Building Better Business with Sustainability

Building Better Business with Sustainability

As upstream supply-chain partners for retailers and downstream partners for growers, consumer packaged goods (CPG) manufacturers and co-packers live with the bullwhip effect. The bullwhip effect causes more significant upstream order variability and inventory requirements because of downstream signals, demand, and pricing. As the changes and signals travel up, each link in the supply chain reacts, which becomes a signal for the next link. The stimulus and response both grow as they move upward. Proctor and Gamble and IBM separately documented the effect; P&G found it in their Pampers baby diaper product line and IBM in the launch of the Aptiva personal computer – both in the mid-1990s.

Mid-stream partners feel bullwhip effects

CPG manufacturers and co-packers are especially susceptible to these problems because they sit between a variable demand generator, retailers, and a variable supply source, farmers, and growers. The solutions to the bullwhip effect are increased information sharing, better channel alignment, and improved operational efficiencies at each level of the supply chain. Over the past few decades, improvements in communications technology, inventory management software, and increased retailer competition have driven efficiencies and increased productivity in the retail produce supply chain.

Consumer demand drives initiatives

Consumers today are growing more aware of how their food is grown, how it is packaged, and how it is brought to market. Retailers want their customers to think of them positively, so they launch efforts to meet those demands. Consider these corporate-wide efforts from some of America’s largest grocery retailers:

  • Walmart wants to double the sales of locally-grown produce in the United States
  • Kroger will use at least 20% post-consumer recycled content in its private label packaging
  • Albertson’s will provide clear recycling communications on their private label packaging, including the use of QR codes, by 2022.

Bullwhip effects are varied, too

Not all bullwhip effects are equal. Some travel from the end consumer up to the first link in the chain, while others find their end mid-stream. For example, Walmart’s push for local produce will change what growers will plant and where manufacturers source their inputs. On the other hand, Albertson’s and Kroger’s packaging demands will affect how co-packers and CPG manufacturers produce their goods. These requirements mean increased variability – more packaging variants, changing requirements, frequent line changes, and more. Each brand comes up with its initiatives, each one of those is a new customer requirement for you, the manufacturer or co-packer, to meet.

At Greif, we help our customers adapt to the changing packaging landscape through a discovery and onboarding process that puts the product, the package, the producer, and the process at the center of our efforts. We work to help our customers use adaptability and flexibility as a competitive advantage in today’s dynamic, sometimes chaotic, market.

Exclusive sustainability toolkit

If you’d like to learn more about how Greif CPG can help you better meet the customer requirements of tomorrow – we’re excited to let you know about our new sustainability toolkit!

  • Our latest ebook: Growing Challenges in the Consumer Packaging Supply Chain
  • Infosheet: Recycling and Reconditioning Services for Mid-Stream Manufacturers and Co-Packers 

Do you have a challenge that you need to tackle today? Reach out, and we’ll start working towards our 6P Onboarding Process.

Posted by Brian Harrington in Private Label, Sustainability
Foodservice Packaging: A Complicated Relationship

Foodservice Packaging: A Complicated Relationship

Around the world, a growing part of the population is saying that their relationship with foodservice packaging – like containers, wraps, trays, and tubs – is complicated. Indeed, people love the convenience of single-use foodservice containers. Any time we order take-away, fast food, and at a growing number of fast-casual restaurants, we use single-use containers. Worldwide, the foodservice packaging industry stands at about $53 billion in 2019, and analysts expect that number to double by 2025, reaching almost $91 billion nearly. We love the convenience of getting food quickly and going about our busy lives.

Foodservice packaging solves a serious problem

One of the primary benefits of foodservice packaging is sanitation. The first single-use foodservice container was a paper cup, invented in 1907 by Lawrence Luellen, a lawyer from Boston. As people moved into cities during industrialization, communicable diseases ran rampant through growing urban centers. Typhoid, diphtheria, cholera, and polio were common infections and killers. To give you an idea, in Indiana, a low population density state then and now, diphtheria killed 3,727 people in 1893 alone. That was more than 9-1/2 times the number of people who died from smallpox. In the cities, it could be even worse. The paper cup spawned a new industry – one that saved countless lives.

Another reason we like food packaging is that we believe it helps us prevent food waste. There’s an inherent value to food that we all appreciate. Even in times of plenty, the idea of throwing out perfectly good food is unacceptable to many. Unfortunately, it’s a tradeoff. A lot of food packaging, including foodservice packaging, is made of plastic. Single-use plastics contribute to our most significant source of municipal solid waste (MSW) – plastic.

Foodservice packaging causes some serious problems, too

Food waste isn’t far behind plastic in the MSW charts. Food, though, is organic and biodegrades. Many communities around the world have started municipal composting efforts, separating food waste from the rest of the MSW stream. These in-home sortation efforts echo glass, metal, and plastic recycling efforts.  

Awareness among consumers is growing. The Foodservice Packaging Institute (FPI), over the past five years, has shown that the public believes that foodservice packaging is waste.  This perception is backed up by search trend data from Google. Over the past ten years, searches for the term “single-use plastic” has grown exponentially. People are concerned about the environment and are interested in how their choices impact their world.

