Paul’s Blog

Or should the question be what is recycled?  I am learning that the answer to this question is a  subject of much controversy as the system in this country is not aligned with the aim to support more sustainable packaging.

Let’s start with what the US Federal Trade Commission considers to be recyclable.  The Green Guides, otherwise known as US Code 16 CFR Part 260, define a recyclable package as one that can be collected, separated or otherwise recovered from the solid waste stream for reuse in the manufacture or assembly of another package or product, through an established recycling program.  The common interpretation is that for a package to be considered recyclable, there must be a recycling system for the package available to a majority of households.

According to the US Environmental Protection Agency, we Americans recover about 46% of the solid waste collected.  Of this, about 70% gets recycled or composted.  A total of 61 million tons was recycled in 2008.  The recycling rate, by product, is shown in the following chart.  The data shows that where there is legislation (batteries, beverage containers, tires) or economic benefit (office papers, steel cans, yard trimmings), recycling is predominant.  While this is not surprising, I am left asking what about all the other packaging that can be recycled?

Consumers understand recycling much more than they understand other terms such as compostable, biodegradable and sustainable.  Over and over again, it has been shown that when consumers are asked which package is more environmentally friendly or sustainable, they pick the package that is made of paper because they know that is recyclable.  While some will argue that paper-based packaging is not ideal for all situations, I can tell you that paper-based packaging is rising to the challenge. 

Consider the case of the pet food bag.  Is it recylable?  The answer really depends upon whom you ask.  Your local recycle coordinator may say yes or no, but is hard pressed to explain the facutal basis for their response.  Ask the local waste reprocessor and they will say yes, we send them off as mixed paper every day.  Your regional recycled paper mill will most likely give you the same yes.  The truth is that in the US, nobody really understands the ability of the waste system to recycle packaging materials.  If it is not corrugated, a #1 or #2 bottle, a can or glass, it is likely to be perceived as not recyclable by experts.  Fortunately, business people are finding ways around the experts to recycle these valuable materials.  The dirty little secret is that our local governments are working against recyling as they try to protect the income that they derive from landfill tipping fees.

So, in order to bring this to a close, here’s my dilemna.  I am bringing to market a new pet food bag that is made entirely of paper.  In other words, there is no film liner.  Put a check mark next to mono-material as that improves its recyclability as paper.  The bag is designed to contain pet food and thus will have traces of oils and product in it when discarded.  Is it recylable?

The truth is that it all depends on your perspective.

If you step back and consider the whole packging system, you can find many opportunities to save money with more sustainable packaging.  This is because there are costs beyond the package that can be reduced with more sustainable technologies.

Consider waste for a moment.  Why do you think that companies have adopted the goal to become zero-waste generators?  It is simple: waste costs money.  There are fees associated with disposing of waste.  There is value lost in waste.  Savings (money) can be derived from either eliminating waste or recovering and reusing the waste material.

So how big is this potential profit pot?  Consider for a monent that about 30% of the municipal solid waste that is landfilled each year is packaging waste.  Paper, plastics and glass are the largest components.  In 2007, the Census Bureau published that the waste collection, treatment and disposal industries totaled %54 billion in annual receipts. 
A quick calculation provides a potential gain of $15 billion by eliminating landfill waste from packaging.

One of packaging’s primary purposes is to prevent product wasteage.  A fully reasoned argument for the sustainability of a particular package must include the GHG associated with product wasteage.  Most sources agree that the GHG associated with a particular package represent 10% to 15% of the product’s total.  A change in packaging that reduces product wasteage can significantly impact the overall sustainability of the packaging system and generate savings for the packager.

So, why is there the perception that more sustainable packaging costs more?  Because, with today’s technology and the scale of some of the developments, it does cost more to produce a more sustainable package.  Collecting, cleaning and sorting materials in the recycle streams requires capital, materials, energy and labor.  New materials are just developing and have not reached full economies of scale that the virgin producers enjoy.  The additional cost of producing more sustainable packaging must be offset by savings throughout the total package lifecycle to assess the true cost of the advancement.

