Marketing Sustainable Packaging
February 1, 2008
Marketing Sustainable Packaging
By Pauline Hammerbeck, contributing Writer
This Special Report is the first in a series in The National Provisioner, focusing on the challenges and success stories ofpromoting and adopting sustainability in the meat- and poultry-processing industries. This month, we take a look at the overall packaged-goods marketplace and its attempts to market sustainable packaging.
Maybe it was the apocalyptic images of a post-Katrina New Orleans or the dire warnings of melting ice caps in “An Inconvenient Truth,” but, suddenly, global warming has become the topic of conversation, with political and public debate abruptly shifting from whether it actually exists to what can be done to stop it.
Among other things, the heightened concern has put increased focus on the effects of industry on the planet, forcing companies to look more closely at their package-development practices and how they’re presenting their environmental attributes in the marketplace.
There are vast challenges in developing and marketing sustainable packaging. For one, there’s the lack of definitive scientific information on what materials and processes yield the most favorable, least harmful results. There’s also the challenge of getting consumers to translate their concern for the environment into tangible sales.
“For almost 20 years, consumers have been saying they want to make the greener choices in the marketplace, by some overwhelming percentage — 50, 60, sometimes even 70 percent. But it turns out there’s a vast chasm between green concern and green consumerism,” says Joel Makower, executive editor of GreenBiz.com, an online news service on business and the environment.
The business imperative
Wal-Mart, for one, makes a good case for going green. Brands are finding a new opportunity to communicate the ecological attributes of their packaging now that the retailer has introduced its Packaging Scorecard, which ranks brands on greenhouse gas emissions, recycled content and other package development factors.
Since launching on February 1 of last year Wal-Mart reports “active use” of the scorecard.
“We have already used the scorecard to evaluate two types of packaging,” says Josh Hannay, business development manager for Ruiz Food Products, which supplies Wal-Mart with El Monterey brand frozen Mexican food products. “The scorecard was easy to use and gave us a single number that translates into how we’re doing and how we can do better.”
The scorecard will be used as a measurement tool to help Wal-Mart buyers make their purchasing decisions. And you better bet brands will be looking to max out their rankings. However, Wal-Mart has been clear in saying the scorecard results will not be the only criteria for purchasing decisions.
“This simply gives our buyers another decision-making tool and another thing to consider,” said Matt Kistler, senior vice president of marketing, research and insights for Sam’s Club and captain of Wal-Mart’s Packaging Sustainability Network, in spring of 2007.
Translation: the investment in packaging is all yours, and you’re not likely to be given much room to offset those costs with a price increase.
So, what’s the upside? “Wal-Mart could be a market maker,” says GreenBiz.com’s Makower. “One of the biggest challenges this space has to overcome is [the perception] that green products are only for people who can afford them. Wal-Mart could significantly expand the demand for these products in a way that really communicates the value to the consumer. They stand the chance of connecting the dots in a way that [brand] marketers have failed to do.”
Beyond Wal-Mart, brands also have to consider the way they talk about their environmental practices with other stakeholders, including activists.
Investors have also come together to demand more environmental transparency from corporations, asking them to disclose, among other things, the amount of carbon dioxide they emit throughout the supply chain. Unlike activist groups, these requests aren’t only over concern about the environment but, rather, over the expectation that, in the coming years, a company could destroy shareholder value solely on its negligent or sub-optimal environmental practices.
“The imperative [to go green] comes from the desire of any brand to be in business in 50 years,” says Russ Meyer, chief strategy officer, Landor San Francisco. “In order to do so, they need to embrace sustainable business practices; otherwise the effects of conducting their businesses will ultimately bring them, and the rest of the world, to ruin.”
There are also more practical reasons to start in on sustainable packaging. If Europe is any indication, there are environmental regulatory threats that will increasingly monitor and dictate corporate operations. By acting now, brands can anticipate these regulatory concerns, rather than react to them.
There is also an incredible, often overlooked, opportunity in sustainable packaging to realize cost savings in the manufacturing (e.g., energy use) and material selection stage. Brands can alter their processes, products and packaging to deliver perhaps more innovative or user-friendly results at lower costs with reduced ecological burdens.
In fact, sustainability is likely to find itself transformed into more of an economic model, rather than an environmental one; some advocates go so far as to call William McDonough, author of the book “Cradle to Cradle,” which sparked the sustainability revolution, the modern-day Adam Smith.
A framework for sustainable packaging
Even if you’re already convinced of the business imperative for sustainable packaging, the solutions can often be tricky.
Take packaging materials. They are often the first object of scrutiny. Experts advise that you profile the environmental impact of your materials all the way down the supply chain (brands must demand access, even with proprietary materials!) and that you should replace materials of concern with “preferred” alternatives.
