Four trends that will influence sustainability within packaging supply chains over the next decade

Packaging has become a hot talking point. From increased consumer exposure through the ecommerce boom, to a growing public interest in sustainability and the circular economy. For many businesses, sustainability and success are becoming almost interchangeable.

In January 2020, packaging specialist Duo UK surveyed 100 senior retail professionals and found there’s risk of a widening gap between packaging sustainability idealism and realism. The research found that over half (53%) of companies think reducing environmental impact will be the most important factor defining packaging strategies in the next ten years.

In this article, Anthony Brimelow, commercial director at Duo UK, discusses the trends that will influence sustainability within packaging supply chains over the next decade.

1. Overcoming legacy issues of commoditisation in packaging procurement

Packaging has long-suffered from a legacy issue of commoditisation. Yet to improve environmental performance, attitudes towards packaging procurement must evolve beyond being so cost-centric and instead adopt a cost-neutral approach. If change doesn’t happen, we risk limiting advances in sustainability and widening the Green Gap identified in our research. 

When asked which factors will influence packaging design and development in the next decade, 59% of companies stated ‘cost’. It ranked in the top three most influential factors and there’s very little difference between how influential cost is today, compared to its perceived influence in ten years’ time. 

The continued high ranking of cost highlights a disconnect between the ambition for packaging to become more sustainable and the prohibitive constraints of expenditure – often there isn’t a cohesive approach to putting actions into practice. Taking a cost neutral approach makes price a secondary consideration, enabling the proper review and trial of different sustainable packaging solutions throughout the supply chain.

Cost neutral thinking allows businesses to build a case for change, which can make their packaging strategies both environmentally and cost-friendly. To overcome this challenge, companies need a general consensus that packaging strategies will be approached with a cost neutral mindset. If a company is to succeed in truly achieving its environmental goals with new packaging strategies (or any new strategy), they must be communicated throughout the business and its supply chain with a clear, joined-up approach to succeed.

2. The impact of government policy on packaging design and development

Our research shows that businesses believe government policy will prove much more important across the packaging supply chain in the next decade. That’s 37% of respondents compared to 23% today. This marks a significant change in levels of perceived influence, and while this is understandable, it also risks bottlenecking packaging sustainability and widening the Green Gap that our research identified.

Businesses are taking note of government policies because of ongoing legislative reforms. This involves the introduction of a reformed Extended Producer Responsibility (EPR) scheme for packaging in 2023. The lack of clarity around the proposed schemes, and a government favouring taxes as its go-to means of instigating societal change, are not conducive to advancing packaging sustainability. 

Changes in policy require proper due diligence and consultation, however, the government needs to move faster and to be more definitive. As well as providing clarity, government policy must also evolve to look at the entire packaging life cycle. Too much focus is concentrated on the end of packaging life, whether that’s disposal or recycling. Policies need to be more progressive in considering packaging from its point of design and development right through to its performance throughout the supply chain. 

Current policy is, perhaps inadvertently, also distorting people’s thinking. Significant efficiencies can be realised through smart technologies, advanced engineering and artificial intelligence that improves equipment and processes. This could reduce energy consumption and enhance resource usage during packaging design and development. Policy needs to support investment in such possibilities and encourage supply chain innovation.  

3. The right material for the right application

Our research also highlighted that most companies (34%) want to see advances in packaging materials in the next decade happening in ‘compostable and biodegradable materials’. An eagerness for these types of materials is being driven by the demonisation of plastic, however it could end up doing more harm than good. When considering their packaging strategies companies must not use material as a starting point as hype and excitement around buzz terms like ‘biodegradable’ can mean the wrong choices are made.

When a packaging manufacturer approaches any project, they must determine the product’s needs and identify its handling. Packaging should protect the product against loss or damage, facilitate easy transportation and communicate relevant information. Packaging can be handled 20 times or more in the ecommerce supply chain.

It is critical therefore that retailers and brands are working together with their team and supply chain partners to ensure that changes to the manufacture of a packaging item or process do not present a negative environmental knock-on effect i.e. during storage, handling and distribution. Making a change to material in isolation will not make a brand ‘sustainable’ – it is just one element.

4. Utilising the connectivity of supply chains beyond Covid-19

Improving packaging sustainability is a complex challenge. While there’s no easy solution, we know our best chance of finding the right solutions will come from a holistic, systemic approach that will require collaboration of stakeholders along both value and supply chains.

Something we’ve seen evidence of in response to the overwhelming impact of Covid-19 on supply chains, is the speed and ability to adapt and work cohesively, something we must harness to truly transform supply chains in the future. 

For a true circular economy approach to packaging supply chains, we need to focus on developing new pooling solutions for reusable (transit) packaging, offer convenient packaging return schemes and support the scale-up of recycling infrastructure in geographical hot spots for plastic waste. Businesses need to challenge governments to work cohesively to create more consistent regulations that deliver real incentives for reusable packaging models that are truly sustainable from design right through to delivery.