OK, that’s four separate questions.  I get it.  They are all, however, related and relevant.  Let’s look into each one.

I prefer to start with the second question - does the consumer understand what sustainable means?  There is some evidence that the consumer favors two legs of the three-legged stool.  Recent research published by the Produce Marketing Association (PMA) found the top eight issues of consumers were all social and ecological (environmental).  So how will the businesses be able to support all these social and ecological aims of the consumer?

When it comes to educating the consumer on sustainable packaging, there appear to be a multitude of approaches.  The approach appears to be aligned with the consumer type: price vs brand buyer, organic vs gourmet buyer, etc.  Recently, Whole Foods partnered with Preserve and Stonyfield Farms to create a recycle stream for #5 yogurt containers.  Clearly, the consumer understands recycling and has demonstrated its willingness to participate in recycling programs.  Some manufacturers are experimenting with carbon labeling to attempt to help the consumer understand the life-cycle impact of the product (and package).  With respect to the package, most labeling has attempted to create hype by drawing the consumer’s attention to the materials; recycled, renewable, compostable, etc.  So far, there have been no efforts to really help the consumer make an educated choice about which package or package format is better from a life-cycle perspective.  Is it realistic to expect to be able to educate the consumer?

Now, I will try to tackle the last two questions at once.  These questions really get down to consumer preference.  In general, it is an accepted fact that consumers will show preference for a package that can be recycled.  Craig Ostbo did a very interesting series of interviews in 2008 that showed affluent consumers, shopping in a market of choice (with organic and non-organics side by side), are really confused by all the terminology and only understand recycling.  The Consumer Network did a consumer study in 2008 that showed similar confusion among consumers and a preference for convenience over ecology.

How can we sell sustainable packaging? 

One thought is to make it look like sustainable packaging.  The next time you are in the snack aisle, take a look at the new Sun Chips® bag.  It looks noticeably duller than previous versions and now incorporates some portion of renewable materials.  Think about the concept.  If the consumer likes to recycle, why not give them a recyclable package that looks like it was recycled?  So far, the paradigm for package designers has been to become more sustainable, if possible, without affecting the performance (appearance) of the package.  The target consumer, searching for a package that is better,  is then left without a sure fire way to spot a preferrable package.  Yes, there are limits to how far one can take this approach, but it also presents many new options.

Did this make you think?

You can expect that climate change will become a top priority in Washington over the next few years.  Has the packaging industry’s focus on sustainability addressed the real issue?

Consider this chart, published by the EPA in 2008, that shows GHG generation by category.  If you are as surprised as I am, then you’ll agree that the question is appropriate.

Transportation is second, only to electricity generation, in the production of GHGs.  It eclipses all manufacturing activities by several times.  Therefore, to curb climate change, I believe that our focus should shift to all the opportunities to reduce the demand for transportation.

In the packaging industry, much of our sustainability focus has been driven by the Wal-Mart Packaging Scorecard.  Many have rightly concluded that the metrics in this scorecard are heavily weighted towards the total weight of packaging required to deliver a given amount of product.  Reducing the weight of packaging reduces the fuel required to move the product and reduces the GHGs attributed to the transportation of the product.

There is another opportunity lurking out there.  Much of our logistics system in the North America relies on over-the-road trucks.  Estimates are that 30% or more of the trucks on the road are empty.  That means nearly 1 in 3!  Imagine the opportunities that come with better logistics planning.  Congestion will be reduced.  The remaining trucks will be more profitable.  GHG production related to truck transportation will drop dramatically and this reduction will likely be multiplied by fewer vehicles stuck in traffic jams.

As carbon legislation comes forward, remember that you will be held to account for all the carbon associated with your business.  Transportation in and out will be a part.  It is probably the largest, lowest hanging fruit for you to pick.