But even preferred materials can cause problems. Bioplastics, for instance, are hailed for their use of renewable resources like corn or soy beans in lieu of petroleum, but they are not an overriding solution for sustainability, according to Ken Alton, CEO of MBDC, a prominent sustainable product and process design consultancy. Bioplastics can’t be the end-all solution, he says, simply because there’s not enough agricultural land to make everything from such materials.
Even those bioplastics already in production have challenges. PLA, for instance, is crafted from corn and is compostable but can’t easily be separated from PET (without using infrared sorting equipment), which contaminates the PET recycling stream. Until PLA is integrated into the recycling stream it presents a dilemma for brands.
“The mistake most people make is focusing on one topic, like GMO or non-GMO. It’s important to look at the entire lifecycle of the product,” says Adam Lowry, co-founder of Method, the home care brand.
Indeed, most sustainability experts advocate such a “lifecycle” approach, often dubbed cradle-to-cradle, that simultaneously looks at optimizing resources, sourcing materials responsibly, limiting the environmental and human health impacts and looking at resource recovery—and does so upfront, during development.
Though Coca-Cola conducted its first lifecycle analysis back in 1969, April Crowe, a senior environmental manager at Coca-Cola, said at the Paperboard Packaging Council’s spring 2007 strategy meeting that it’s still a challenge to optimize sustainable packaging. For example, when Dasani bottled water first launched, she said, it was in a dark blue bottle that didn’t work well in the PET recycle stream, so the brand had to switch to a less troublesome light blue.
For brands with less experience in sustainability, the challenges are even more pronounced. Perhaps because, until recently, there haven’t been common metrics by which to make such assessments.
Wal-Mart’s Packaging Scorecard offers some guidance by measuring packaging across nine attributes (greenhouse gas emissions, material value, product/package ratio, cube utilization, transportation, recycled content, recovery value, renewable energy, and innovation). And the Sustainable Packaging Coalition, an industry working group, released a 104-page Design Guidelines report with specific cradle-to-cradle-inspired strategies for source reduction, design for transport, design with fair labor and trade practices, etc.
So once you develop what you believe to be the most optimal sustainable packaging, how do you market your greenness?
“At the end of the day it’s all about storytelling,” says GreenBiz.com’s Makower. “Packaging is about storytelling in general, but even more so in the sustainability space. This is about some mixture of head and heart; it’s about facts, science and hard core data, but it’s also about our families and our future. Telling that story, whether it’s in word, image or a block of text, in some combination is imperative.”
And, according to Jacqueline Ottman, such efforts must satisfy two objectives: improved environmental quality and customer satisfaction. “Research indicates that many green products have failed because of marketers’ myopic focus on ‘greenness’ over the broader expectations of consumers,” she explains.
To be successful, marketers don’t even necessarily have to take a solid sustainable stand; those that do settle on a green image can find success by eschewing the dated “crunchy granola” presentation in favor of a more modern edge, much like gDiapers does with its line of flushable diapers.
“The product we have is not only sustainable but quite funky and groovy — there’s a fashion element there,” says Jason Graham-Nye, founder of the Pacific Northwest baby brand. “We could have called ourselves Eco-diapers, which would have really cornered us in the green space,” he explains. Instead, they decided on something a bit more enigmatic. “The letter “g” in gDiapers could be anything,” he says. “It could stand for green, it could be groovy, or it could be global. We left that up to the consumer.”
Green brands are also beginning to favor environmental labels. Timberland’s “Our Footprint” initiative, a label that details the brand’s environmental and community impact, is a prominent example.
Some, like Gary Hirshberg, co-founder and CEO of Stonyfield Farms, prefer independent certification, saying it is a more credible approach.
Fools rush in
Whatever your method, you have to be certain that you don’t exaggerate or rush your environmentalcommitments.
“If you’re putting this product out there and nobody believes that you as a company really care about this, then it’s not going to sync,” says GreenBiz.com’s Makower. People want solutions, he says, but marketers need to be mindful not only of the eagerness for sustainable packaging but also the skepticism that exists. “This is not a simple act of doing the right thing and everyone will love you for it — it’s a lot more complex.”
And it likely will require a level of consumer education. According to a study by Meyer’s firm Landor (The Power of Green Brands, June 2006), consumers don’t often make time to learn about the environmental impacts of what they buy. The study found 37 percent of the general population unable to determine what makes a brand “green.”
“Brands should lead the way,” says GreenBiz.com’s Makower. “This is a speakable moment. The levels of concern are high; the level of discourse has increased; we’re seeing more directly the impact of what the changing climate can look like,” he explains. “People are looking for heroes.”
Not that he’s suggesting a new greener box of Corn Flakes is going to make you a hero, but rather, he says, “There’s an openness that didn’t exist even two years ago.”