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Matt Alexander, Volm Companies

Creating Brand Value Through Sustainable Packaging

Consumers are increasingly interested in sustainability, and are considering it more and more in their purchasing decisions. Realizing this, retailers are looking across their businesses for ways to improve their social and environmental responsibility. However, potatoes present a unique challenge. On the one hand, consumers and retailers are concerned about sustainability. Meeting this need by improving potato packaging’s environmental footprint offers the opportunity to help differentiate one’s brand. On the other hand, however, potatoes exist in a commodity market. Any added cost to the packaging side can seem impossible for a packer to absorb. Can improving sustainability make sense for a packing facility if doing so costs more?

Over the years, some environmentally friendly packaging options have surfaced, but most options suffered from issues with the quality of the packaging, the ability to pack efficiently, cost, and true environmental value. More recently, however, there have been significant advancements to sustainable packaging options.

A large segment of potatoes are packed in entirely or largely polyethylene (PE) bags. Significant opportunity exists for market penetration by a more sustainable PE package option, so long as it runs efficiently on packing equipment and is a reasonable price. Following very substantial research and development, a PE containing a significant amount of potato starch and other natural starches is now available. This special PE blend can give up to a 35 per cent improvement in sustainability over traditional PE at a packout price increase of just one to two per cent. The latest generation of starch PE is almost indistinguishable from standard PE from a packing and shelf appearance standpoint.

If you can’t tell the difference, then what’s the point? It all comes down to branding. Advertising the sustainability improvement on the packaging is a huge opportunity to create a value association between the brand and a customer’s sustainability priority, thereby building a relationship between the brand and the customer.

A company’s environmental choices are viewed as a key element of its corporate social responsibility. According to recent research by Cone Communications and independent marketing analytics specialist, Ebiquity:

  • 84% of people consider corporate social responsibility when deciding what to buy or where to shop,
  • 82% of people consider corporate social responsibility when deciding which products and services to recommend to others,
  • 90% of consumers would switch brands to one that is associated with a good cause, given similar price or quality, and
  • nine in 10 consumers will make a purchase or boycott a purchase based on a company’s corporate social responsibility practices.

Mega-chains from Walmart to McDonald’s to Loblaws now have stated sustainability improvement targets. Because the biggest share of their overall environment footprint depends on their supply chain’s choices, these companies are starting to demand sustainability improvements backwards up the value chain.

As consumers continue to look to retailers for sustainable options, retailers will turn to the packers, and the packaging market will dramatically change. The opportunity to get noticed is now: the first packers to create a brand image of sustainability will have a big advantage going forward.

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