With a series of environmental issues impacting the world in present-day, eco-consciousness has slowly become more of a necessity than a trend, even for those in the consumer packaged goods (CPG) industry. Rather than consumers simply hoping for their favorite brands to adopt eco-friendly practices, they actively demand these brands to implement sustainable methods, creating a sense of urgency among companies.
One of the most visible ways in which companies practice sustainability is through their product packaging. Around 26 percent of the total volume of global plastic production is used for packaging, with almost half of it being single-use plastics that can cause a myriad of health and waste problems and result in pollution that lasts for centuries. This alarming statistic has steered the CPG industry towards a significant shift, effectively popularizing innovative packaging solutions that are not only sustainable, but also align with the evolving expectations of environmentally conscious consumers.
With the staggering volume of plastic that’s being used for packaging, the demand for more sustainable packaging grows ever stronger. Regardless of business size, companies are beginning to adopt eco-friendly packaging as part of their overall business model–a change that many businesses need to adopt as consumer demands continue to shift.
The Rise of Eco-Friendly Packaging in the CPG Industry
According to Trivium Packaging’s 2023 Buying Green Report, around 71 percent of consumers actively choose products due to sustainable product packaging. In fact, despite prices steadily rising due to global inflation, the study found that consumers are still willing to pay a premium for products with sustainable or recyclable packaging to lessen their environmental impact. Even more pressure is applied towards brands as a survey from advertising agency Havas Worldwide found that consumers expect more from brands than the government when it comes to driving positive social change–at its core, a lot of people believe that brands can lead the way to a greener future.
Some of the biggest brands in the world have swiftly met these expectations. Nestle, for example, piloted recyclable paper packaging for KitKat chocolate bars in Australia last 2023. The goal, according to them, is to reduce the use of virgin plastics by a third by 2025. The Coca-Cola Company, on the other hand, launched its “World Without Waste” campaign in 2018, wherein they collect the cans they produce either for refilling or recycling and deliver their beverages in recyclable materials such as glass, aluminum, and polyethylene terephthalate (PET) plastic. In a similar spot to these companies is PepsiCo, who aims to design all of their packaging to become recyclable, compostable, biodegradable, or reusable by 2025. PepsiCo has an identical vision to Coca-Cola, which is to “build a world where packaging never becomes waste.”
Albeit noble in their pursuit of eco-friendly and sustainable practices, it’s difficult to ignore the fact that these three companies have had a largely negative environmental impact, as they have been among the world’s top plastic polluters for six years straight since Break Free From Plastic began performing their brand audits in 2018. The 2023 audit named other top polluters such as Unilever, Procter & Gamble, and many others as they continue their mission to hold the world’s top plastic polluters accountable on an annual basis.
Still, one of the positive impacts of big companies introducing sustainability efforts is that their positions as industry leaders help influence smaller businesses to also take action. In a recent QuickBooks survey, 72 percent of small business owners treated sustainability to either be extremely important or very important. In addition, 65 percent of the surveyed small businesses have also begun to reduce their environmental impact through various ways, such as recycling, using renewable materials, implementing virtual instead of physical meetings, sourcing materials locally, and many others.
Eco-friendly packaging is perhaps the most relevant manifestation of sustainability for CPG brands. From using different materials to reusing and recycling, there are a variety of ways in which CPG brands can become more sustainable.
Key Trends in Eco-friendly Packaging for CPG
Around 78 percent of US consumers say that a sustainable lifestyle is important to them. In terms of packaging, this growing demand for sustainability presents an opportunity for brands to innovate and rethink how they present their products. From utilizing recycled materials to adopting biodegradable options, brands can choose between various ways for them to align their packaging practices with the eco-conscious preferences of today’s consumers.
Compostable and Biodegradable Materials
For brands looking to get started in sustainable packaging, utilizing biodegradable and compostable packaging materials is one way to go. There are a variety of sustainable materials that are used in compostable and biodegradable packaging, each having their own source and unique properties.
- Hemp: Sourced from a cannabis plant and is highly biodegradable, resilient, and versatile, the downside to hemp is that it’s not a very affordable source for bioplastics and is not commercially available.
- Paper: Perhaps one of the oldest forms of compostable packaging, paper can biodegrade easily and can be recycled efficiently, but does not provide as much protection or sealing as other materials.
- PLA: Polylactic acid or PLA is a bio-material that can be molded. However, it is a slow composting material even in an industrial composter.
- Cellulose: A plant-based material that degrades fairly easily and is good for short-term packaging, but does not provide proper protection for food products as it easily discolors.
- Seaweed: Seaweed is highly biodegradable and good for short-term packaging, but is relatively unstable compared to other options, which makes it unsuitable for food packaging, transport and storage.
The key advantages of compostable and biodegradable materials stem from their positive impacts on the environment. Biodegradable materials, for instance, reduce reliance on fossil fuels and energy, decompose more readily than conventional packaging, and do not leave behind harmful pollutants, whereas compostable materials offer the added benefit of waste reduction since they can be broken down in compost systems, enrich the soil with nutrients, and are versatile enough for use in products like shopping bags, disposable utensils, food packaging, and many others.
As food as these alternatives may be, however, they do still have some downsides in the bigger picture. For example, the production of biodegradable materials can sometimes be resource-intensive, sometimes mirroring the environmental footprint of traditional plastic packaging. Moreover, despite their biodegradable nature, many of these materials could still fail to decompose in landfill conditions. Nevertheless, they provide more merits than disadvantages compared to traditional plastic packaging, which makes them worthwhile options for brands who want to get started with sustainable product packaging.
