The Future of Sustainable Packaging: Eco-Friendly Solutions
July 26, 2024
Note: We reveal investment insights through the quotes of top business leaders.
Key Takeaways
- Companies are leveraging technology and innovation to develop more sustainable packaging solutions, including recyclable materials and predictive models.
- Technological advancements, such as IBM's scalable manufacturing and Apple's fiber-based packaging, are driving eco-friendly packaging forward.
- Regulatory impacts on sustainable packaging create increased costs and investments, with unpredictable taxes and regulations complicating financial forecasting.
- Adopting sustainable packaging faces challenges like cost, effectiveness, and convenience, requiring organizational changes and stakeholder collaboration.
- Industry-specific innovations, such as PepsiCo's Greenhouse Accelerator and CP Foods' use of SAP tools, highlight significant strides in sustainable packaging.
Current Trends in Sustainable Packaging
Companies like Amazon, Coca-Cola, and Procter & Gamble are leveraging technology and innovation to develop more sustainable packaging solutions. These efforts include predictive models for eco-friendly packaging, recyclable materials, and comprehensive strategies to reduce plastic usage and improve recycling practices.
"All that info helps the model predict the more sustainable packaging to use while still protecting the items." --- (AMZN, Twitter, 2024/04/22)
"From creating new products and brand extensions to the development of more sustainable packaging to more efficient equipment and the use of technology to improve our business, we believe innovation is a key enabler in creating value." --- (KO, event transcript, 2024/05/01)
"So if you look at Ariel 4 chamber Liquitex in Europe, which is high performance and cold wash, which is the claim, we were able to reduce the wash temperature, deliver a packaging that is recyclable and sustainable, and the business grew more than 20%." --- (PG, conference, 2024/05/14)
"Our company is overdue on taking action on this important issue. Shareholders will benefit from this proposal by being able to clearly assess company policies and practices versus peers if Amazon agrees to report on its plastic footprint across company sectors and commits to goals to reduce the amount of plastic used for packaging globally. Please vote yes on this shareholder proposal number 11. Thank you." --- (AMZN, event transcript, 2024/05/22)
"We seek to positively impact people's lives, communities and the planet through water replenishment, packaging recycling, sustainable sourcing practices and carbon emissions reductions across our value chain." --- (KO, press release, 2024/06/20)
Technological Advancements in Eco-Friendly Packaging
Technological advancements in eco-friendly packaging are evident as IBM focuses on scalable manufacturing and advanced assembly processes, while Apple progresses towards eliminating plastics by using 100 percent fiber-based packaging.
"In addition to the advancement of packaging capabilities, IBM will be conducting R&D to develop methods for scalable manufacturing and other advanced assembly processes to support the packaging of different chip technologies, to further Canada's role in the North American semiconductor supply chain and expand and anchor Canada's capabilities in advanced packaging." --- (IBM, press release, 2024/04/26)
"The packaging is 100 percent fiber-based, bringing Apple closer to its goal of eliminating plastics in all packaging by 2025." --- (AAPL, press release, 2024/06/10)
Regulatory Impacts on Sustainable Packaging
Regulatory impacts on sustainable packaging include increased costs and investments due to new legal requirements, uncertainty around potential taxes and regulations, and jurisdictional variations. These regulations aim to enhance sustainability, waste reduction, and recycling, but their unpredictable nature complicates financial forecasting.
"Further, some regulations apply to all products using certain types of packaging (e.g., plastic), while others are designed to increase the sustainability of packaging, encourage waste reduction and increased recycling rates or facilitate the waste management process or restrict the sale of products in certain packaging." --- (PEP, sec filing, 2024/Q2)
"These new or increased legal or regulatory requirements, along with initiatives to meet our sustainability goals, could result in significant increased costs and additional investments in facilities and equipment." --- (PEP, sec filing, 2024/Q2)
"Because of this, we cannot predict the scope or form potential taxes, regulations or other limitations on our products or their packaging may take, and therefore cannot predict the impact of such taxes, regulations or limitations on our financial results." --- (PEP, sec filing, 2024/Q2)
"packaging used vary by jurisdiction. Because of this, we cannot predict the scope or form potential taxes, regulations or other limitations on our products or their packaging may take, and therefore cannot predict the impact of such taxes, regulations or limitations on our financial results." --- (PEP, sec filing, 2024/Q1)
"Risks Associated with Climate Change Certain jurisdictions in which our products are made, manufactured, distributed or sold have either imposed, or are considering imposing, new or increased legal and regulatory requirements to reduce or mitigate the potential effects of climate change, including regulation of greenhouse gas emissions and" --- (PEP, sec filing, 2024/Q1)
Challenges in Adopting Sustainable Packaging
Adopting sustainable packaging faces several challenges, including cost, effectiveness, and convenience for consumers, as highlighted by Procter & Gamble. Additionally, organizational changes and stakeholder collaboration are necessary, as noted by Colgate-Palmolive and Kimberly-Clark, which also emphasize the need for significant investments and managing supply chain practices.
