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As the increased demand for eco-friendly packaging changes the landscape for U.S. consumer goods in all categories, brands across beauty and personal care categories are, perhaps, more susceptible than those in other categories, due to a strong reliance on packaging aesthetics. There is strong and clear evidence of U.S. consumers’ predilection for one-use items and generally disposable products. However, U.S. consumers are becoming more environmentally conscious due to concerns over climate change, and are largely driving the change toward green packaging (though Europe and Japan have been leaders in this arena for decades). Consumer packaged goods companies and their suppliers are becoming more sophisticated, taking a holistic approach to delivering eco-friendly packaging that continues to offer a compelling and proprietary brand proposition.
U.S. consumers have increasingly identified the environment as a top concern, with as many as 70% saying they want to make greener choices in the marketplace, according to GreenBiz.com. While the key words are “want to,” there seems to be a narrowing gap between the larger group of socially aware consumers and those who are truly green consumers. A recent industry study identified that 17% of consumers are “green motivated” and making purchasing decisions based on eco-friendly ingredients, manufacturing procedures and packaging materials; this group will likely continue to grow and is the group LPK Beauty Group is watching closely.
In LPK’s case load, it has observed that this new heightened awareness and a green state of mind have put increased focus on the effects of the packaging industry, forcing brands to look more closely at their package development practices and how they’re presenting environmental attributes in the marketplace. Currently, consumer goods packaging in the U.S. could be seen in the context of conflicting ecological and social demands. From a pure “footprint” standpoint, there is a complete paradigm shift from the need to create a visually competitive at-shelf appearance that’s significant and impactful to making environmental impact the priority, ultimately embracing a “cradle-to-cradle” philosophy of no waste and a product that leaves a “zero footprint” on the environment.
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Category by category, the competition to become the greenest brand in personal care has begun. And when it comes to packaging, the“environmental friendliness” of the late 1980s and early 1990s has morphed into “sustainability,” the new buzzword for responsible packaging. Sustainability by definition is the concept of meeting the needs of the present without compromising the ability of future generations to meet their own needs. Sustainability maximizes the use of renewable and recyclable materials, encourages waste reduction and resource conservation, reduces dependence on nonrenewable resources and recovers materials biologically.
The recently released “Design Guidelines for Sustainable Packaging,” from the Flexible Packaging Association, introduces four new quality criteria for package design to aid designers in creating packages that address sustainable objectives in every stage of the supply chain. Advocating for the need to “rethink the way we design at every scale,” the guidelines suggest adding four new quality considerations—optimizing resources, responsible sourcing, material health and resource recovery—to previous conventional design criteria.
The need to go green isn’t simply a culturally based lifestyle trend—the Wal-Mart effect is a key factor that affects the bottom line for all CPGs that do business with them. Sustainability received a great boost when Wal-Mart introduced its sustainable packaging initiative last year, a move that will have a ripple effect on the entire packaging industry. The retail giant’s packaging scorecard, designed to measure its 60,000 suppliers on their ability to develop packaging that is good for the environment, will be implemented in February 2008, with the goal to globally reduce packaging by 5% by 2013, a move that could save Wal-Mart $3.4 billion.
The world’s largest retailer is instituting the packaging reduction program to both promote the use of recycled materials for packaging and to reduce the amount of material used in packaging, which is where the cost savings is realized. With a smaller package, more product fits in shipping containers and on trucks, which lowers the amount of energy and fuel used in transportation. More product also fits on store shelves, which cuts human resources used to stock them. The less-is-more philosophy is spreading as other major retailers are introducing similar initiatives globally, including U.K.-based Tesco. Over time, traditional excess packaging commonly used in the U.S. will become impractical, decreasing the on-shelf footprint and requiring the need to reinvent an impactful, competitive appearance at shelf.
While U.S. retailers are now moving rapidly in the world of sustainable packaging, U.S. exporters have been aware of the role Europe and Japan have taken as leaders in this arena. Many countries, particularly the members of the European Union (EU), have passed packaging and recycling laws in the past 10 years. Needing to comply with European packaging regulations, U.S. exporters must follow the EU’s Packaging and Packaging Waste Directive, which took effect in 1994 to reduce the overall impact of packaging waste on the environment. The EU’s eco-label is required by member countries to demonstrate that a product is environmentally friendly.
Specifically, Germany established legislation with certain rules for the disposal of packaging materials. A cooperative effort for the collection and recycling of packaging materials was initiated in response to the legislation. The group uses the “green dot,” a recycling symbol that is found on packaging of virtually all products in Germany. While packaging material for products sold in Germany is not legally required to carry the green dot, it is almost impossible to market a product in Germany without it, and other European countries have initiated similar programs.
In 2000, Japan’s government began full implementation of a packaging recycling law that requires manufacturers to pay the associated collecting, sorting, transportation and recycling costs for all paper and plastic containers and packaging. Beauty brands that have been marketing globally have been managing packaging requirements of individual countries for years. However, laws and requirements for sustainable packaging will continue to change as scientific information continually redefines what materials and processes yield the most favorable, least harmful results.
The great news for U.S. marketers is there have been significant advancements in the development of eco-friendly packaging materials—notably corn-based paperboard, high-percentage post-consumer recycled content, and vegetable- and soy-based inks—that will allow marketers to meet customer expectations for their brand’s packaging, while aligning it with the brand’s character. Yet the sustainability issue remains—how this brave new natural world in eco-friendly packaging will adapt to the increasing demands.
The growing demand from retailers and manufacturers for smaller, eco-friendly packages is pushing mass and prestige beauty brand experts to reinvent strategies previously used to design aspirational, aesthetically pleasing packaging. Developing bio-based, recyclable packaging with messaging that emphasizes environmental attributes is among the latest directives for brands.
As companies such as Aveda claim the high use of renewable plant-based products as a foundation of their brand, more consumers are interested in investigating and reading package labels to learn the origins of the product and of the package. Increasing the “green effect” of beauty care brands and their packaging presents an opportunity to get closer to U.S. and global customers. Packaging aesthetics are still highly important; however, the goal of sustainability is now also at the forefront. We now have the opportunity to connect with customers on a different level by sharing their values to reduce waste and protect the environment.
Meeting these new trend expectations, in concert with the delivery of a sense of elegance and sophistication across beauty and personal care categories, will change the landscape of the brand experience and the relationship that marketers have with their customers.