Sustainable packaging and Wal-Mart

In an effort to connect buyers, product suppliers and packaging suppliers, Wal-Mart held this week its 8th annual Sustainable Packaging Exposition. The retailer looks to drive innovation, “every day low cost” and savings through the collaborative sharing of successes and ideas for new ways to improve product packaging.

With 163 exhibitors sharing their latest innovations with 2,100 attendees, Wal-Mart has created a synergetic event with a spotlight on sustainability.

PACKAGING SUCCESS
The highlight of the exposition comes through the supplier success stories that run throughout the first half of the day, where suppliers showcase the triple bottom line benefits from packaging modifications.

Stories are from companies like Utz Potato Stix, with a narrative involving a change in the foil membrane of their can.

This minor change in packaging allows Utz to save 41,270 pounds of aluminum annually, and 52,000 pounds of paper per year. Other similar stories include redesign of boxes allowing for stronger boxes that fit more items or reducing weight through material changes.

SIMPLE IDEOLOGY
A minor alteration in packaging can lead to a domino effect of savings. For example, taking an inch off of a package and reducing the amount of plastic used can lead to savings in materials, allow more items to fit per box, more items to fit on a pallet, more items per truck and more room on the retail shelf.

Fitting more items in a box and on a truck allows for fewer truck hauls and reduced fuel costs.

In addition to these cost savings and opportunities, it has the additional bonus of increasing scores on Wal-Mart’s supplier sustainability scorecard and in the end, reducing environmental impact.

HARD REALITY
It’s not so simple.

There are so many factors that come into play when selling to Wal-Mart that it can be challenging to make changes. Certain requirements and fundamentals have to be met. The product packaging has to stand up to stability tests and more importantly, appeal to the consumer.

More importantly, the buyers have to be onboard. In order for an increase in scorecard to matter, the buyers have to consider it a factor and understand the savings and opportunities.

After speaking with buyers and suppliers at the exposition, it’s clear that it’s not first on the buyer’s radar, but it is there.

Buyers prefer for the supplier to take the initiative to articulate their sustainability achievements and in most cases it will give them an advantage. But it’s fully in the supplier’s hands to bring it to the table.

This creates another problem. In order for the sustainability of the product to reach the buyer, a fairly complicated labyrinth of communication has to occur from a supplier’s marketing teams to purchasing teams to sales teams to Wal-Mart buyers.

Along this chain, individuals focus on their piece and may lose the message from others, like how the type or configuration of a box can save money and paper. The story dies because sustainability is still very segmented and often not fully integrated into companies.

THE VERDICT
For now sustainability will always be secondary to cost savings. But Wal-Mart’s pledge has ensured it will not be lost.

When competitors are gaining the advantage through cost savings, differentiation and innovation, it’s time to follow suit. It may not always be easy or a smooth process to make changes, but innovation is leading the way and without it, companies can’t compete.

With the right communication, a bit of innovation and a buyer with performance tied to the sustainability scorecard, a perfect storm brews for sustainability.