What is the future of packaging?
Shelton Stat of the Week
Almost half (49%) of Americans believe the recycling system is not working well.
—Recycling Pulse, 2022
- Packaging makers should be preparing for three future scenarios as it relates to the end consumer. Actually, this was my framing based on all of our recent data, which I’ll be deeply diving into at the Circularity conference in May. The bottom line is this: Belief in the promise of recycling is faltering, but consumers want a get-out-of-guilt-free card. So, the packaging industry should work on three fronts: making the recycling system work, making compostables happen at curbside, and accelerating circularity and re-use.
- Speaking of “fixing recycling,” Steve Alexander, CEO of the Association of Plastic Recyclers, explained why brands’ sudden desire for recycled content to achieve the 2025 Ellen MacArthur Foundation-inspired goals doesn’t make up for years of low-level investment made in the recycling system. He didn’t say it like this, but, essentially, the message was that all companies must work together to invest in the infrastructure required to get the recycled content everyone wants. “Brands are the source of their own recycled content,” is exactly how he put it. Steve also pointed out that roughly 80% of the plastics being used for packaging come from three resins (PET, polypropylene and HDPE), so the focus should be on recycling these. AND we still need to improve collection. Studies on a city-by-city basis measuring the amount of recyclable materials going into households versus what’s going back into the recycling stream show a significant gap. In other words, consumers are still throwing a LOT of recyclable material into the trash.
- The question “what is sustainable packaging?” is hard to answer because the package is an extension of the brand story — and one brand may lend itself more naturally to a packaging-with-recycled-plastic-content story while another better aligns with a refillable-packaging story, for example. As the leader of a sustainability marketing firm that works to get inside people’s heads to market sustainability value propositions to them, if we as an industry don’t define sustainable packaging, the end consumer won’t have any idea … and if they don’t know what it is, they won’t be able to use that point in their product purchase decision-making.
- Money is not the problem. A panel of investors said there’s a lot of money looking for sustainable investments broadly and in the packaging industry specifically. This panel also echoed what I heard at GreenBiz 22, that companies not only need to be committed to ESG but also need to demonstrate impact. A few key quotes from panel members: “… articulating a clear ESG story is critical to achieving a premium valuation (and a clear ESG story needs to include measurement, cultural value, multiple paths to win, and no greenwashing …),” “… investors are walking away from companies with ESG targets that are too Mickey Mouse …,” and “… nobody [i.e., nobody inside a financial institution] will bring forward an investment with a poor ESG story; lending decisions will be made based on ESG performance.” And as Shelton Group has illuminated, a poor ESG story is the number one reason consumers put companies on the “naughty” list. The panel spoke to that, too: Investors are on the lookout for the risk associated with customer and consumer de-selection of specific materials and types of packaging.
- Don’t forget to collaborate with your entire value chain. We often hear, “we can’t do it alone,” and the idea of collaboration is baked into the sustainability community. But you really must think about EVERY step in the chain. A story was told about a cool packaging innovation that a resin producer, converter and brand worked to pilot. Once they were ready to scale it, they realized they hadn’t involved the machine makers tasked with producing the package at scale — the retooling required wasn’t practical.
- One rather pointed and exactly right answer to the question “what is the future of packaging?” came from Kim Carswell, formerly of Target. She said, “brands are focused on their 2025 recycled content goals now and, once we get past 2025, the floodgates of innovation will open.” The implication was that so much focus is on the goal at hand that refillables, compostables and other innovations may be back-burnered. However, those issues will move to the front-burner once the immediate recycled content goals are addressed.
What’s the future of packaging?
All speakers and panelists seemed aligned that sustainability IS the future of packaging. Consumers, investors and brands will demand it, and the industry seems ready to comply. The outstanding question is the definition of sustainability. Will that mean more recycled content and recyclability? Compostability and biodegradability? Circularity and refills? Less packaging?
My bet is on all the above.
As the packaging industry works to align on its sustainable future, this new program from Walmart seeks to speed up the process of packaging innovation and adoption from its retail vendors.
Shoptivism: Why Consumers (& Job Seekers) Opt In & Out of Today’s Brands
Sustainability is now mainstream and it’s affecting purchase behavior.
Every year we ask Americans if they’ve ever intentionally purchased or not purchased a product or service based on the social or environmental record of the manufacturer. We then ask everyone who says “yes” to name the brand. Those who say “yes” and can give an example of a brand unaided? We call them shoptivists.
But who are these “shoptivists?”
Our latest report answers this question with three distinct consumer profiles, including details on their mental models, their shopping patterns, the messages that resonate, and where to find them.