optimisation
- Better serve your customers who are increasingly aware of giving their business to sustainable brands they support
To learn how to develop a sustainable packaging program for your business, download our ebook.