Packaging Technology Improves/Wal-Mart and Coca-Cola Boost Packaging Sustainability

There are several very significant reasons why industry sectors of all types are focusing on improvements to packaging as a path to sustainability. To begin with, in the U.S., packaging accounts for about one-fourth of all material sent to landfills. Packaging is often both bulky and heavy. If packaging can be reduced in weight, then it saves in total shipping costs. Better still, if it can be reduced in both weight and dimensional size, then more items can be packed in one container, and the total shipping cost can be reduced dramatically. Once the item arrives in the warehouse or retail store, smaller size means that more items can be stored per shelf—yet another efficiency.

Finally, packaging can be expensive, and it often represents a fairly high percentage of the total cost of manufacturing and distributing an item. Packaging may involve plastics, aluminum or paper, all of which are subject to fluctuations in basic commodity costs. Simply put, reducing the amount of packaging used saves costs and increases sustainability. Today’s rapid changes in packaging are having a significant impact on a wide range of industries, from chemicals and plastics to transportation, food processing and retailing.

The Coca-Cola Company, owners of one of the world’s most recognized brands and a global leader in the beverages business, published a report titled “Creating Sustainable Packaging.” The report describes its efforts to reduce waste in packaging. When you consider the millions of glass bottles, plastic bottles and aluminum cans involved in delivering Coca-Cola drinks to customers worldwide, not to mention the related cardboard and plastic packages that go with them, the numbers involved can be extremely significant—billions of cases of beverages per year. Also, a reduction in such waste could have a dramatic effect on the firm’s bottom line.

Part of the firm’s effort has been focused on plastics, as much of its beverage volume is shipped in PET (polyethylene teraphthalate) plastic bottles. Coca-Cola uses what it calls the “PlantBottle” PET package, which is a recyclable drink bottle made partly (about 30%) from plant-based ethanol instead of oil-based PET. While much of the food industry’s packaging of this type has been based on the use of ethanol from food-crop plants such as sugarcane, in the future they may be able to utilize agricultural waste instead.

Coca-Cola plans for all of its plastic containers to meet its 50% recycled material content goal by 2030 and making 100% of its packaging recyclable by 2025. Competitor PepsiCo is also very active in this regard. Companies active in using plant material to make beverage containers include Virent, a Wisconsin-based firm owned partly by Cargill, Shell and Honda, as well as Gevo and Avantium. Virent produced the first demonstration-scale, recyclable plastic bottle made entirely from plant-based materials. Unfortunately, the Coronavirus pandemic delayed a number of these plans by as much as a year or more according to many analysts.

Glass bottles and containers are also making a comeback. In response to consumer concerns about toxins from plastic packaging seeping into food and drinks, a number of manufacturers are using more glass containers. Coca-Cola is expanding its distribution of several soft drink brands in eight-ounce glass bottles while S.C. Johnson’s Ziploc brand offers VersaGlass containers that can be used in the freezer, microwave and (without lids) heated up to 400 degrees in ovens.

Companies such as Nestle SA and Unilever PLC are opting for paper wrappers and packaging instead of plastic. Paper is made from a renewable source and is more easily recycled. There are new regulations in the EU to reduce plastic waste, and analysts at UBS expect paper to take 11% of the European plastic packaging market, or about $9.4 billion by 2031. One drawback of ordinary paper versus plastic is that paper cannot protect food from moisture, grease, oxygen or humidity, while plastic can do so. Some firms are experimenting with coated paper packets. The trick is for the treated paper to remain recyclable.

Meanwhile, a mandate in California requires drink manufacturers to use 50% recycled material in bottles by 2030. This poses a challenge since bottle collection rates were only about 27% in the U.S. as of 2022, according to data from the national Association for PET Container Resources. Ultimately, companies around the world that use plastic packaging will have to foot the bill for its collection and recycling.

Another issue with regard to packaging is the waste incurred when all of a product cannot be extracted easily from its container. Consumer Reports found that up to 25% of skin lotion, 16% of laundry detergent and 15% of condiments such as mustard and ketchup get stuck in their containers and are thrown away. Enter LiquiGlide, a company that manufactures a coating that makes the inside of bottles and other containers slick, so that contents are easily squeezed or poured out. In early 2015, the company announced that Elmer’s Products, Inc. had signed an exclusive licensing agreement for the coating for its glue containers.

Internet Research Tip: Coca-Cola

For an in-depth look at global soft drinks firm Coca-Cola's sustainability efforts, see: www.coca-colacompany.com/sustainable-business .

Walmart has been a world leader in recognizing the potential good that can be done by reducing packaging, and it is working closely with suppliers for innovative solutions to packaging challenges. As the world’s largest retailer, progress made at Walmart makes a significant difference, while setting a standard that is often adopted across an entire industry or product category. Walmart, with massive annual revenues, has nearly irresistible power as a purchaser because of the sheer volume of merchandise that it buys each year. Consequently, when the firm tells its supplier base of 100,000 firms that it wants to boost sustainability, things happen on a scale that can’t be topped by any other for-profit organization.

