Sustainability Initiatives Spur Green Packaging Growth

By Jorina Fontelera from Thomasnet.com

Green packaging is on the rise, and experts say this upward trend will continue at least until 2013. Is this the result of consumer demand or brand owners pushing green?

There is no argument between industry insiders that "green" packaging is on the rise. Whether sustainable packaging impacts consumers' buying decisions, however, is still up for debate. Regardless, packaging manufacturers continue to address sustainability issues when it comes to their products.

"Being more environmentally conscious not only gets higher scores at Wal-Mart, but also is simply good for our environment," Jerry Ruud, vice president of sales and marketing for Berry Plastics, tells Entrepreneur Magazine. "Even companies that do not market through Wal-Mart are pushing green packaging concepts. This involves eliminating PVC (polyvinyl chloride) whenever possible, reducing part weights, eliminating additional packaging as well as seeking alternatives to minimize waste throughout the entire supply chain."

According to Ruud, "green" was the top packaging trend in 2008 and, based on industry reports and media publicity, will continue to be in the years to come.

A new study by industry research firm Freedonia Group forecasts demand for green packaging — defined as material comprised of recycled content, is biodegradable or is reusable — to increase 3.4 percent annually to $43.9 billion in 2013. Green packaging growth is anticipated to outpace overall packaging.

Biodegradable plastics are foreseen to have the fastest gains, fueled by increased price competitiveness with conventional resins, rapidly expanding capacity and a lower pricing volatility than petroleum-based plastics, the report says. Enhanced performance properties, brand owners' sustainability efforts and legislative bans on polystyrene are cited as stimulants for growth as well.

Recycled content packaging is expected to grow in line with overall green packaging growth. Plastic recycled content packaging is expected to drive this segment's expansion with the boost in collection volume, the development of food-contact approved resin grades and sustainability initiatives. Counter balancing plastic recycled content packaging's rapid growth is the slow growth of paper recycled content, research shows.

Lastly, reusable packaging growth will be held back by marginal growth for drums, which face competition from intermediate bulk containers (IBC), the report adds. "More favorable prospects are anticipated for reusable plastic containers, IBCs and other reusable packaging types."

Brand owners are pushing for green products, which is quickly becoming something consumers expect. This trend is thus requiring suppliers to create eco-friendly and recyclable packages, or reduce the amount of packaging over all. "Green packaging is currently in vogue and consumer awareness is heightened due to all the publicity," Hui Herskovitz, vice president of Qosmedix, says to Entrepreneur Magazine.

Adds Alison von Puschendorf, director of public relations at packaging solutions provider MWV: "Consumers are more aware of the environmental and social impact of the manufacturing process than ever before. ... Brand owners are now incorporating sustainability into every aspect of the manufacturing and production cycles — ranging from how materials are sourced to how materials are ultimately used."

Of course, just because consumers are aware of package manufacturing's environmental impact doesn't necessarily translate to them choosing a product because its package is more "green." A new report from The Hartman Group (via The Gourmet Retailer) found that "while sustainability-oriented packaging is quickly becoming customer expectation, it is not a primary purchase motivator."

Rather, a product's ingredients influence consumers' perceptions of sustainability and ultimately the reason for purchase. Consumers surveyed in the Hartman report also said that the most sustainable packaging is "no packaging at all." Having recycled or recyclable packaging is another top requested sustainable packaging attribute.

That said, a package's sustainability or lack thereof still has some effect on consumers. A recent poll by Global Market Insights (via FutureGov) showed that Americans cited damaging the environment as the main reason they'd consider a company socially irresponsible.

Although "consumers don't want to forgo luxury items for environmentally-responsible design concepts," says Heather Ratushny, senior manager of product development for Tarte, to Entrepreneur Magazine, they don't "feel comfortable supporting over-packaged goods."

Still companies continue to push for eco-friendly packs or packaging processes. Dell, for example, will eliminate some 20 million pounds of packaging materials over the next four years, InfoWorld reports. The company plans to cut desktop and laptop packaging materials by about 10 percent globally, increase sustainable content in cushioning and corrugate packaging by 40 percent and ensure that 75 percent of packaging components are recyclable by 2012.

This packaging reduction project will save Dell an estimated $8 million and will likely improve its standing in consumers' eyes when it comes to social responsibility. As Ross Reback, executive vice president of Vogue International tells Entrepreneur Magazine, "As the green message becomes even more prevalent, consumers will gravitate to products packaged with a socially responsible commitment."

But where is that green message coming from — the companies and brand owners or the consumers?