Consumers want the good without the bad

Public perception is one challenge among many in the foodservice packaging landscape. As FPI noted in both their press releases, consolidation through mergers and acquisitions, rising labor costs with fewer available workers, price pressure from buyers, and increasing raw material costs are affecting the industry year in and year out. These concerns exist across the foodservice industry. Restauranteurs face rising operating and food costs and new minimum wage laws while dealing with a more competitive landscape than ever before.

At Greif LA Paperbox, we work to help our customers do better for their customers and the environment every day. Restaurants’ foodservice packaging choices communicate their values to their diners. Their customers are looking for better quality, healthier, more environmentally conscious choices. Fast food, take-out, and fast-casual food require single-use foodservice packaging. Choosing paperboard single-use foodservice containers from LA Paperbox lets you show off high-quality, healthy food with a clear environmental message.

To find out more about LA Paperbox, get in touch with us. We’re always happy to talk.

Posted by Brian Harrington in LA Paper Box, Sustainability
Conflict and Collaboration Spur Sustainable Packaging Innovation

Conflict and Collaboration Spur Sustainable Packaging Innovation

The consumer goods marketplace is continuously evolving. Manufacturers and contract packagers must adapt to changing demands from retailers, consumers, and upstream partners. Retailers want shorter lead times and smaller on-hand inventories; consumers demand high-quality, sustainable, responsible goods. Retailers represent their and their customers’ interests when working with manufacturers and contract packagers – so their demands get co-mingled. For example, smaller shipments in sustainable, compostable packaging. All of this at a better price than before. These demands put manufacturers and contract packagers in a tight spot – how do they meet the requirements of their customers, remain profitable, and do it all at a faster pace than ever before?

Conflict arises when positions collide

Conflict often arises when parties have competing positions and interests. For example, when you and your business partner have different ideas about money and how it should be allocated or when you and a colleague disagree on the best way to move forward on this quarter’s production goal. Conflict gets a bad rap sometimes – especially in supply chain vendor-customer relationships. Addressing conflicts means talking about how we disagree about how our goals and aspirations collide. Thinking about talking about conflict can build anxiety – we worry about the worst-case scenario: that by addressing the conflict, the other party will abandon us and go to our competitor.

The fear and anxiety build because we think about conflict as win-lose or lose-lose: giving in means that we lose, forcing means that the other loses, and compromise means that we both lose. But it doesn’t have to be that way. There’s a way for both parties to win – it’s called collaboration.

Collaboration: Building wins for both sides

Collaboration is everywhere. The term pops up with team-working software, business initiatives, and, for our purposes, with problem-solving. Collaborative problem-solving is a conflict resolution technique. In a nutshell, conflicting parties differentiate the issues that are behind their position, find common ground on issues, and build a win-win solution by embracing issue-based problem-solving over position-holding conflict.

For example, most of Procter & Gamble’s product line is sold in plastic containers. But even they are not immune from the customer and retailer demands to reduce single-use plastics for packaging. Recycled plastics usually are mechanically recycled, which can degrade the quality and limits reuse. Using recycled plastic can be an issue for companies, like P&G, whose products require a specific type of plastic and whose branding relies on clear plastic.

According to Meg Wilson at GreenBiz:

Polypropylene, for example, is one of the most widely used plastics, but its recycling rate is abysmal — less than 1 percent. That’s because the post-consumer product is a multicolored blend of feedstocks that can be reprocessed only into durable black plastic.

Recently P&G took on an initiative to invent a hybrid mechanical-chemical technology that reprocesses recycled plastic into clear pellets. P&G has led an open-sourced, collaborative effort to build a solution – The Closed Loop Fund and Innventure have funded this project and are helping to scale it up to a commercial venture called PureCycle. The first commercial facility in Ohio is expected to produce over 105 million pounds of recycled polypropylene annually by 2020.

Conflicting demands present an opportunity for collaboration

Collaboration is a powerful tool for conflict. For food manufacturers and contract packagers negotiating multiple, conflicting retailer demands, can present opportunities.

Retailers’ sustainability initiatives are positions built on several issues, such as consumer demands for environmentally conscious packaging and quality products as well as shareholder expectations for quick deliveries and cost control. Food manufacturers and contract packagers have positions, too, that are informed by issues like capital investment, forecasting, inventory, and run size to name a few. Simply identifying these issues presents opportunities for collaboration, solution, and innovation.

Sustainability efforts can fuel growth

CoPackers need to take a step back from wondering, “How much is this going to cost me?” and start thinking of how they can create value. Consider thinking of ways to reducing risk, save operating costs, differentiating, and improving your brand reputation instead. Focus less on the pain of making changes and more about the output when you produce better products and processes.

A partner like Greif CPG provides the knowledge and experience to build processes and packaging solutions that bring innovative solutions to the table. We believe that the best packaging solutions are built when everyone’s concerns and needs are heard, considered, and addressed. And our 6P onboarding process ensures that the product, the process, and the people involved are fully at the center of every solution we create.

To keep this conversation going, let’s get in touch.

Posted by Brian Harrington in Private Label, Sustainability