Sustainability tends to be the number one trend , agnostic of end markets or geography or almost any used metric to cover the consumer goods industry. Executives will talk about the great plans for reaching these admirable targets and there is an awful lot of activity but considerably less consequence or pay off.
Since the initial rush to commit to increasingly tight deadlines for waste free plastic packaging in 2018, and the overwhelming inability of vast majority of companies to be anywhere near where they promised they would be at first glance many would logically take this to mean that either the companies were simply greenwashing or there was some obstacle. When the commitments were made it was done from a place that there would be plenty of time to reach them.
Perhaps there were. It might have even seemed to these senior executives driving this change that this was a simple strategic decision, and with the will to see it through they would be the exception and lead this horse to water.
Good intentions are great, but they will always lead to over promising and under delivering when they run up against a fundamental flaw like we see in the sustainability space.
This flaw is a simple matter of cross purposes. Consumers might be telling marketing that they need sustainable packaging, and this might influence the packaging and operations teams amending their production or moving towards this common goal. However, time and again, the purchasing of these materials, that tend to be more expensive, and the use of newer more expensive equipment to make it leads to a clash. This is not to blame procurement, they are simply doing their job. The majority of their performance and success is based on getting more for less. Paying more for materials, potentially having to reinvest in the processing of these materials and running into capacity issues or production numbers that are not bettering the status quo is an anathema. In the same way that marketing might be feeding back this demand for sustainability, but tempering it with a lack of willingness to pay for this and engineering might be limited in what they can actually make that fulfills this need. Having to balance multiple factors to find what is going to be path of least resistance to produce the best quality products in budget restricts them from simply "picking the most sustainable" solution. It is not just procurement, but the other departments have some flexibility.
What this means is that most sustainability initiatives will inevitably fail as each department continues to work to their primary purpose. Marketing and Packaging will continue to look at innovative ways to address consumer needs and run counter to procurement who will be saying the cost needs to come down. As the cost for these nascent technologies and means are higher as they have not yet managed to apply scale it will invariably result in a no from proucrement.
Of course there are exceptions, and companies that have absorbed the cost as part of a concerted effort or goal they are working towards. Nestle have done this with Smarties when they moved to paper from plastic packaging. The project cost millions in switching raw materials, packaging equipment and having to re educate the industry about the newly updated pack formats and has been a success, but it will take a long time to see the true ROI for this enormous outlay. Nestle have always been willing and driven to be better and this translates into these type of projects. But even they have vast portfolios where cost still dominates they have not been able to take this kind of step; coffee being a major example.
In the CPG market, Mars, Unilever, PepsiCo, Coca Cola, General Mills, Danone, Kellogg's, Amazon, Hasbro.. they have all taken significant steps like Nestle to develop projects where the price is expensive but the goal of sustainability is the focus and so they have persevered. But these are absolute tip of the iceberg kind of activities - the vast majority remains unchanged and unchangeable.
The only way that we can see sustainable packaging truly grow and thrive is for the management of these major companies to amend their thinking and switch the departmental purpose to all row together. If the end goal is 100% recyclable, then everyone must work in concert, and share strain to overcome cost barriers. That way, despite an initial cost uptick, this will settle with volume and time, it might even end up being cheaper if using less material, or more efficient equipment and being able to reduce the raw materials price over time accordingly.
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