Lighter Budgets Lead to Lighter Packages

Businesses Cut Down on Packaging to Save Money, Meet Sustainability Goals

Share this article

Businesses looking for ways cut costs have been scrutinizing their packaging in recent years, reducing their paper and plastic and lightening up the load for shipping.

Both paper and plastic use were down from 2007 to 2008, while aluminum use remained steady, despite a slight improvement in the economy, according to the 2010 State of Green Business Report from

The trend in decreasing the amount of raw materials put into packaging has been going on for several years. Plastic grocery bags, for example, have decreased in weight by almost 80% from bags in 1976, and aluminum cans weigh about 64% of what they did in 1972.

In 2008, however, the report noted a significant drop in the amount of packaging used — about 5.47 thousand tons per billion dollars GDP, down from 5.87 in 2007, 6.9 in the previous two years, and 6.2 in 2004. Innovation in materials and a decrease in weight, called “lightweighting,” were largely responsible. For example:

“Coca-Cola began using 30% plant derivatives in some of its bottles, Amazon announced its next wave of ‘frustration-free’ packaging, and Sun Chips announced a bag made 100% from bio-materials so the corn is inside the bag and in the bag itself,” GreenBiz publisher Joel Makower said in announcing the report. “And Sprint is saving over $2 million a year and avoiding 600 tons of waste through packaging re-design.”

According to the report,

“Of all these trends, lightweighting has been the key driver to packaging reductions, gaining currency with manufacturers for the simple reason that it gains them currency: Using fewer materials directly lowers costs.”

In addition to lowering costs, more efficient and lighter packaging can cut transportation emissions by fitting more of a product in each shipment.

Cereal company General Mills said it saved 890,000 pounds of paper fiber and cut transport costs by the equivalent of 500 truckloads a year by putting its Hamburger Helper noodles in smaller boxes in 2007. In addition to the financial savings from reduced paper costs and transport costs, it also allowed them to avoid a per package price increase when grain prices increased by selling less product per cereal box at the same cost.

Discount retailer Wal-Mart set a goal of a 5 percent decrease in packaging in its supply chain by 2013. In 2009, it introduced an updated sustainable packaging scorecard for suppliers.

While the scorecard does not evaluate costs of greener packaging, it is a factor in their buying decisions says Amy Zettlemoyer-Lazar, Sam’s Club senior director of packaging. And although the retail giant will not disclose how much money it has saved through packaging reduction, the company does track it.

“Packaging helps to contain and protect the product our customers are buying. It also conveys value, sometimes offers dispensing and protective features for the product,” explains Zettlemoyer-Lazar. “As we work with suppliers to reduce packaging, it can help reduce costs, which we pass to our customers in the form of low prices.”

Part of the issue with packaging is that some companies see it as a significant part of their branding; the size, design and materials of a bottle or box can be a large part of consumer appeal. But as consumers want to see their own environmental values matched by the brands they purchase, more sustainable packaging can help differentiate brands.

An Ipsos Marketing survey from last summer showed that 21% of North American consumers say that food companies should concentrate most on using more environmentally friendly packaging, compared to just 4% who are concerned about more convenient packaging or 14% concerned about improving taste.

Kraft Foods UK brand Kenco instant coffee, hoping to capitalize on their redesigned environmentally friendly packaging, has built a £7.5 million ad campaign around a 97% reduction in packaging with its Eco Refill pack.

While packaging intensity dropped more significantly in 2008 than in previous years of the study, Makower is concerned that this trend may not continue as the economy improves.

Considering the potential cost savings and the brand differentiation potential, though, the smart companies are likely to continue to eradicate waste from packaging and make sustainability a priority.


See also:

Greening Wal-Mart’s Supply Chains

Can Learning to Cook Save the Planet?

Report: Key Suppliers Ignore Climate Change Risks

Taking Personal Responsibility for Climate Change