The Perfect Amount of Packaging

Tags: Retail, Supply Chain Management, Packaging, Retail Logistics, Supply Chain, Sustainability

Sustainable packaging helps shippers' bottom line and brand as well as being easier on the environment.

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Do you really need all the packaging you've used?

That's one of the top questions in Walmart's Sustainable Packaging Playbook, which the retailer introduced in 2016 as a guide for vendors, private-label manufacturers, and packaging suppliers. Walmart designed the guide to improve suppliers' sustainability index score, a metric the company created to track suppliers against. But it should also help reduce the cost of goods for both supplier and retailer, says Ashley Hall, Walmart's senior manager of sustainability.

The move is part of the retail giant's across-the-board commitment to sustainable packaging, which generally helps cut supply chain and logistics costs, Hall says.

In fact, shippers often find a win-win relationship between logistics and sustainable packaging. One of the Playbook's best practices, for example, asks suppliers and manufacturers to ensure their packaging is recyclable. These companies often find that when they redesign their packaging for recyclability, they cut out unnecessary material, optimizing cube use in the bargain.

"Walmart has been doing that for a long time, even before it was called sustainability," Hall says. "We've been as efficient as possible with packaging."

With benefits such as weight reduction, more products per container, and more containers per shipment, sustainable packaging has become so top-of-mind for shippers that it has moved from the transportation and logistics department into the C suite, says Marc Bevilacqua, senior vice president of global packaging at OIA Global, a Portland, Oregon-based global third-party logistics provider.

Over the years, many companies—particularly those in retail and food, who operate at razor-thin margins—have found that sustainable packaging drives energy savings, which equals an economic savings.

The OIA Optimization Program helps enterprises find these savings through solutions such as a high-performance corrugated cardboard, which is as strong as the standard corrugated cardboard used in Asia but only one-third as thick. That fiber reduction frees up an extra 10 to 12 percent of space within a shipping container.

The program determines whether a product can be compression packed—a method that literally pulls the air from bulky items such as sweaters. It also trains operators on how to best fold apparel for packaging—for example, stacking zippered items with the zipper first on the right, then on the left, to avoid a higher-than-needed "pyramid effect," Bevilacqua says.

The program often finds that a company can redesign its packaging boxes to create the least wasted space while still being able to contain every type of item from its product line—say shoes—inside. Shoes are a good example because a standard shoebox often can be made smaller, yet still serve as a standard size.

"Sustainability and savings produce a cascading effect," Bevilacqua says. "Sustainable packaging also reduces the carbon footprint to transport shipments, and saves the water and energy it takes to make those boxes."

Finding a Sustainable Balance

Sustainable packaging goals exist in tandem with a shipper's many other concerns.

Even as Walmart's suppliers redesign packaging, they need to keep other considerations in mind—such as protecting the product inside. "A product that's not robust enough to survive the shipping process or isn't compatible with our automation is more likely to be damaged," Hall says. "It's a fine balance between addressing a product's weight, size, and robustness while not over-packaging, but also not under-packaging."

Automation comes into play because Walmart finds it uses less energy when products move on a conveyor rather than by a forklift in the warehouse.

A Taste for Savings

Since 2002, Hormel Foods has closely tracked savings associated with sustainable packaging. The food company's goal, initiated in 2012, is to reduce packaging weight by 25 million pounds by 2020, says Dan Miller, group manager of research. The company is currently only 20 percent away from that goal.

At Hormel, packaging scientists test, evaluate, and approve sustainable packaging materials, which the company's sourcing group then purchases or the scientists design.

"We've examined just about every packaging material from a sustainability standpoint," Miller says. That includes analyzing corrugated cardboard against paperboard in terms of strength and recyclability, and considering cardboard with various fluting levels for strength-to-thinness ratios.

Packaging scientists are currently studying paperboard made from alternative fibers—sometimes called tree-free fibers—such as cotton, hemp, or agricultural residues such as wheat straw.

One recent change at Hormel impacts its Lloyds Barbecue meats, which were originally packaged in rigid plastic containers with a plastic film seal. The container was wrapped in a paperboard sleeve to identify its contents, says Chad Donicht, senior scientist for packaging, research, and development at Hormel.

A few years ago, the company moved to an in-mold labeling system to brand the plastic package and eliminate the need for the sleeve. At the same time, Hormel packaging scientists optimized the plastic container to reduce weight.

The move not only saved paperboard, but it also contributed to the product's visibility on the supermarket shelf, Donicht adds.

Hormel has also found ways to reduce the weight of the metal cans it uses for certain products—which, in turn, lightens shipping loads. The food company also found it could do away with some pallet dunnage—including the layer pads used during shipping—when products are more tightly and more sustainably packaged.

Packaging Pushback

But shippers could face market resistance to their sustainable packaging moves. In 2016, that type of pushback hindered Procter & Gamble's progress toward meeting sustainable packaging goals, according to its citizenship report.

"In some key markets, customer requests for smaller case counts increased the amount of corrugate usage," the report states. "We also shifted some products to smaller sizes to better meet consumer needs, which also increased the amount of packaging per consumer use."

The company was able to offset those issues, however, with several packaging changes, delivering a 12.5-percent packaging materials reduction for 2016 as compared to 2010.

Among the changes:

  • In Europe, P&G's hair care line moved to caseless shipping within some supply chains.
  • In Latin America, the company introduced Pampers Pants in a flexible film bundle with a new pallet stacking design. "This significantly reduces the amount of corrugate material needed," the report states. The bundle and pallet design is being rolled out to other regions.
  • Larger rolls of Bounty paper towels and Charmin toilet paper meant consumers changed their rolls less frequently and P&G used less material to pack and ship the rolls.

"We expect the same challenging headwinds to persist in fiscal year 2017 such that future progress against our goal may become more challenging," the report states. "Going forward, we will maintain a strong focus on optimizing packaging design and evaluating opportunities to not only source-reduce, but also increase our use of recycled resin and increase recyclability."

Sustainable packaging efforts aren't fully where shippers want them to be. But they are taking steps through corporate programs to track their progress toward reduction, recyclability, and less waste.

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