""We recognize that there are still challenges and opportunities ahead and we remain dedicated to supporting a more sustainable future for all." Kimberly-Clark partners with a wide range of stakeholders and nonprofit organizations to deliver innovative products and solutions to improve the future for babies and children, including UNICEF." --- (KMB, press release, 2024/06/05)
"New Collaboration Aims to Reduce Environmental Impact of Laundry, Highlight Benefits of Cold Water Tide®, America's #1 trusted laundry detergent, and Walmart, America's largest retailer, announced a joint effort today to help Americans make a smart, more sustainable choice in the laundry room – washing in cold – as consumers continue to express desire for more eco-friendly options while lamenting challenges such as cost, effectiveness and convenience." --- (PG, press release, 2024/04/22)
"Is getting the organization to understand that we're going to do things a little differently from an enterprise standpoint, that that localization, that empowerment that I had, we're going to drive change because it's going to be for the betterment of the company and more sustainable long term." --- (CL, conference, 2024/06/05)
"Over the past decade, the company has made significant investments in developing more sustainable products as part of the company's innovation strategy and focus on delivering products with enhanced consumer benefits while striving to lower its environmental footprint." --- (KMB, press release, 2024/06/05)
"key customer relationships; (9) the ability to protect our reputation and brand equity by successfully managing real or perceived issues, including concerns about safety, quality, ingredients, efficacy, packaging content, supply chain practices or similar matters that may arise; (10) the ability to successfully manage the financial, legal, reputational and operational risk associated with third-party relationships, such as our suppliers, contract manufacturers," --- (PG, sec filing, 2024/Q3)
Industry-Specific Innovations in Sustainable Packaging
PepsiCo's Greenhouse Accelerator Program supports innovative ventures, including sustainable packaging solutions, while CP Foods leverages SAP's sustainability tools to make eco-friendly decisions. Apple advances with 100% fiber-based packaging, aiming to eliminate plastic by 2025. These industry-specific innovations highlight significant strides in sustainable packaging.
""With access to quality mentorship, resources and a platform designed for growth, this program not only supports the expansion of these innovative ventures but also brings forth products that meet consumers' evolving tastes for unique and dynamic offerings, driving forward both their success and industry innovation as a whole."" --- (PEP, press release, 2024/07/09)
""Using RISE with SAP and our sustainability solutions, CP Foods is getting ahead of forthcoming emissions regulation and future-proofing its business by using data to make more sustainable decisions."" --- (AAPL, press release, 2024/05/16)
"The packaging is 100 percent fiber-based, bringing Apple closer to its goal to remove plastic from all packaging by 2025." --- (AAPL, press release, 2024/05/07)
Economic Implications of Sustainable Packaging
Walmart's proposal to create a board committee on corporate financial sustainability highlights the economic impact of sustainable packaging initiatives. Procter & Gamble's strategy emphasizes packaging as a key factor in brand superiority and productivity, indicating significant economic considerations in their sustainable packaging efforts.
"operator: part of the National Center For Public Policy Research, proposal 10, which asks the board to create a board committee on corporate financial sustainability to oversee and review the impact of the company's policy positions, advocacy, partnerships and charitable giving on the company's financial sustainability." --- (WMT, event transcript, 2024/06/05)
""We remain committed to our integrated strategy of a focused product portfolio of daily use categories where performance drives brand choice, superiority — across product performance, packaging, brand communication, retail execution and consumer and customer value — productivity, constructive disruption and an agile and accountable organization."" --- (PG, press release, 2024/04/19)