What is Sustainable Packaging?

I. Overview:

This paper will serve as a brief overview of Sustainable Packaging, the hottest topic
in the packaging industry today. Sustainable Packaging has gained much attention due in
large part to Wal-Mart’s commitment to placing sustainability at the core of its strategy
and corporate identity. In this paper, much industry information is distilled down to a few
pages.

The goals of this paper are to provide a brief overview, make the reader conversant in
sustainable packaging, and to provide insights to our customers who sell to Wal-Mart.
This paper provides a synoptic view of sustainable packaging, primarily because this is a
rapidly emerging market with still emerging technologies. The overview provided here,
like the technologies created by sustainable packaging, will change in the coming
months. With some level of knowledge, we hope our sales professionals can be proactive
with customers, thus elevating, and perhaps securing, our position with them.

Because of its leadership position on sustainable packaging, much of this paper’s

focus will be on Wal-Mart; however, Wal-Mart is joined by other major Global 1000
companies in the sustainability effort. It is believed if you understand Wal-Mart’s goals,
then you will have a pretty good understanding of sustainable packaging and the
challenges it entails.

II. Background:

Big business and environmentalists used to be sworn enemies. Businesses polluted

waterways and air, while environmentalists responded with mandate, regulate, and
litigate. Now those days are mostly over. 1 Today, big companies and environmentalists
are more apt to hammer out partnerships over specific issues. Why? Because there is
money to be made! “The opportunity to provide environmental solutions is going to be
one of the big four or five themes of our generation of business leadership,” Jeffrey
Immelt, CEO of General Electric, told the 25th anniversary dinner of the World Resources
Institute.2

1
Fortune, April 2, 2007
2
Ibid.
1
 Global warming now drives corporate awareness. Over the past 30 years, due to legal
issues and fine incurrence, big businesses cleaned up air and water resources. Today, the
name of the game is less about efficiency, and more about creating a new business model.
Put simply … Sustainable packaging is about meeting our present needs without
compromising the ability of future generations to meet theirs 3. Many companies are
taking up this challenge with verve and it will affect how business gets done for many
years to come. The Dow Jones Sustainability Index was created to track performance of
companies that pay particular attention to sustainability in their operations. It includes
data on ~200 companies. The 2005 report states, “Sustainability factors are increasingly
linked to financial drivers and integrated into Annual Reports.” Of the Global Fortune
250, 64% include a corporate social responsibility account in their annual report.
Financial markets are also paying close attention to sustainability and it is becoming a
critical selection criterion for many financial managers around the world. 4

By definition, Sustainable Packaging:

 Is beneficial, safe, and healthy for individuals and communities throughout its life
cycle;
 Meets market criteria for performance and cost;
 Is sourced, manufactured, transported, and recycled using renewable energy;
 Maximizes the use of renewable or recycled source materials;
 Is manufactured using clean production technologies and best practices;
 Is made from materials healthy in all probable end of life scenarios;
 Is physically designed to optimize materials and energy;
 Is effectively recovered and utilized in biological and/or industrial cradle to cradle
cycles.5

The goal of Sustainable Packaging is to provide superior business solutions that are
economically, socially, and ecologically responsible.6 Responding to the need for a more
sustainable business practice across all operating functions – not just manufacturing -
requires a long-range perspective and a long-term commitment.7

3
Sustainable Packaging Coalition
4
Packaging Strategies, February, 2007
5
Sustainable Packaging Coalition 2006
6
Packaging and Technology Integrated Solutions study
7
Ibid
2
 Sustainability efforts and sustainable packaging programs between the consumer
package goods producer and packaging value chain are directed primarily, but not
exclusively, at:

 Improving how materials, products, and packaging are sourced, purchased,

designed, and produced;
 Reducing energy requirements throughout the product/package life cycle;
 Using renewable and recycled materials;
 Improving manufacturing processes and efficiencies;
 Reducing package size and improving distribution/logistics efficiencies;
 Supporting retailing efficiencies;
 Diverting packaging waste to composting or recycling programs, or designing
products/packaging with cradle to cradle rather than cradle to grave scenarios;
 Minimizing waste at every opportunity in the manufacturing and distribution
cycles.8

As previously stated, sustainability has garnered the interest of the investment

community as well as with socially responsible and sustainable investment portfolios in
the United Sates totaling more than $2 trillion. During the past several years, companies
with sustainable practices have outperformed those companies who do not practice
sustainability initiatives.

Packaging and environmental issues go back more than 35 years as both a challenge
and an opportunity. For many years, companies have tried to avoid onerous regulations
and associated fines that would add costs and potentially constrain innovation while
yielding marginal, if any, real environmental benefits. The cost of compliance is billions
of dollars and threatening to rise higher unless companies demonstrate there is a better
answer than more regulation. Even though fewer than one in five consumers currently
base buying decisions on more sustainable products or packages, market forces are
driving toward more sustainable business practices. Both CPGs and retailers are
realizing that sustainability strategies can lead to lower costs, resulting in improvements
in both financial and environmental bottom lines.

Recognizing this need, members of the environmental movement such as GreenBlue

and the Sustainable Packaging Coalition have developed tools such as MERGE
(Managing Environmental Resources, Guidance, and Evaluation) to help companies in
package and product design. This tool allows for input about packaging components,

8
Ibid
3
size weight, and rates of usage to quickly generate environmental profiles of package
design alternatives. MERGE allows users to readily compare these profiles to each other
or to other packaging options.9 For more information on MERGE, contact SPC at
spcinfo@greenblue.org.

