US Retailers Push Packagers to Think 'Green'
Date: 05-Sep-07
Country: US
Author: Euan Rocha
Most initiatives, although still in their infancy, are
being spurred by increasing environmental awareness and looming
legislation. But companies exploring smaller and 'greener'
packaging options are also doing so with a keen eye on
profits.
"I would say that the balance is still probably weighted
more toward cost control," but the significance of
environmental benefits is growing, said Wachovia analyst
Ghansham Panjabi.
At the forefront of one such initiative is the world's
largest retailer, Wal-Mart Stores Inc . Last year, the
company announced a plan to reduce packaging by 5 percent by
2013, a move that could save it US$3.4 billion.
A reduction in the volume of packaging has interesting
ramifications said Robert Anstine, vice president of marketing
at International Paper Co's Shorewood packaging unit,
which is working with Wal-Mart on its packaging reduction
program.
"If you go to a smaller package, it means you can put more
of them in a shipping container, which means you can get more
product on a truck; it lowers the amount of energy and fuel
used to transport the product," Anstine said.
However, the chain reaction does not stop there. It also
means more products on shelves, a higher probability of
customers finding the products they seek and fewer man hours
spent restocking shelves.
Bio-based packaging products are also becoming increasingly
popular and being used in surprising places.
International Paper for instance manufactures PaperFoam, a
starch-based product that can be used in lieu of traditional
plastic compact disc trays.
Target Corp, the No. 2 US discount chain after
Wal-Mart, recently partnered with bioscience company Metabolix
Inc to create a new gift card using Mirel, a bio-based
plastic.
Curiously, a rather nondescript packaging product -- brown
paper bags -- has begun to gain traction again as cities and
municipalities begin to restrict the use of plastic bags.
"We do see that (paper bags) coming back quite a bit and we
can produce a paper bag with a pretty high recyclable content,"
said Don Atkinson, vice president of marketing at Weyerhaeuser
Co.
Even, chemical makers that have traditionally manufactured
hydrocarbon-based plastics have begun exploring some bio-based
options.
Dow Chemical, the largest US chemical maker, is
exploring ways of making polyethylene -- a widely used plastic
-- from sugar cane. While DuPont Co is producing
propanediol, an ingredient used in cosmetics and anti-freeze,
from corn sugar.
But the big question is -- will customers pay more for more
eco-friendly packaging?
Brian Igoe, chief brand officer of Metabolix, says
customers are willing to pay more for cleaner products, but
some analysts and executives beg to differ.
"It has to be priced competitively, because, historically,
what we've seen is consumers and retailers are not particularly
interested in paying more for a 'green' product or package,"
said International Paper's Anstine.
Analysts and executives concur that customer behavior, more
than legislation, remains the deciding factors in the debate.
"Consumers ultimately get to decide. You can introduce all
sorts of legislation, but at the end of the day it depends on
what the consumer does," said Wachovia's Panjabi.