2 sustainable packaging benefits and 1 challenge to know

Learn how using sustainable packaging can benefit companies in various ways, including to improve brand image, as well as challenges of which supply chain leaders should be aware.

Many companies are attempting to reduce their carbon footprint, and more sustainable packaging is one way to potentially help this effort. Using packaging materials that are recycled, reused or biodegradable can benefit companies in various ways, but switching packaging also comes with some potential challenges, including higher costs.

Some sustainable packaging options include biodegradable paper boxes, cornstarch packaging, recycled plastics, corn plastic, plant-based packaging and organic fabrics, such as bamboo. However, eco-friendly packaging must also accomplish what traditional packaging has always needed to do: protect the product adequately.

Here are some of the ways sustainable packaging can benefit companies, as well as potential problems that supply chain leaders should consider.

Benefit: Sustainable packaging helps reduce waste

Packaging is a major portion of global waste, and plastic pollution is a particularly critical problem.

Kate JakubasKate Jakubas

Using less plastic packaging and more biodegradable material or materials that are themselves made of recycled products can help organizations cut down on their overall waste.

Chicago-based Meliora Cleaning Products sells its laundry powder in reusable cans made of paper and steel, and customers can buy refills of the laundry powder in paper bags, said Kate Jakubas, founder of the company. The product is also available in five-gallon plastic buckets that customers can send back to Meliora so the company can use them again. Meliora encloses a shipping label with the bucket.

The company is currently working to solve one packaging problem, Jakubas said. The organization wants to use a single-material, refillable container for the laundry powder so recycling will be potentially simpler when customers can no longer use the container.

Challenge: Sustainable packaging may increase costs

Supply chain leaders researching more sustainable packaging should prepare other company leaders for the fact that using sustainable materials can be more expensive.

Originally, Meliora Cleaning Products' laundry powder came with a recyclable plastic one-tablespoon measuring scoop, Jakubas said. The company decided to switch to stainless-steel scoops. Each metal scoop costs 70% more than the plastic scoop.

Tszman FisherTszman Fisher

Another company that has encountered this increase in costs is Viori, which makes shampoo and conditioner bars, among other products, and ships its bars in recycled paper.

Viori's packaging costs 20% to 25% more than traditional packaging, said Tszman Fisher, co-founder of the Orem, Utah, company.

Benefit: Sustainable packaging can improve brand image

Increasingly, consumers are choosing one product over another based on its environmental impact. Using more sustainable packaging, and communicating that use to customers, can potentially improve a company's overall revenue.

Products with environmental, social and governance-related labeling, such as "cage free" or "biodegradable," had an average of 28% cumulative growth over the last five years, while products without ESG-related labeling had an average of 20% cumulative growth over the last five years, according to the "Consumers care about sustainability -- and back it up with their wallets" study, published by McKinsey and NielsenIQ in February 2023.

"This study did broadly reveal, in many categories, a clear and material link between ESG-related claims and consumer spending," wrote study authors Sherry Frey, Jordan Bar Am, Vinit Doshi, Anandi Malik and Steve Noble.

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