Many advances in packaging have been made – but is there more that can be done? What innovations are on the horizon to make packaging more environmentally-friendly still?
Packaging has become an increasingly significant issue in the office supplies sector – and in business in general – in recent years, with a drive to make it more environmentally-friendly.
In the past few years businesses of all shapes and sizes have made incredible inroads into a more sustainable future; from plastic-covered products to polystyrene-filled boxes, more of our goods are arriving in biodegradable, recyclable and reusable packaging. But with e-commerce predicted to almost double in size over the next three years, are we ready to take things to the next level?
The solutions are out there. Mushroom-based void fill and boxes made from sugarcane – there is a burgeoning business in making more sustainable packaging solutions. However, these innovative products come at a cost – will it pay off in the long run? On the flip side, governments around the world are bringing in increasingly restrictive legislation in relation to waste, many of which will carry financial implications for non-compliance. Does this mean the alternatives will become more attractive?
A growing problem
What the world has been through over the past few years has changed the way we do business with our customers. Online shopping and e-commerce has been a growth market for some time, inflating from a value of $1.3 trillion in 2014 to $3.3 trillion in 2019, according to research from Statista. The pandemic stuck the proverbial rocket up that market, with shoppers seeking to avoid crowded high streets and businesses operating from workers’ front rooms.
In 2020, the market was worth $4.2 trillion; by the end of last year it stood at $4.9 trillion. As more people get online, and tech-savvy generation alpha mature, e-commerce is projected to balloon by another 50%, reaching a market value of about $7.4 trillion by 2025.
It’s not just B2C that’s being impacted either. A report by Digital Commerce 360 showed that online sales in the B2B market had increased by almost 18%. It pegs the valuation of the B2B e-commerce market at $12 trillion in 2021, with projections that it will grow at a rate of 17.5% between now and 2027.
How this links with sustainability shouldn’t be too hard to pin down; at every stage of the supply chain – from the biggest manufacturer to the smallest supplier (and even to the retail customer) – products now need to be packaged in a way that ensures they survive transit. That means more boxes, more bubble wrap – and more waste.
However these additional pressures have not seen businesses charging headlong into unsustainable practices – not the majority, anyway. Discussions around environment, social and governance (ESG) targets are high on the agenda of many a board meeting, and NAVEX asserts that more than 80% of businesses have a formal ESG programme in place. Sustainable packaging is only one part of the ESG landscape, but it’s an important component that is only going to become more pressing as time goes on.
Innovation underway
Innovation in this sphere are widespread. Objectives focus on reducing packaging weight and volume, eliminating toxic additives and reducing the energy consumption required to produce materials. For dealers and suppliers alike, the hard work has already been done, as a whole host of revolutionary solutions already exist to improve packaging strategies.
There’s been a huge shift from using bubble wrap and air pockets to fill voids towards using packing paper instead; it’s recyclable and compostable, making it easy for the recipient to make good choices at the end of its cycle. Added to this, companies are being encouraged to use boxes that are more appropriately sized for the product, reducing the need for void fill. Perhaps we’re finally going to see the end of Amazon shipping a memory card in a shoe-box-sized carton?
Plant-based packaging is becoming more mainstream, from bioplastics that are designed to biodegrade to mushroom mycelium – purported to be a suitable replacement for traditional polystyrene. Sugarcane bagasse, a pulpy residue left over from crushed sugarcane stalks, has proven to possess qualities suitable for conversion into paper, cardboard and even plywood and there are innovations underway using seaweed, coconut husk and even the shells of shrimp.
Dr Liz Wilks, European director for sustainability and stakeholder engagement at Asia Pulp and Paper, is clear about how its food packaging technology aims to meet the objectives of businesses looking to be more sustainable. “APP has launched a plastic-free, biodegradable and compostable food packaging paperboard solution. The paperboard uses an innovative nano aqua-dispersion coating technology, replacing harmful petroleum-based and plant-based plastic coatings. The plastic-free solution ensures the offering is both compostable and recyclable.”
