When Wal-Mart Stores announced last September its plans to cut packaging by 5% over the next several years, retailers and environmental advocates were surprised. After all, this is the industry giant, the bruiser from Bentonville. Change of this magnitude is not easily accomplished.
And yet, the world's largest supermarket chain also makes the rules, and its packaging reduction initiative has had significant impact up and down the supply chain — and puts other retailers on notice.
According to Wal-Mart officials, the reduction will remove 67 million gallons of diesel fuel, 213,000 trucks and 324,000 tons of coal from their complex supply equation. All told, Wal-Mart expects to see a savings of more than $3 billion.
“These types of results are good for Wal-Mart, our suppliers and customers, and the environment,” said company spokesman Kevin Thornton. Wal-Mart has placed the onus for innovation on manufacturers, who have until early next year to fill out a packaging “scorecard” that grades them on everything from renewable energy use to gas consumption and carbon output. Wal-Mart officials said they will give preference to those manufacturers who attain high scores. To date, more than 3,000 of the retailer's 60,000 suppliers have logged into the system.
“It's important to show that being an efficient and profitable business goes hand-in-hand with being a good steward of the environment,” said Matt Kistler, a senior vice president with Wal-Mart's Sam's Club division, who is heading up the effort.
The packaging program is the largest part of the retailer's new push toward supply chain sustainability and a greener overall image. Wal-Mart is also looking to cut costs on gasoline by incorporating hybrid trucks into its fleet — a measure that's supposed to save $310 million by 2015. The retailer also announced it will begin buying all of its wild salmon and frozen fish from only those producers certified “sustainable” by the Marine Stewardship Council.
All of these efforts have their detractors, who claim that Wal-Mart is trying to greenwash its image after years of environmentally destructive practices. It's no secret that the various programs are as much profound cost-saving measures as they are environmental ones. But distribution is where Wal-Mart has always excelled, and its expertise in this area is bringing about ecologically inspired changes that only a company of this size can.