By Julie Gallagher
Editor, Center Store
A recent Mintel study reports that more than one-fifth of the close to 18,000 new food products introduced in 2006 made organic or all-natural claims. The “greening” of these items also seems to be permeating the materials used to construct their vessels. Ecologically sound packaging — whether leveraging fewer resources or more sustainable ones — represents the latest efforts by manufacturers to stir the environmental-consciousness of consumers, but the trend has retailers seeing a different kind of green.
A whopping $3.4 billion in transportation, manufacturing, shipping and storage-related savings is what Wal-Mart projects it will realize as a result of its five-year plan to reduce the packaging used by its 60,000 global suppliers. The initiative, which aims to marry environmental stewardship with business efficiency, won’t begin until 2008, but its vast network of trading partners has undoubtedly begun to anticipate its far-reaching implications.
Their visions may take on more clarity when Wal-Mart distributes its packaging scorecard on Feb. 1. The tool will allow manufacturers to evaluate themselves, relative to their peers, in the areas of packaging innovation, energy efficiency, transportation and product/package ratio, among other things. Rather than mandate the achievement of a specific score, Wal-Mart will take a supplier’s ranking into consideration when making sourcing decisions.
The mega-retailer projects that a reduction of 5% of the packaging from 10% of the global packaging industry will result from its plan, accompanied by a collective $10.98 billion in savings by 2013. The atmosphere could potentially be spared 700,000 metric tons of carbon dioxide, which equates to taking 213,000 trucks off the road annually, noted Wal-Mart.
That message won’t be lost on consumers if the retailer has anything to say about it, but what about the credit due its suppliers? Communicating all of those ecological benefits would be challenging enough on a regular-sized package, but imagine trying to do it on one with more limited real estate.
Unilever tells us the story of its 10-inch-high, 32-ounce bottle of All-brand “Small & Mighty” triple-concentrated laundry detergent, which cleans the same 32 loads as its 100-ounce counterparts, with simple illustrations of a small bottle, an equal sign and a larger bottle. What the petite packaging lacks is information about how one bottle of the detergent requires half the amount of plastic to produce and half the amount of corrugated cardboard than the standard 100-ounce bottle of detergent. Its production results in annual savings of 26 million gallons of diesel, 150 million pounds of plastic and 750 square feet of cardboard.
Unilever’s innovation has not gone unrewarded. Sam’s Club is allocating the same amount of shelf space to All as it did before its bottles shrunk in size. The result is greater quantities of the detergent on Sam’s Club shelves.
Shrinking packages might also ease retailers’ sourcing challenges as new products proliferate. At the rate manufacturers are eliminating sugar, salt, hydrogenated oils and other ingredient evils from their products, reducing container sizes may not be such a challenge after all.