How the whole sustainable picture is evolving...
Jim Chrzan
What I have seen so far: One marketing research study claims consumers "get it" and are looking for
green solution. And will pay more...
The next study you read says sustainability is not understood, and might be a tie breaker at purchase, if all other functional needs are met. And the consumer expects the manufacturer to pay.
It seems to be a very elusive market segment, particularly as times get tougher.
Early on, most solutions were not cost-effective and therefore rejected. Now, most are focusing on an
internal review of manufacturing and supply chain (of both product and package) in order to achieve efficiency--and cost savings. (Not shipping air, for example.)
I am starting to believe the entire movement will get boiled down to "we're making it, shipping it and
disposing of it more efficiently." And the entire cost will be absorbed by the CPG company.
Think food safety or drug efficacy. I'm not paying extra for it, these are the things you have to guarantee me in order to get me to buy your product in the first place.
Am I missing something, or this is all coming down to common sense measures we all needed to adopt, but sustainability happened to be the lens that made it clearer?
Also, trends follow the bell curve. The public will get sick to death of "Green."
Thanks for any and all comments..
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Who Pays
Robert Lilienfeld
I agree with you. CPGs will pay, but ultimately so will consumers as the costs will be passed on to them through higher prices.
I also think that today's green will be tomorrow's normal expectations for consumers. Sustainability is simply the nom du jour for environmental efficacy. Unfortunately, as the economy improves consumers will stop being as concerned about environmental issues. This concept has been tested many times in the past. When people are upset, they get upset about everything. The reverse is true for good times.
Sustainable, while maintaining margins
Michael Larocca
I believe that CPG companies will continue to make slow, strategic moves towards more sustainable products and packaging, when but only when costs to do so are neutral or reduced. The majority of U.S. consumers won’t accept a premium price for a sustainability claim, especially if they don’t fully understand or believe it. We know that sustainability and cost savings don’t always align, and increased costs for more sustainable materials will ultimately be passed onto the consumer. With private label products becoming more popular, I don’t foresee many CPG’s taking the risk of increasing prices or reducing margins for name brand products. I think this is especially true for public companies which face Wall Street challenges to maintain margins on their brands. I think that smaller, private companies will continue to push the envelope of sustainability since they don’t have the margin requirements of public companies. Overall, this effect should progress the sustainability movement as big companies try to “crack the code” of becoming more sustainable, while containing costs.
sustainable evolving...
Pamela Long
GREAT post Jim. I am in the camp of "green is passe" as a point of difference. In my opinion, it's quickly becoming a cost of entry. And I also don't believe that for companies, green can be about doing something good. That will probably be a result, but shouldn't be the impetus. When corporate America considers sustainability a powerful business strategy, a way to innovate, optimize and improve the bottomline, that is when we are going to see the greatest positive impact for our world and our environment.
You may want to check out "The High Purpose Company" by Christine Arena. It's an excellent book speaking to corporate social responsibility and how companies that live their purpose come out on top. The most profitable companies are those that return to the essence of who they are and the need they fill. When sustainability is looked at through this lens I believe companies can benefit the most and at the same time do the greatest good.
Policy matters, too
Rita Schenck
It is interesting that here in the US, sustainability is viewed as voluntary, while in Europe and elsewhere is it is a matter of law. Consider the packaging take back regulations in Germany. When you buy something at a store there, you can remove the packaging and leave it at the checkout counter. There is a "zero waste" law there, too, where all landfills will shortly be closing down. Everything has to be recycled, and everything not recycled will go through a waste-to-energy facility.
Variations on this theme exist all over Europe. Softdrinks must be sold in refillable bottles. Extended Producer Responsibility laws require the takeback not only of packaging but of the product itself at end of life.
Laws like this are coming in to many states. Washington has an electronics takeback law-- where recycling is paid for by the CPGs. California is currently considering an even broader extended producer responsibility law. It is only a matter of time until these will make their way into federal law.
Maybe when it does, we won't have any more complaints about whether it costs more, because the environmental costs will be internalized for everyone. The smart companies will be looking at their packaging systems now to make sure that they are ready for takeback.
Excellent points...
Jim Chrzan
If it revolves around efficiencies of supply chain and means the difference between staying in business or going under, it will not be voluntary.
Rather than mandated by law, the market itself demands these better business practices, insuring sustainability its place in the mix.
By the way, I have just heard some of the "leave your package at the door" tests in the U.K. have been cancelled due to lack of participation.
http://www.telegraph.co.uk/earth/earthnews/3294405/ASDA-drops-excess-pac...
Excellent discussion.
How the whole sustainable picture is evolving...
sean sabre
I remember a few years ago when sustainable packaging was cutting edge rhetoric within smaller circles and the Wal-Mart scorecard was a gleam in someones eye. I recall just how difficult it was to find organic foods (milk, eggs, meat, etc) at the supermarket and green household cleaners, paint, etc in the DIY chains and now these products are replacing more and more conventional product shelf space. While hybrid cars and renewable energy aren't moving at the pace we all like I don't beleive that consumer habits along this front as quite as fickle as the previous posts have eluded to ... and definitely not a temporary state due to a slowing economy. We have a come along way in the past few years and those of you who attended the Sustainable Packaging Coalition event in Chicago last month would remember the European ogranization INCPEN stating just how quickly the US is catching up with Europe regarding all things sustainable.
