The Untapped Market of Sustainable Packaging in eCommerce

If you read that title and then read it again, you’re not alone. When we dug into this research, we did a double take too.

A international study performed by Unilever shows that a third of consumers are basing their purchase decisions off of sustainable packaging practices and proof of positive social impact. And not only are consumers become more aware of sustainable packaging options, they’re also placing a bulk of the eco-responsibility on the businesses themselves.

What does this mean? People prefer to purchase from businesses that are manufacturing and packaging food products using recyclable materials.

How strong of a preference, you ask?

Strong enough that 51% of participants would be willing to switch to a new product if they could recycle the packaging. Of these, more than half state that they would be willing pay a small amount more for that new product if the packaging was recyclable.

Did you catch that?

People are willing to switch to new products that are similar to their current favorites, and pay more for them if the new product is recyclable.

The proof is in the financial review.

The data from this study was further supported by Unilever’s own financial performance review. Of the hundreds of brands that it owns, those businesses that chose to integrate sustainability and/or positive social impact delivered nearly half of the company’s global growth for the year. Collectively, these businesses are growing 30% faster than those that haven’t shifted focus toward sustainability or positive social impact. (Examples include Dove, Hellmann’s, and Ben and Jerry’s.)

Hold up now. Is this for real?

Could this be ‘fake news’? Is sustainability really such a factor that people are even willing to switch brands over it?

Yes. It seems that consumers have shifted their loyalty from specific brands to specific principles instead. Environmentally-friendly and socially-responsible products are just two of those principles.

There’s money to be made.

Unilever’s research team calculated that there is a huge unclaimed market out there — in the realm of $1.03 trillion.

Considering that 78% of their American participants ‘feel better’ about choosing to purchase products from businesses committed to sustainability, it’s safe to assume that a significant portion of that unclaimed market lies right here in the United States.

This is a huge consumer base that remains a largely untapped territory, and a gigantic opportunity for burgeoning DTC eCommerce startups. All this buzz over eco-consciousness and recyclable plastics could be the differentiator for new customers — not to mention improve brand trust and brand image with existing customers as well.

After all, 78% of American consumers constitutes a pretty big number.

If you need more convincing, just look at the regulatory trends.

The push toward sustainable manufacturing has prompted lawmakers to enforce regulations that require business to create and maintain more eco-friendly sourcing and processing methods. A perfect example lies in this little story about General Motors.

In 2002, General Motors ignored the new voluntary emission standards created by the California Air Resource Board. They assumed it would be years before it was required — if ever. In 2016, those voluntary standards became law. General Motors was left in the dust as other companies who’d chosen to make those green upgrades before it was required continued vehicle production without even a blip.

Another example is Hewlett Packard’s choice to eliminate lead soldering in their manufacturing processes. They chose to instead develop modern and sustainable alternatives. This switch suddenly opened up an enormous new market within the European Union. They got into this massive market and got ahead of their competitors. Lead soldering is now illegal.

Environmental awareness isn’t going anywhere.

…and it’s only a matter of time before new laws are issued to enforce sustainable manufacturing. So, instead of trailing along behind others who are spotting this huge trend and taking advantage of the untapped market, making the switch now could open up big opportunities and save you from a massive headache down the road.

Okay, give me the deets. What qualifies as sustainable packaging?

The Sustainable Packaging Coalition has created some guidelines to help us define what is and is not considered ‘sustainable’.

True sustainable packaging must meet the following:

1. Is beneficial, safe, and healthy for individuals and communities throughout its life cycle*.
2. Meets market criteria for performance and cost.
3. Is sourced, manufactured, transported, and recycled using renewable energy.
4. Optimizes the use of renewable or recycled source materials.
5. Is manufactured using clean production technologies and best practices.
6. Is made from materials healthy throughout the life cycle.
7. Is physically designed to optimize materials and energy.
8. Is effectively recovered and utilized in biological and/or industrial closed loop cycles.

The Sustainable Packaging Coalition also helpfully provides metric frameworks to assess how well any given package fulfills their definition.

To summarize, sustainable packaging means it’s sourced from renewable and safe resources (preferably recycled), it’s created using the fewest resources or with renewable energy, and the end product is recyclable, reusable, and/or biodegradable.

*Life cycle of a material means from the sourcing the raw or recycled materials, through the manufacture of the package/product itself, and its biodegradability and/or recyclability after its uses have been exhausted.

Reduce, reuse, recycle.

Just remember the three R’s

Most of your packaging options can be categorized into three areas of sustainability.

• Reduce: Focus on thinner, lighter, tougher materials that get the job done, but use fewer materials to do it.
• Reuse: Package in products that encourage reuse. Resealable containers, sturdier boxes, and even investing in beautiful packaging that customers want to reuse can increase reuse capabilities.
• Recycle: Manufacture with recycled materials that can be recycled again after they land in the hands of the consumer.

Yeah, I’m not sure my eCommerce Biz can afford to make this switch.

You absolutely can. Aside from the potential market and boost in revenue thanks to happy eco-conscious Americans who now are considering switching to your brand, the choice to move to sustainable packaging won’t break the bank.

In fact, sustainability can actually be a cheaper option.

Consider — which is less cost effective?

1. Harvesting fossil fuels and refining them
2. Gathering or purchasing recyclable materials and recycling them

The switch is easier than you might think. Choose to work with or make the switch to manufacturers that are already committed to minimizing or eliminating the use of toxic chemicals and carcinogens. Find suppliers that offer flexible packaging options that can reduce freight costs and greenhouse gas emissions.

The cost-reduction alone would make the switch worth your trouble, even without the 1.03 trillion potentially available untapped dollars.

Dolla’ dolla’ bills, y’all.

Here’s how you can get started.

This depends on the size of your eCommerce business, the processes you’ve already got in place, and the food products you’re creating. So, you may not be able to implement all of these suggestions.

But, we obviously can’t convince you to make a switch and then fail to give any suggestions on how to actually do it.

• Switch to recycled fibers for packaging and shipping containers.
• Stop using paper products from sources with controversial forestry practices.
• Manufacture with renewable and naturally biodegradable materials.
• Avoid toxins in literally every area that you can. An example is BPA-free.
• Increase packaging efficiency to reduce the need for filler materials.
• Opt for lighter-weight packaging to lower freight costs.
• Choose transportation methods that have a low carbon footprint.
• Encourage your consumers to recycle. Make recycles instructions clear on your packaging
• Embrace in-house recycling. Companies like TerraWaste are striving to make this as easy as possible for small and large businesses.

Don’t miss your chance.

The public have high expectations when it comes to brands choosing to have positive social and environmental impacts, and the businesses that get it right? They’ve got an unprecedented opportunity.

Keith Weed, Unilever’s Chief Marketing and Communications Officer, summarizes our top takeaways from this massive study best:

“This research confirms that sustainability isn’t a nice-to-have for businesses. In fact, it has become an imperative. Brands must act quickly to prove their social and environmental credentials and show consumers they can be trusted with the future of the planet and communities — as well as their own bottom lines.”

Want to take a look at producing some new packaging using some of these renewable concepts?

We’re happy to help create the branding, design, and positioning to get you ahead of the curve.

Let’s talk.

Love,
Mammoth Factory

P.S. Just in case you were caught up in a cloud of woe over the current environmental state, here’s a pick-me-up for you. According to this self-proclaimed garbologist, our total production of waste in the U.S. has decreased a whopping 39% in 20 years. Share that little nugget of joy the next time your chronically cynical coworker is spouting off doomsday scenarios at the water cooler. You’re welcome.