sustainable packaging, sustainability, packaging, manufacturing

Ever since consumers started purchasing goods commercially, the ways in which products are packaged determine how most food manufacturers differentiate themselves from the competition. To this day, many products are identified and referred to by their packaging. Some companies can even go without a logo or label to identify the product or the company that makes it. The shape and color can be seen and recognized from a mile away. This kind of branding is critical to sales growth as there are a number of consumers who rely on a certain type of product packaging. Many purchases are driven by the way a product is packaged. The packaging can change the experience entirely, from simply purchasing a product to undergoing a cultural experience. Consumers will quickly indicate to a manufacturer if the packaging is a winner or a loser.

What is Sustainable Packaging?

Over the last several years, climate change has been front and center as a global concern. Sustainability in business has also become a global issue and concern. One of the major components of sustainability, when it comes to protecting the environment, is waste generated from the packaging of food, beverage and consumer products. Packaging with a reduced environmental impact is now becoming a consumer priority.

Sustainable packaging can mean packaging made with 100 percent recycled or raw materials, packaging with a minimized carbon footprint due to a streamlined production process or supply chain, or packaging that is recycled or reused. There is also biodegradable packaging; one example is food containers made from cornstarch being used for takeout meals. These are just some of the innovations that are taking place. One thing is for certain, as this topic continues to rise in importance and the industry adapts to sustainable packaging, manufacturers will have a variety of issues to navigate and manage.

Potential Impacts on Food Manufacturers

As packaging for food products change, there will be major implications to the entire manufacturing supply chain. But it will begin with some immediate, more general changes starting with phasing out the products that do not have sustainable packaging and changing product numbering. This needs to be managed carefully as it could have serious cost and profit implications up and down the supply chain and throughout the business.

Product Development

As manufacturers transition to sustainable packaging, the entire business will be impacted starting with product development. As new food products are designed, developed and created, the new package, beginning with the components and shape, could dictate the food product in the package. This could drive the composition of food items, ingredients and ultimately alter taste, which could impact the products market appeal.

Procurement

This is an area that could completely change as new packaging is developed to meet sustainability goals. The most significant impact could be to suppliers. As new materials for packaging are introduced, previously used suppliers might not be configured to make the new packaging for a variety of reasons. This will impact the entire purchasing process beginning with product cost through to building the entire relationship between supplier and manufacturer.

Manufacturing

As products are re-engineered to the new packaging and new products are introduced, manufacturing will have to adapt to certain changes. There might be a need for modification of production lines or even the need to purchase new pieces of a line or equipment. The change to packaging and equipment could impact the timing of changeovers and setups, which ultimately could have an impact on manufacturing efficiencies, throughput and the delivery of on-time orders.

Supply Chain and Sales & Marketing

The supply chain is another area that will be impacted by changes in using sustainable packaging. Products that remain in distribution will be in new packaging even if the look is the same. There will have to be a new SKU assigned to the newly packaged product. This will require a phasing out of the old product. Sales & marketing will have to research impact on sales. As this transition is to accommodate a packing change rather than a product recall, it would be beneficial to sell all products in the older packaging to minimize cost losses.

IT and Systems

New product changes will impact most IT systems. Master data records, bills of materials and product routings might all be impacted. Data that exists for the old products will need to be archived and data for the new products will need to be added and managed.

Adapting to Changing Consumer Buying Habits

As packaging is changed to adapt to sustainable practices, there could be a serious impact to the market. Consumer buying habits may change based on this new packaging. Manufacturers need to ensure all areas of the business are prepared for this change as well as processes and systems. This will not be a one-time occurrence. As the sustainable revolution proceeds to grow and packaging technology evolves, manufacturers will have to continue to adapt to the changes.

This is an opportunity for food and beverage manufacturers to take a good look at all areas of their business from the products they produce and sell to their systems and processes used in their operations. It can be an opportunity to implement a Sales and Operations Planning Process (if one is not already in place) to optimize the supply chain and manage this ongoing change to a new mix of SKUs to adapt to the packaging changes. This past year should be proof that change is the only constant in food and beverage manufacturing and that more change is likely on the way. Sustainable packaging is just one of the many on the horizon.

1 COMMENT

  1. As more and more people are becoming environmentally involved, companies are feeling the pressure to find more sustainable solutions and implement them into their business. Sustainable packaging is just one of them.This is great, because it results in more resources put in innovation activities, which leads to more environmentally friendly practices and processes. Everybody wins, companies, customers and the environment.

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