Starting in 2005, Walmart set three long-term goals: to be 100% supplied by renewable energy; to eliminate waste from its system; and to create a more sustainable supply chain. As of mid-2017, the retailer refined its goals, instituting a plan to reduce emissions in its own operations by 18% by 2025 (from 2015 levels), through a combination of measures such as increased energy efficiency, sourcing of renewable energy and improvements in refrigeration systems and fleet efficiency. It is also working with its suppliers to reduce emissions by 1 gigaton from the production and use of the products sold between 2015 and 2030, equivalent to taking more than 211 million passenger vehicles off U.S. roads and highways for a year.

Sometimes the most obvious, and easiest to implement, green tech and sustainability projects can have the biggest effect. Walmart’s determination to change the way that laundry detergent is packaged is a perfect example. Liquid laundry detergent has long been extremely popular among consumers. For years, it was sold in giant plastic bottles in watered-down form. When using it, the consumer poured a large cupful into the washing machine, not realizing that much of what was in that cup was water. These laundry bottles were bulky, awkward and heavy. Nonetheless, that was the industry standard. Selling concentrated detergent instead, eliminating much of the water from the bottle, was of such obvious potential benefit that it had been tried occasionally by the detergent industry. However, consumers shunned the smaller bottles—since they were smaller but priced the same as large bottles, consumers assumed they represented bad value. Concentrated detergents always flopped.

Then Walmart came along, with its unbeatable ability to change the way both manufacturers and consumers act. Once Walmart decided to push the smaller laundry bottles, it gave the new products prime end-cap shelf space. Methods were developed to emphasize the products’ benefits to customers. Unilever, a leading detergent maker working closely with Walmart, printed graphics on detergent labels showing how the new small bottles equaled the same number of wash loads as the detergent contained in the old, larger bottles. Television talk shows were enlisted to help spread the word. By 2008, Walmart sold only concentrated versions of liquid detergent in its stores. The company had changed an entire industry with one idea, as concentrated detergent was quickly on sale throughout the retail world. Consumers understood, benefitted from and accepted the change. Sustainability was boosted significantly. Smaller, lighter bottles times thousands of Walmart stores meant immense savings in packaging, cardboard cases to hold the bottles and freight. Over a three-year period, Walmart estimated that the changes saved 125 million pounds of cardboard cartons, 95 million pounds of plastic resin and 400 million gallons of water, along with 500,000 gallons of diesel fuel that would have been used in the shipping process. In 2019, the retailer announced further measures to reduce plastic packaging waste across 30,000 products in its house brands.

Internet Research Tip:

Walmart, the world's largest retailer, has set dramatic goals for the application of the latest green technologies in packaging, energy and other areas. To see the results, go to: corporate.walmart.com/purpose/sustainability.

The new detergent coincided with the rapid adoption of a new, front-loading design in washing machines. These front loaders, very popular with consumers, work best with concentrated liquid detergents designated “HE” (high efficiency) that produce fewer suds during the wash. The HE detergents are also formulated to work perfectly in cold water. In the past, the primary energy usage during the operation of a clothes washing machine was for the heating of water. By working well in cold water, HE detergents enable a dramatic reduction in the use of energy for washing a family’s laundry.

Amazon is putting pressure on its brands to use more efficient packaging. As of August 1, 2019, the retailer began imposing fines on manufacturers who do not meet its standards for compact and easily opened packaging. This is a perfectly logical initiative for Amazon, not only from an environmental point-of-view, but also because compact packaging means that more boxes can be delivered by one truck. Amazon is slowly building out its own system of delivery vehicles, edging out some deliveries that were previously made FedEx and UPS. Amazon plans to purchase 100,000 electric-powered delivery vans from truck manufacturing startup Rivian. Amazon is an investor in Rivian.

A lot of money will be made over the mid-term by companies that create innovative solutions to packaging needs. This will range from shipping pallets made of plastic or treated paper instead of today’s wooden slats, to packaging that incorporates nanotechnology to make it especially effective, strong or light. New packaging shapes, boxes and bottles that are easier and cheaper to manufacture, and the ease of recycling will then prevail as well. The packaging industry will work very closely with product manufacturers as always, but they will also begin to work more closely with shipping and third-party logistics services firms to provide comprehensive, systemic solutions and innovations.

In late 2022, the European Commission (EC) proposed revisions to its packaging and waste regulations. If passed, member states will be required to make a 5% reduction in packaging waste per capita by 2030, followed by a 10% reduction by 2040, compared to 2018 levels. Also, countries will have to create cash deposit-return programs for meal and single-use plastic beverage containers by 2029. In addition, by year end 2025, 65% of all packaging waste would have to be recycled (specifically, 50% of plastic and aluminum, 70% of glass and 75% of paper and board). Moreover, minimum food packaging reuse and refill standards must be achieved by 2030, including 10% of non-alcoholic beverages and 20% of hot and cold to-go beverage containers.

Initiatives of these kinds place the onus on drink bottlers to pay for used material collection and recycling, particularly for plastic. As of 2022, bottle collection rates were low, approximately 27% in the U.S. according to data from the National Association for PET Container Resources. To reach even the earliest recycling goals, ICIS (Independent Commodity Intelligence Services) estimates that output of recycled PET would have to rise by an annual compound rate of 45%.

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