Sustainability Trends in the Consumer Packaged Goods Industry
Recent research suggests that sustainability in the packaging business is becoming increasingly important. For Consumer Packaged Goods (CPG) companies weathering the global economic recession, sustainable business practices can help them win points in the marketplace and be a boon economically. The idea that companies should be concerned with their environmental impact, and even actively take steps to reduce their carbon footprint is a relatively recent development. For generations, from the industrial revolution until the rise of the environmental movement in the 1970s, businesses existed only to turn a profit for their shareholders. This attitude evolved over the years to the point where many business leaders felt uncomfortable saying otherwise.
There is a broader way to measure the success of a company. A business must not only make a profit and generate wealth, but also be attentive to people's lives and the environment. There are several questions they will ask themselves: what are the social costs and benefits of packaging? How can we make better contributions to people's well being? How can we reduce the environmental burdens created by inefficient production?
Individual companies are starting to see that sustainability isn't just good for public relations, it is also useful for turning a profit.
In a slow economy, when CPGs can't raise their prices or grow sales quickly, they will look to recover cost savings in other ways. Sustainable practices can help achieve or preserve your bottom line in a depressed economy. The main focuses of sustainability in CPG business and manufacturing operations in the short term will be to reduce energy costs. And the fact is that if companies can reduce their energy costs by 1 to 2 percent per year they can bolster profitability.
They will also look to reduce waste: CPG companies are going to be taking a close look at every manufacturing process to eliminate wasted materials and unnecessary effort. Walmart, for example, has been a leader in reducing packaging waste and has set an overall target to reduce the total amount of packaging in its supply chain by 5 percent by 2014.
CPG companies will make added efforts to re-design their packaging to be more sustainable, while also saving money and improving the consumer experience. For example, Nestle Waters North America has recently announced its next-generation bottle design, which, at only 9.3 grams, weighs 25 percent less than its predecessor bottle. The new design will help exceed the company's goals for reducing the amount of plastic in its single-serve 0.5L bottles by an additional 15 percent by the end of 2010. Nestle's new water bottle also includes a lightweight cap, which weighs only 1 gram.
Efforts like this are becoming increasingly prevalent as companies respond to consumer demands, weather the global recession, and increasingly act as stewards of the people and resources they have been given.
About the Author:
Chris Bekermeier writes for PacMoore Products (http://www.pacmoore.com), a leading provider of contract manufacturing, contract extruding, and turnkey solutions to the global food industry.
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