Chapter 2: Sustainability Starts to Become a Focus
Sustainability is becoming a significant focus for many CPG brands, and for good reasons. Amid the pantry-stocking rush in early March 2020, dollar sales of sustainably marketed consumer goods rose 56%. There’s clear consumer demand for sustainable goods, whether they feature sustainable packaging or environmentally safe ingredients. Customers also want to buy from brands that share their values and incorporate CPG environmental stewardship into the rest of their business model.
CPG brands are noticing these consumer trends, and 40% are responding with goals for sustainable packaging. Meanwhile, CPG companies are also adopting comprehensive sustainability strategies, including sustainable packaging for their brands’ products, emissions reduction and other goals to make their products more eco-friendly.
Why Sustainability Matters for CPG Brands
The modern consumer responds well to purpose-driven messaging and is looking for ways to be sustainable. For example, in an innovative biometrics study, researchers discovered that 79% of consumers feel deeper connections with brands that share their values and lead with purpose. In the CPG product category of household cleaning products, 95% of brands that use purpose-driven marketing make consumers feel better, and 86% foster a positive emotional connection.
Choosing certain CPG goods can also be a large part of a consumers’ personal choice to live sustainably. Since these items are individually packaged, frequently replenished consumables, they can contribute significantly to a household’s waste generation. Thus, finding ways to reduce that waste on the product and packaging side can have a huge impact.
An analysis of CPGs across categories reveals that the share of goods with sustainability messaging grew to 16.1% in 2019, up from 13.7% in 2015. Those products accounted for 54.7% of CPG sales growth during that period. Another analysis of CPG products from 2013 to 2018 revealed that products with a sustainability claim grew 5.6 times faster than conventional products. This shows just how much consumers relate to green messaging.
Sustainability is also critical for CPG companies as a whole because customers demand it. In 2019, 93% of business executives agreed that customers would hold them accountable for their environmental impact.
What Are CPG Brands Doing to Become More Sustainable?
With so many CPG companies recognizing the need for a long-term sustainability plan, innovative initiatives specifically for CPG products have arisen. Some of the ways that CPG brands are becoming more environmentally friendly include:
- Certified plastic neutral: Companies can gain a Plastic Neutral Certification by measuring and reducing their packaging and supply chain’s plastic use as much as possible. To offset the rest, they fund the removal of low-value plastic from landfills and incinerators for recycling.
- Reusable, refillable bottles: Some companies create more sustainable packaging by manufacturing reusable glass bottles and providing refills. This is a common strategy for green cleaning companies, which may offer a concentrated liquid or dissolvable tablet that the consumer adds water to. Industries from beauty products to food and beverages have jumped on this trend by adding refill stations rather than individual packaging to the retail environment.
- Design for recyclability: While many plastic bottles are recyclable, the recyclability doesn’t always extend to the caps, pumps and sprayer nozzles. Likewise, packages may contain some recyclable components like cardboard and feature a non-recyclable plastic film window. CPG brands can combat this by designing packaging that’s 100% circular and recyclable.
- Sustainable production methods: The production methods for CPG products and their packaging can be both sustainable and cost-efficient. Sustainable manufacturing methods can minimize waste by using raw materials more effectively and reduce emissions, water usage and energy usage.
- Reducing emissions: Besides reducing carbon and greenhouse gas emissions in production, companies can also reduce emissions by optimizing their transportation logistics. For example, reducing the weight of the packaging can significantly lighten a transport truck’s load, which saves fuel. Likewise, optimizing shipping routes can also cut emissions while saving time.
- Renewable and bio-based packaging materials: Replacing traditional packaging with materials like bamboo and bioplastics makes packaging biodegradable.
- Compostable packaging materials: Certain packaging materials biodegrade even faster than most bio-based packaging, which means consumers can often compost them at home. This feature makes a clear connection with shoppers that your products will reduce their household waste generation.
- Sustainable ingredient sourcing: Food, beverage and cosmetics CPG products often contain plant-based ingredients such as corn, palm oil, sugar and coconut oil. When these companies source their ingredients responsibly, they work with farmers who use sustainable agricultural methods and limit their environmental impact. This practice can even extend to the sourcing methods used for paper goods.
Examples of Sustainable CPG Brands and Companies that Use Sustainable Business Practices
Many big-name CPG brands are embracing sustainability in full force. They are excellent examples for other CPG brands to emulate because they are making real progress toward sustainability and succeeding in the retail landscape. For instance, Unilever found that in 2019 its sustainable living brands grew 69% faster than its other products and accounted for 75% of the company’s growth.
In addition to increased profitability, CPG companies can also cut costs by going green. Nestlé saves $0.72 per pound of plastic resin by producing thinner plastic bottles. The strategy reduces chemical usage and emissions during plastic production and makes the bottles lighter and cheaper to transport. Switching from plastic bottles to aluminum cans can also be profitable because aluminum weighs less and is easier to recycle. As another example, Lagunitas Brewing Co. saves more than $1 million a year in utility costs with its innovative water treatment system.
Some CPG brands that are innovating through sustainable packaging and business practices include:
- PepsiCo: In 2019, PepsiCo launched a comprehensive sustainability initiative that included goals for agriculture and water usage. They have set an aggressive plan for sustainably sourcing 100% of key ingredients by 2020.
- The Clorox Company: Household cleaning products company Clorox has set sustainability goals to reduce its use of virgin plastic and fibers in packaging by 50% by 2030. They also aim to make their packaging 100% recyclable, reusable or compostable by 2025.
- Danone: The CPG company behind brands such as Activia® yogurt and Evian® water has set aggressive goals to reduce its carbon footprint. On its planned trajectory, it will reach net carbon neutrality by 2050.
- L’Oreal: Cosmetics brand L’Oreal has set the goal that 54% of their new or updated products will feature a formula with a smaller environmental footprint. Additionally, 78% of their new and updated products will have packaging with a lower ecological footprint.
- Mars: Mars, the CPG giant behind Pedigree®, M&M’s®, Ben’s Original™ and many more, has released a comprehensive “Sustainable in a Generation” initiative. By 2025, they will reduce virgin plastic use by 25%, reduce unsustainable water usage by 50%, and reduce total greenhouse gas emissions by 27%. They will continue to cut greenhouse gas emissions by 67% by 2050.
How CPG Sustainability Can Extend into the Retail Landscape
Creative Displays Now! prides itself on creating retail packaging and displays using 100% recyclable corrugated cardboard containing 60%-95% post-consumer waste.
As another potential option, point-of-purchase (POP) displays can promote CPG brands’ sustainability programs. You might use them to highlight your company-wide goals or if your product or packaging contains clean ingredients. If you want to take your POP display sustainability a step further, you can handle display recovery to ensure it is properly recycled after the campaign.
Creative Displays Now! can design retail packaging and displays using the recyclable and post-recycled materials your customers expect. Contact our team to get an estimate on your green POP campaign or recyclable retail displays. Or, give us a call at 1-866-244-2214 to get started on your project today.