The past few years have been historic for the direct-to-consumer (DTC) industry. Sales grew steadily until the pandemic unleashed tremendous growth and a need to convert omnichannel packaging and fulfillment operations to satisfy customer demand. Meanwhile, companies hastily developed and publicized ESG (environmental, social, and governance) goals and committed to achieving them in 2025.
Admittedly, many companies have slid sustainability goals to the back burner. However, the rapid growth in e-commerce has compelled consumers, industries, and governing bodies to shine a light on sustainable packaging to reduce the environmental impact of fulfillment and shipping.
So, what defines “sustainability” and where is the industry at with its sustainability goals?
To find out, Pregis surveyed 325 decision makers and influencers across three primary industries, including industrial (manufacturing, automotive, and transportation), retail/e-commerce, and consumer packaged goods (CPG) companies.
Overall, the survey reveals that there is a “misalignment” between the companies’ definition of sustainability versus the initiatives and resources the companies are prioritizing and implementing.
The bottom line: Businesses appear to be missing the connection between damaged goods and landfill waste. Diverting packaging waste from landfills was one of the top ways companies defined sustainability. Yet, when asked what strategies are being executed, reducing package damage was low on the list of prioritized and implemented tactics by businesses.
On top of this misalignment, key stakeholders appear to be missing from the sustainability decision-making process, which may be hindering businesses from executing an effective ESG program.
Multi-Faceted Approach Focusing on Damage Reduction
The survey indicates that 87% of companies feel it’s a priority to divert packaging waste away from landfills. However, when asked about the packaging and fulfillment practices implemented, only 40% of respondents have taken action toward reducing the number of packages that get damaged.
This misalignment creates a distinct opportunity to educate stakeholders on the profound impact of damaged goods. Frequently, both consumers and a company will dispose of damaged shipments in a landfill – ultimately polluting the environment. If companies prioritize damage reduction, they could not only accelerate their sustainability goals but save themselves from the total cost of damages, which can have far-reaching impacts on profitability and customer lifetime value.
Various Stakeholders Are Key to Making Sustainable Packaging Decisions
According to the Pregis survey, companies designated Sustainability, Finance, Operations, and Procurement as the primary departments to make sustainable packaging decisions. As the goals are becoming increasingly influenced by customers and consumers, it was surprising to see that packaging engineers (32%) and marketing (one percent) were the least involved.
Packaging engineers optimize sustainability by selecting and validating the materials to meet the performance requirements for protection and shipping. At the same time, marketing communicates the voice of the customer and conveys the sustainability value proposition to the general public.
Sustainable Packaging: The Intersection of Design, Performance, and Material Choice
The Pregis study also showed that 99% of businesses want a trusted packaging supplier to provide package design and testing services, while 70% would like their supplier to perform an environmental impact analysis of packaging.
Packaging suppliers with experienced design and engineering experts can help companies explore packaging alternatives to match their sustainability priorities while meeting performance demands and business goals. Starting with the right packaging decisions is good for the environment to reduce landfill waste and conserve resources.
There are three primary ways to strategically approach packaging to ultimately have a positive impact on Mother Nature.
Prevent: Preventing waste starts with the right packaging design for optimal protection. Packaging that under- or overprotects will likely result in damaged goods, which leads to packaging and landfill waste.
Reduce: Minimizing the amount of material used while offering proper protection is impactful. Reducing volume can be achieved by rightsizing, down gauging, or lightweighting materials. These options save on material and shipping costs while helping meet sustainability commitments.
Recycle: A key to sustainable packaging is extending its life so that it does not waste away in the landfill. Packaging can be collected, sorted, processed, and ultimately reused or made into another item.
In addition to choosing the right strategic approach for a business, it’s also imperative to determine how packaging affects three critical areas.
Package Performance: Select packaging that protects products through the shipping journey. When exploring sustainable alternatives, ask yourself: Will packaging avoid reshipment? Is it a contributor to landfill waste? Is it durable enough to withstand transit and warehousing conditions? Will the packaging protect the products’ appearance throughout the lifecycle?
Economic Impact: Always address economic factors when making any changes, including the cost of eco-friendly materials, fulfillment operations, and shipping. While recycled or bio-based packaging may carry a higher initial price, that premium could outweigh the total environmental and financial impact associated with the alternative solution. Consider the whole picture: the amount of packaging used, a package's size, shipping costs, and protective performance. Also study the cost of replacing damaged goods, including shipping and employee labor costs.
Environmental Aspects: The driving force behind sustainable packaging is to have a positive impact on the environment. There are different ways to integrate sustainable aspects into packaging, including the material composition (recycled content, bio-based materials) and choosing products that are responsibly sourced and widely accepted for recycling.
To ultimately create the right sustainable strategy, a company’s packaging supplier is key to incorporating the above components into a rigorous consultative approach that will examine multiple options, create prototypes, and test a variety of transportation environments. From this data, that supplier can recommend the right design and material choices to protect the product while minimizing waste and maximizing cost efficiencies.
Suppliers and Manufacturers: Partnering on the Sustainability Journey
At the end of the day, there are ample opportunities to make improvements and create new and innovative ways to reduce waste in landfills, preserve resources, and contribute to a circular economy. Everyone has an important part in preserving the environment and aligning sustainability priorities to meet customer and industry demands.
Companies can immediately make strides toward their sustainability objectives by engaging with a trusted packaging supplier committed to integrating these goals seamlessly into their operations. This proactive step ensures that sustainability becomes ingrained in the company's core values and practices rather than being sidelined.
Clint Smith is Pregis Sr. Director of Global Sustainability.
This article originally appeared in the January/February, 2024 issue of PARCEL.