Take a peak at ISO 26000 launching next year and you have to concede that CSR is not a fad either. When you throw in the Dow Jones Sustainability Index on top of it you will see that even if consumer habits are wanting, the investing community is evolving along this front as well and will be placing additional pressure on firms regardless of whether they "get it" or not.
Whether you are working in the LEED space, agribusiness, automotive or packaging you can't afford to sit back and assume this is going to slow down - ever. If you are one of our competitors we hope you do.
Evolving sustainability
Claudia Kreiss, Kreiss Communications...I don’t think consumers, who are human beings, not consumption machines, will become “sick to death of green”, though they may become cynical if CPGs are not authentic and transparent in their green efforts and claims. Green means much more than recycling to people. Sustainability and “going green” have permeated the American consciousness, especially among vast numbers of young people who want it to be a way of life, and who seem to be saying with their voices and actions, 'we're all in this together, now let's get down to work for our good and the benefit of everyone and the planet.'
Green WashOUT
Thomas Oris
Green washing will take its toll on the consumer unless some guidelines are not only put in place but ENFORCED! The overwhelming number of "green" claims have consumers either fooled or confused, neither of which is considered good for the sustainable movement in general.
I, along with many others, are more about substance than "flash". Bottom line, real talk is what is needed. Keep it simple stupid is not bad in this situation. Lets take a look at some examples:
Biodegradable - sorry, but this is mostly a farce, at least in North America. The US FTC states something biodegradable should do just that within TWO years. Under this definition, and considering that landfills are the main means have disposal (and this is a mumification process), I can't think of much if anything that is "biodegradable). Newspapers don't biodegrade in landfills.
Recyclable - the sad truth is in the United States, less than 25% of PET bottles that could be recycled actually are. So while many forms of packaging technically could be recycled, most are not and end up in a landfill.
As mentioned in another post, we need some level of government regulation, and as I have stated it needs to be vast, strong, enforced and consumers need to not only take an active role, but be educated as to why "drastic" measures need to be implemented/mandated.
We have regulations on gas mileage for cars, we have efficiency standards for appliances, we need clear and concise legislation to not only recycle at a higher rate, but establish more MERF's, and recycled (at least for now) PET and paper, with the potential to expand as technology presents itself.
Bottom line: CLEAR, HONEST COMMUNICATION TO CONSUMERS!
Why the consumer is confused
Barry Sanel
Jim,
Great post, I think the consumer is being inundated with concepts and green icons on packaging that are confusing them and this subject.
Here is an excellent supporting article by Gwendolyn Bounds in the Wall Street Journal: As Eco-Seals Proliferate, So Do Doubts
I am in support of expanded bottle bill laws that encourage recycling by material and not by market.
I think the answer really is It Depends
Adam Pawlick
I think when you are looking at all these consumer research studies and the results they give, while they seem counter to each other, they are actually all correct (as odd as that sounds).
You have to be very cafeful when looking at these independant studies looking at a broad and sweeping topic like caring about the environment and sustainable packaging. I have seen studies done by very reputable firms that report back things like "98% of all consumers care about the environment." That number is correct when you do the math on their numbers, unfortunately the question that they asked is "Do you care about the environment?" Who really is going to say "no" to that question. The more relevant question would have been "Do you care enough about the environment to pay more for a product that has a better environmental impact?"
The other reason that these studies can contradict eachother but still all be accurate is because they don't give a breakdown of who they had asked. If you take the same study to a Whole Foods versus a Wal-Mart and ask the average consumer you will get vastly different answers. If you target specific LOHAS consumers versus the average American consumer you will get vastly different answers. If you ask people in Boulder, CO versus people in Detroit, MI you will get vastly different answers.
The best learnings to take away from this is awareness of environmental impact is growing. There isn't a silver bullet in terms of marketing any more than there is a silver bullet in terms of technology. Each company, each brand has to identify their opportunity, how do they tie sustainability into the DNA of the brand (which can be very obvious or take a lot of creativity), does their core consumer care about sustainability (and can they afford to care), and what value does it bring. In very rare cases you may be able to charge more, but that will be the exception to the rule, mostly on niche items (think in similar terms to organic foods, certain items work, but they are lower in volume and work especially well in specific markets, but a vast majority of items in mainstream retailers would not be able to command a price increase due to organic). For most items you will not be able to charge more, you will have to find ways to financially justify it (yes we lower margins, but we increase brand loyalty, steal share from competitors, get positive press, make our customers happy, improve line efficiencies, etc).
So the very short answer is.....it depends.
We cannot get sick of "green"
Anonymous...We cannot get sick of "green" (maybe only of the name), as we cannot of safety. These concepts are here to stay, to develop a better quality life, primarily food.
How the whole sustainable picture is evolving....
Narendra Srivatsa...Don't expect consumers to pay for it. Plenty of data in the office papers arena where recycled papers do not command a premium and is the cost of doing business. The broader market does not want to pay any more. They will support the adoption through increased vocalization of the need.
COP Vials
leena
can you tell me about the tests conduted for COP vials as per the US and Europe Guidelines.
Desiccant foil
suresh
Pls send me the detailed technical information about desiccant foil and tests for that foil.
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