Originally published by Spendedge: CPG Packaging Trends to Support Sustainability: What Leading Companies are Doing
Growing concerns about environmental degradation, fueled by excessive waste, pollution, and resource depletion, are driving the increasing demand for sustainable packaging. Since the 1950s, roughly 8.3 billion tonnes of plastics have been produced, with only 9% recycled. Embracing innovative sustainable packaging not only helps manufacturers reduce operational costs but also enhances product sustainability and improves customer satisfaction, safety, and well-being.
Innovative sustainable packaging solutions involve various strategies, including using biodegradable materials, adopting minimalist designs to minimize waste, incorporating reusable containers, and utilizing packaging made from recycled materials. Regulatory and public concerns regarding single-use packaging waste are aligning with broader trends, posing significant challenges in consumer packaging. While authorities are taking steps, companies and retailers are also proactively launching ambitious initiatives to enhance the eco-friendliness of packaging and completely overhaul packaging processes. By 2026, about one-fifth of organizations with sustainable packaging goals aim to shift their focus from simply reducing plastic usage and recycling to actively reducing the carbon footprint of their packaging. These initiatives go beyond using fewer materials; they involve adopting materials produced, transported, and processed with greater efficiency.
Additionally, the top 25 CPG companies have pledged to enhance recyclable content, reduce product recyclability, minimize packaging, or promote material reuse. Notably, 80% of these companies are actively working towards achieving fully recyclable packaging for all products by 2030.
Challenges in Achieving Sustainability: CPG companies face hurdles
The complex and opaque nature of supply chains in the CPG industry poses significant challenges in terms of visibility, spanning multiple countries and involving various tiers of suppliers. This lack of transparency makes it difficult to detect and address environmental or social issues, such as sourcing materials from certified suppliers and minimizing waste and emissions.
The current global economic inflation has led to a surge in raw material, energy, and transportation costs, presenting obstacles for CPG companies striving to meet sustainability objectives without raising prices.
Although consumers increasingly prioritize sustainability, many remain sensitive to prices, creating a delicate balance for CPG firms. Lack of information, unclear labels, and higher prices contribute to challenges for consumers in making sustainable choices.
CPG companies must navigate a complex web of environmental regulations that vary widely across countries. Additionally, measuring and reporting sustainability performance poses significant challenges, requiring robust data collection and analysis systems, as well as transparent and credible reporting practices.
Recent years have seen a slowdown in demand for specific CPG products, adding further strain to an already challenging industry. Despite these challenges, they also present opportunities for strategic innovation and differentiation.
Innovative and Sustainable Packaging Trends in the CPG Sector
Paper-Based Bottles
Paper-based bottles have gained momentum as a sustainable alternative to traditional plastic bottles. Praised for their eco-friendly attributes, they are made from renewable materials and are biodegradable. Many companies are embracing this trend to reduce their environmental footprint and cater to consumers seeking more environmentally responsible packaging options. For example, Pernod Ricard introduced single-mold paper-based bottles for its Absolut Vodka, commercially available in the UK. Similarly, Kraft Heinz experimented with paper-based ketchup bottles made from sustainably sourced wood pulp.
Increased Use of Aluminum Packaging for Cleaning Products
The adoption of aluminum cans for cleaning products reflects a shift towards sustainable packaging solutions in line with consumer preferences and environmental concerns. Companies are focusing on environmental stewardship while maintaining product quality and competitiveness.
Factors contributing to the rise in metal packaging include the growing middle-income demographic, lifestyle changes, portability convenience, and heightened environmental awareness.
Many companies are introducing products, especially cleaning items, in aluminum packaging to eliminate single-use plastics from the market. For instance, Puracy launched a cleaning product in recyclable aluminum cans, while Henkel explores ways to reduce plastic waste and increase packaging recyclability.
Flexible and Sustainable Packaging for Confectionery Products
The move towards paper wrapping for confectionery products aligns with a broader trend towards sustainable packaging driven by environmental concerns, regulatory pressures, and evolving consumer expectations. This shift benefits businesses and the environment by reducing plastic usage, waste, conserving resources, and promoting responsible consumption.
Nestle experimented with paper-wrapped Kit Kat chocolate in Australian stores as part of its efforts to minimize plastic packaging. Similarly, Mondelēz International introduced sustainable packaging for its Cadbury’s Energy chocolate tablet, featuring fully recyclable paper flow wraps.
Increasing Adoption of In-Store Recycling
The growing adoption of in-store recycling reflects a broader trend towards environmentally conscious business practices. Retailers acknowledge their responsibility to reduce ecological impact and contribute to a more sustainable future. While regulatory compliance plays a role, the significant shift towards sustainability is largely driven by consumer demand.
In the US, Kellogg partnered with Albertsons to promote in-store recycling initiatives, including in-store recycling bins for packaging and plastic packaging. The partnership aligns with Kellogg’s commitment to sustainable and equitable food access by 2030.
How SpendEdge Can Assist CPG Companies with Packaging Initiatives
Procurement advisors can offer effective supplier analysis strategies while promoting eco-friendly practices by gathering and analyzing supplier data to make strategic decisions. This includes selecting suppliers and products with minimal negative environmental impact, evaluating supplier performance, financial stability, product/service quality, and capabilities.
Procurement advisors can assist CPG companies in implementing sustainability initiatives, especially related to packaging, by evaluating suppliers and suggesting improvements. They can provide suggestions on eco-friendly packaging solutions such as biodegradable materials or designs that minimize waste and analyze the entire packaging lifecycle for areas of improvement.
Experts can provide insights on enhancing sustainability efforts towards packaging, including material selection, balancing cost containment with quality and sustainability objectives, and compliance with various regulations.
CPG companies leave an environmental footprint due to consumption acceleration, impacting the planet through raw materials sourcing and packaging usage. Sustainable initiatives and designing for a circular economy can help reduce environmental impact and improve operational efficiency.
Educating consumers about the benefits of sustainable packaging and fostering a culture of sustainability within the company are crucial for CPG companies.
Integrating sustainability into product offerings and responding to shifting demand patterns can differentiate a CPG company in the market. Effective reporting and transparency in sustainability practices can build consumer trust.
Prioritizing these strategies can lead CPG companies towards creating a more sustainable future.