Increased sustainability, reduced reliance
All this additional e-commerce has led to a rather unusual problem – a shortage of cardboard. Mark Sutton, CEO of one of the biggest makers of the material, International Paper, has described the supply chain as ‘very stretched’. “What we’ve got is a fair amount of demand and orders but an inability to get it made or get it shipped,” he says.
IP is not the only firm smarting from the lack of cardboard supply. By this time last year, businesses had reported a tenfold rise in the price of cardboard boxes since the start of the pandemic. Stockpiling, disruption at borders and the huge demand from online retail giants like Amazon have been blamed for the shortage and, although things are starting to ease in some parts of the world, experts predict it will be some time before supply and demand really balance out.
Nicole DeJoris, president of Illinois-based Pinnacle Packaging, says that the problem is far from over. “There is still a cardboard box and paper shortage. The perfect storm continues. There are only a handful of paper mills, shopping habits have changed, it’s easier to shop online, brick and mortar stores are closing, and it’s easier than ever to return items purchased online.”
However, the cardboard fight back is already well underway. Reusabox, for example, offers companies the chance to sell unwanted cardboard boxes so it can provide once-used boxes to businesses as an alternative to brand new ones. With their highest-quality boxes, Reusabox even offers to pick up the same box and redeliver it to the customer, letting them keep using the same material over and over again.
Reusabox provided once-used boxes to an online retailer at a cost of 50p per box, compared to 80p for a new one. Over a year the retailer saved around £72,000 and more than 1,700 trees, and diverted 28 tonnes of cardboard from landfill.
Other initiatives target cardboard repurposing to make the most of it on its first cycle through the supply chain. UK-based HSM sells a range of shredders and compressors to make cardboard management simpler, and one of its most innovative products sees cardboard waste turned into usable packaging material. The ProfiPack punches and embosses a pattern of slits and quilts into waste cardboard pieces, turning it into strong, padded packaging mats that can be used as protective void fill.
“At HSM, we have seen a 600% growth in 5 years for these products, much of which was during the pandemic as business moved substantially online and organisations were looking for more environmentally-friendly packaging solutions,” explains Mark Harper, head of sales at HSM. He adds that, for some suppliers, return on their investment in the ProfiPack tool can be achieved in a matter of months, depending on specific circumstances.
Financial impact
This RoI will further increase in 2023, when the UK implements its extended producer responsibility legislation which could cost businesses £2.7 billion in its first year if they don’t take the necessary steps to reduce non-recyclable content in their packaging. The government’s plastic packaging tax, introduced in early 2022, places levies on any packaging material made in, or imported to, the UK that is not composed of at least 30% recycled plastic; the EU implemented a similar rule in 2021 and the US Congress is mulling over a proposal for similar legislation.
A study by McKinsey found that, at present, 83% of legislation relating to sustainable packaging focuses on plastics, and that approximately 45% of these use taxes, fines or fees as a mechanism for ensuring compliance. “We observe three things happening in the market today,” observes Liz Wilks. “The first is that consumers are demanding sustainable products. Secondly, governments around the world are implementing new plastic-free/sustainable packaging legislation. Thirdly, global brands must adapt and change their procurement to meet consumer and regulatory demand for sustainable options. The market has changed – and will continue to evolve; solutions are needed today.”
Of course, the financial impact goes both ways. While businesses may be penalised if they don’t embrace sustainable packaging, they could also see investment in this type of technology as a penalty in another sense – but does sustainable packaging really cost more?
Research by Raconteur found that 43% of businesses cited cost as one of the biggest challenges in the switch to more sustainable packaging, and other studies have claimed that implementing sustainable packaging could cost between 1% (for B2C retailers) up to 25% for specialist packaging suitable for items such as food.
However, while there are certainly costs to consider, particularly when transitioning from non-sustainable to sustainable solutions, in the long run, Liz Wilks believes the investment will pay off. “Surveys have shown that consumers are willing to pay a premium for products that include sustainable packaging; this should offset any costs at the retail level, and should help brands and retailers to opt for such sustainable options.”
From future-proofed protection from taxes and levies, to reduced reliance on finite resources, getting fit for the future is a clear priority for the modern supplier.
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