III. Wal-Mart’s Strategy and Goals:

Wal-Mart is leading the way with a reported $58 million already recognized from its
sustainability efforts.10 In February, 2007, 66,000 suppliers to Wal Mart began loading
information into “Wal-Mart’s Sustainable Packaging Scorecard”. Wal-Mart has created
13 Sustainable Value Networks, one focused directly on packaging. These networks will
help Wal-Mart achieve an all encompassing goal of making its stores 25% more energy
efficient; reducing solid waste by 25%, and having 20% of its supply base aligned with
sustainable products, all within the next three (3) years.

Wal-Mart has a list of attributes called the “Seven R’s” that reflects the bottom-line
focus of sustainable packaging:

1. Remove packaging – eliminate unnecessary packaging

2. Reduce packaging – right size and optimized package strength
3. Reuse(able) packaging – pallets
4. Renewable packaging – use materials from renewable sources
5. Reuse(able) packaging – use materials that include the highest recycle content
possible without compromising quality
6. Revenue – achieve all of the above at cost parity or cost savings
7. Read – packaging suppliers can provide a link to a web site or contact to get
more information

Rankings in the following categories of Wal-Mart’s Scorecard will show suppliers how
well their packaging stacks up against the competition in terms of:

1. Greenhouse gasses emitted during manufacturing

2. Environmentally friendly materials
3. Product-to-package ratio
4. Cube utilization
5. Transportation impacts
6. Recycled content

9
Packaging Strategies, February, 2007
10
Ibid
4
 7. Recovery value
8. Renewable energy used
9. Sustainable innovations

It’s important to note two key points in the Wal-Mart packaging scorecard:

1. The scorecard is based on a life cycle review of a sustainable package – from

raw materials to conversion, transportation, and disposal/recovery.
2. There are no mandates.

These two facts mean that CPG companies can pick and choose at what points along the
life cycle they want to apply innovations – innovations that make sense from a business
perspective.11

At the 2006 Clinton Global Initiative, Wal-Mart committed to three core goals:
 To be supplied 100% by renewable energy
 To create zero waste
 To sell products that sustain our resources and the environment12

As Wal-Mart views packaging initiatives, their actions are framed in the context of the
7R’s above. They include:
 Reducing solid waste from U.S. stores and clubs by 25% within the next 3 years.
o In 2008, Wal-Mart achieved a baseline of 55% of the waste generated by
stores, clubs, and distribution centers being diverted from landfills.13
 Working with suppliers to create less packaging overall.
 Replacing some packaging of Wal-Mart private brands with alternatives that are
more sustainable and recyclable within the next two (2) years.
 Replacing produce packaging with PLA film for cut fruit, strawberries, herbs, and
Brussels sprouts.
 At some Wal-Mart stores, recycle plastic that used to be thrown away by
consumers.
o Today, more than half of Wal-Mart’s Seiyu customers in Japan use reusable
bags.14
15
 Wal-Mart has also surpassed its goal of its fleet being 25% more efficient .

11
Packaging World, February, 2007
12
Wal-Mart 2009 Sustainability Report
13
Wal-Mart 2009 Sustainability Report
14
Ibid
15
Ibid
5
IV. The Sustainable Packaging Coalition’s Summary of Sustainable Materials:

 Flexible packaging materials viewed positively as a method of reducing the

amount of packaging used. Seen as a good alternative to larger, bulkier packages.
 Wal-Mart also has a published list of “preferred materials” list and “less desirable
materials”. LDPE, HDPE, PP, and PLA films are preferred materials.
 Flexible packaging materials offer infinite combination possibilities; however, use
of flexibles raises concerns about use of non-renewable resources.
 While there are many different design possibilities with flexible packaging,
drawbacks to this material include that fact that secondary packaging is usually
required for shipping, stacking strength, displays, and shelf stability.
 Combination materials also face a drawback in that the materials are nearly
impossible to separate, thus making recycling nearly impossible.
 Glass, rigid containers, and paperboard products all face similar constraints in
their use. The advantages of each packaging method must be weighed against
possible concerns when designing packaging solutions.
 Effective packaging must meet a long list of requirements starting with preserving
the quality of the contents and ending with disposal that is as sustainable as
possible.16
 Bioplastic resins still have issues with price parity and performance criteria vs.
traditional materials. Creating biopolymers is a microbiological process and it
will be difficult to increase production rates. Currently, the largest production
plant is less than 10% the size of a typical polymerization operation; not much
larger than a pilot plant.17 However, as biopolymers are in their infancy, these
factors are expected to change.
 Actual environmental benefits of biopolymers are not always as good as might be
expected. A complete sustainability system estimate should be made before
simply converting to a new biopolymer product.

16
Packaging Strategies
17
Ibid.
6
 Advantages and Sustainability Concerns for Paper and Paperboard

Advantages Sustainability Concerns

Renewable feedstocks Potential loss of habitat; watershed
Good physical properties Physical properties affected by moisture
Good printing surface High water consumption
Readily recyclable Energy consumption
Can use high levels of recycled fibers Air and water emissions
Readily combined with plastics and Coatings/laminations may be less
aluminum for optimizing properties recyclable
Low cost Poor barrier
Source: Packaging and Technology Integrated Solutions, LLC 2006

V. What Is the NuVision Packaging Approach?

 Work with customers to make sure that we are aware of any sustainable goals that
they may have.
 Educate our customers.
 Continue design efforts incorporating the 3 R’s – Reduce, Reuse, and
Recycle. These are still important components of a sustainable packaging
strategy. Add the 4th “R” – Recycled materials where possible.
 Make sure that customer goals and strategies for sustainability are grounded in
triple bottom line thinking, value chain considerations, consumer value and
benefits, metrics, and competitive considerations.
 Include converters and basic material producers in the conversation. Know the
sustainable packaging product manufacturers.
 Use relevant metrics – it’s important to know what constitutes success for the
program.