The Store Brands Sustainable Packaging Conundrum

January 17, 2012

Editor’s Note: This is the second article in of a two-part report on the Store Brands Decisions 3rd annual Packaging Design Roundtable. Last week’s article analyzed the issues stifling store brands packaging innovation.

Kurt Denman

Sustainable packaging is a topic that stymies most store brands industry players. No one quite has the answers yet, but most admit the issue will play a larger and more important role in brand development in the future, according to retailers and design firm participants in the Store Brands Decisions 3rd annual Packaging Design Roundtable.

While indeed sustainability is a much larger issue and opportunity than product packaging alone, tackling the packaging challenge is something concrete that store brands retailers and suppliers should be able to get their arms around to some extent.

“There’s this base line cynicism…that nobody really recognizes and says…Is paper better than plastic? Is plastic better than paper? I have no idea and I don’t know if anyone does,” said Kurt Denman, director of brand development for OfficeMax. “What I do know is that we over-package our products right now. So what we’re trying to do is just reduce the way they’re packaged.”

Rt group image Denman said the goal is not to become the most earth-friendly because OfficeMax brands were not developed with that platform in mind. Its initiatives also are not consumer driven because several research reports indicate consumers are not willing to pay more for more sustainable products. For OfficeMax the key driver is costs – to reduce the cost of packaging, thus cutting product weight and size and subsequent transportation costs, Denman said. “We’re not looking for a magic bullet. We’re just trying to use less.”

Patti Howe

Denman was joined by eight other retailers and design agencies that participated in the roundtable in November in Chicago at the PLMA Show. He was joined by Gino Biondi of Family Dollar; Todd Fryer, Smart & Final; Melissa Billman, Kum & Go; Doug Palmer, DAPCO Inc.; Allan Meyerson, GROUP360; Patti Howe, Daymon Design Gary Chiappetta, Kaleidoscope, and Lindsey Hurr, Immotion Studios.

Several design agencies agree with the OfficeMax cost-cutting strategy, while taking more time to figure out which brands are worth investing in from a sustainable packaging perspective. “The real question should be how relevant that is to the core of that brand,” said Howe, senior director of branding and design for Daymon Design. You have to know if it is worth investing in, she said, and if the consumer will believe that the retailer’s efforts were “so authentically better for the environment.”

Roundtable participants agreed on one thing -- that there is a lot of cynicism around the topic of sustainability and insufficient credible research to justify headlong investment. Most brands – national advertised and store brands, alike – are jumping into sustainability simply following the pack, uncertain of the true environmental benefits. “I love the concept of it; I just don’t think consumers are there yet,” Howe said.

Gino Biondi

Operational Savings
Most retailer roundtable participants agreed that the opportunity in the short term centers more on operational savings than earth-friendliness that the consumer will buy into. Less packaging and smarter product size configurations, for example, can also yield tremendous shipping and transportation efficiencies, according to Biondi, director of brand development for Family Dollar, who previously worked for a manufacturer. He relayed a story about how one of his former employers redesigned a product that reduced by 30 percent the volume of space taken up on shipping trucks, which yielded millions of dollars in savings. The cascading affect of that change is also environmentally beneficial -- the company used less fuel because it needed fewer trucks and trips to distribute the products.

Gary Chiappetta with Melissa Billman

There are many ways to look at and define sustainability, which present both challenges and opportunities, the panel agreed. Properly branding and packaging a product so it sells better could be considered sustainability, said Chiappetta, managing partner of Kaleidoscope, relaying a story about one of his creative directors who told a client that “‘if you brand this correctly you’d sell more product and you’d have a lot less sitting in your warehouse. That alone can save you money. That alone can be defined as sustainability.’”

Unearthing costs savings can also make it easier to sell the concept of sustainable packaging to upper management. “You’ve got to ask the right questions. You’ve got to frame it up properly,” Biondi said. “I think people have a way of thinking about sustainability, but it goes way beyond what most people intuitively think. You got to look deeper into it.”

Melissa Billman

Kum & Go, a convenience store operator with upwards of 500 stores in the Midwest, is extremely focused on all aspects of sustainability -- including energy efficiency, waste reduction and green buildings – and has a sustainability manager to keep the retailer on track.

“We take it very seriously,” said Billman, director of private label development. From a private label products standpoint “there are different forms of sustainability. It could be less plastic in some of your product lines. It could be less cardboard at the bottom that’s holding [the case] together. But what we have to be conscious of is that it actually holds its physical characteristics and protects the product. So we’re not going too thin that it becomes detrimental to the product and then affects the brand message.”

Doug Palmer

Palmer, principal of DAPCO Inc., a retail consultancy, believes sustainability is in its infancy, and is likely not to evolve further for some time. “It’s kind of like organic was 20 years ago – there are no guidelines for sustainability,” he said. “We hear about XYZ retailer putting solar panels on his store and all of a sudden he’s the green store of the year. Until it becomes a consumer demand I think we’re going to continue to have this conversation for some time.”

SBD Views: The immediate opportunity for store brands is to find the dual win opportunities that result in lower product cost and more sustainable packaging. To help retailers and suppliers identify and act on these opportunities, we have two special educational activities taking place at the upcoming Innovation & Marketing Summit. In a special keynote presentation on March 1, Robert Parvis from Walmart’s Sam’s Club will present “Integrating Packaging Innovation & Sustainability at Sam’s Club and Walmart.” On Feb. 29, an exclusive pre-summit seminar “Sustainability for Store Brands Packaging” is being presented by the Sustainable Packaging Coalition in partnership with Store Brands Decisions. If you are in the process of sorting out what role sustainable packaging will play in your business, the Innovation & Marketing Summit will help provide some answers. -- John Failla for Store Brands Decisions.

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