Packaging Strategies and the Circular Economy

In a bid to transition to a sustainable, low carbon, resource efficient and competitive economy, the EU has adopted regulation to ensure more recycling and re-use. The Circular Economy Package, introduced in December 2015, is set to bring benefits for both environment and economy, and forces food packagers and packaging companies active in the EU to rethink their packaging strategies.

Packaging on supermarket shelf

The EU’s Circular Economy Package

The Package includes 55 proposed action points with timelines that should contribute to 'closing the loop' of product lifecycles. It is estimated that a circular economy could generate 170,000 jobs in waste alone, and up to EUR 600bn in savings. Other legislative proposals adopted include targets to reduce landfills and to increase the level of reuse and recycling of key waste streams like municipal waste and packaging waste. A recent summit focused on the new regulations, consumer demand and what packaging companies are doing to ensure they have a suitable strategy in place.

Packaging as part of the entire supply chain

Besides the regulatory framework, consumers are also increasingly demanding when it comes to sustainable packaging options and sustainability throughout the supply chain. Packagers are therefore looking to innovate not only their packaging, but are also taking the product and its functionalities into account, looking at the effect of changes on transport and logistics, and on the whole lifecycle of the packaging. Simply ensuring packaging material is made from a renewable resource, such as bio plastics, is not enough anymore. Packaging is an integral instrument in making the entire supply chain more sustainable and therefore requires engaging several stakeholders in the supply chain.

Profit generation and cost cutting possible

Even though the changes to packaging requirements may be considered a financial burden at first, becoming more sustainable can in turn lead to substantial profit generation and/or cost cuts. Some consumer/packaging companies already established strategies and principles related to sustainability and the circular economy long before this became required by laws and regulations. Some examples below.

Metro France: major savings in fish packaging

In 2013, Metro introduced a global packaging policy, which among other things led to a change in packaging of Metro’s fish products. It proved a fine example of how rethinking packaging can lead to significant savings in costs and waste/resources. Metro replaced EPS (Expanded Polystyrene) packaging with PP (Polypropylene) packaging. Although PP was more expensive, PP-packaged products are smaller and therefore require 50% less space and 30% less ice and plastic. They also require less cooling during transport and have simplified the cleaning process in the fish areas in Metro’s stores, as there is no 'crumbling' from this packaging as compared to EPS. The results are so promising that after a one month pilot, Metro’s other fish suppliers are interested in applying this practice to more clients.

Marks&Spencer: Plan A

M&S launched its 'Plan A' in 2007 and made M&S’s UK business carbon neutral. They have now launched 'Plan A 2020', with the ultimate goal of becoming the world’s most sustainable major retailer. Initiatives in the plan include sourcing food products locally (shortening supply chains) and introducing measures to reduce food waste. M&S has calculated that their initiatives have turned out to be an important asset; adding an average of GPB 7mln annually in net profit over the years.

“Packaged. The 5th Global Summit”

“Packaged. The 5th Global Summit” took place in Brussels on the 25th and 26th of January 2016. Key speakers from major packaging, food and beverage companies like Mondelez, Metro, Heinz, Marks and Spencer, and Stora Enso shared their experiences and best practices related to packaging and discussions focused heavily on the circular economy. Susan Hansen, Global Strategist Food&Agri Supply Chains was present on behalf of Rabobank's FAR department.

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