Reusable and Refillable Packaging Systems
According to the United Nations, refillable packaging and similar solutions can reduce global plastic pollution by up to 80 percent. With 74 percent of consumers having expressed interest in purchasing products in refillable packaging, many leading brands have started working on delivering such alternatives to traditional plastic packaging.
Unilever, for example, are selling pre-filled containers and their refills both online and in stores. This is not only very convenient for customers, but is also a great way to minimize single-use packaging and reduce plastic usage. However, despite it being a good solution when it comes to cleaning and other liquid products, it may not translate as well to other goods. Brands are also starting a “no packaging” solution–in Indonesia, Nestle has piloted self-service refill vending machines for their Koko Krunch and Milo cereals, which became popular in its own right.
These packaging systems will of course, not gain the traction or any amount of success without the consumers, which is why they must be educated about the importance of reusable packaging. Brands can also give consumers incentives for choosing reusable options to encourage such behavior.
Innovations in Recycling and Upcycling
A lot of exciting innovations are on the way that will help the realm of sustainable packaging in the future as scientists and engineers are using nature as a start-off point to develop advanced materials that are both strong and sustainable. A good example of this is taking inspiration from the structure of spider silk, a material that is strong yet lightweight.
Smart packaging, on the other hand, can provide consumers and recycling facilities information about the product’s recyclability and disposal instructions through QR codes, RFID tags, and NFC chips. These features can help with managing the supply chain by monitoring product freshness and quality, thereby reducing food waste.
In the next decade, the aim is to adopt a circular design principle where packaging will be designed with an end cycle in mind so that it will be easier to disassemble and recycle. “Take-back” programs will also be adopted, where consumers can return used packaging for recycling or upcycling.
Advanced sorting and recycling facilities sorting and recycling facilities will be able to process a greater variety of materials, including complex multi-material packaging. Chemical recycling will eventually be more efficient, which will allow for valuable materials to be recovered from plastic waste.
The Impact of Regulations and Policies on Packaging
There are plenty of regulations across various countries that have begun to make strides in sustainable packaging. The UK Plastic Packaging Tax or PPT, for example, imposes tax on any manufactured or imported plastic packaging in the UK with less than 30 percent recycled plastic. This is to encourage brands to use more recycled plastic for the packaging and, in turn, increase the demand for recycling plastic waste.
Similar to the UK PPT, Australia’s Packaging Covenant, which applies to “all packaging that is made, used, and sold in Australia,” wants packaging to have an average of 50 percent recycled content by 2025. The rest of its sustainability goals, however, are more ambitious. Other than increasing the amount of recycled content in packaging, the Australian Packaging Covenant Organisation (APCO) also seeks to have 100 percent reusable, recyclable, or compostable packaging and 70 percent of packaging to be recycled or composted within the same timeframe.
It’s important to note that different areas in the world choose to focus on different aspects of sustainable packaging. A good example would be the largest e-commerce market in the world, China, who has targeted regulations on e-commerce packaging to reduce waste and leakage. Areas such as North America and the European Union, on the other hand, target beverages for around 50 to 60 percent of their regulations, whereas Latin America and the Middle East focus more on food packaging.
Regardless of how authorities approach these regulations, they are unified in one goal, which is to foster a shift towards more sustainable packaging practices. Of course, brands who adapt to these regulations not only comply with legal requirements; they also position themselves as leaders in sustainability, potentially gaining a competitive edge in an increasingly eco-conscious market. Nevertheless, the path to sustainability is not without its challenges.
Challenges and Considerations
Due to various factors such as the sourcing of materials, less-established supply chains, and manufacturing processes, cost is the number one barrier in implementing sustainable packaging solutions, especially for smaller businesses. In addition, issues surrounding cost do not end with the production of sustainable packaging alone; extensive research, which involves extra costs, is also needed to actually develop them. Nevertheless, despite the higher upfront costs, businesses should also consider the funds that they’ll be able to save due to reduced waste management, incentives from suppliers, and other factors. Taking a long-term view of such expenses could help businesses reach a more favorable stance.
This leads to another challenge: consumer expectations. Although it was mentioned earlier in this article that many consumers are willing to pay extra for sustainable packaging, brands need to be able to raise prices in accordance with higher production costs without overvaluing their products. Otherwise, consumers may still end up choosing less sustainable alternatives that are much more affordable.
Lastly, ensuring that sustainable packaging can (1) effectively protect goods and (2) last long enough to be stored in shelves may prove to be difficult. Compared to traditional plastic, materials used for sustainable packaging can sometimes be too fragile or have negative impacts on various products–not to mention that they could break down when stored in shelves for long periods of time.
These challenges make it all the more difficult to convince businesses to opt for sustainable packaging, but with enough encouragement and support from both consumers and regulatory bodies, businesses will be able to find viable solutions to overcome these hurdles. After all, as public awareness grows and consumer preferences continue to shift towards eco-consciousness, the expanding market for sustainably packaged goods will expand, thereby justifying the initial investment through increased sales and customer loyalty.
Conclusion
The shift towards more eco-friendly packaging solutions in the CPG industry is becoming increasingly more important over time. The rising consumer demand for sustainable packaging, coupled with the urgent need to address environmental issues, has caused businesses to reconsider how they package and present their products in the market. Given the influence of industry giants and the proactive actions taken by regulatory bodies, sustainable packaging could become the standard in the foreseeable future.
Despite the many challenges faced by businesses, the momentum towards eco-friendly packaging is undeniable. As the industry continues to evolve, the collective efforts of businesses, consumers, and governments will be critical in shaping a more sustainable future for packaging.
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