27th Oct 2020
Covid-19 has fundamentally changed retail supply chains, with consumer demand proving turbulent and exceeding that of other seasonal peaks for some retailers, while others have been severely impacted.
Businesses have had to adapt, at pace. Firstly by responding to an increase in online customers and a migration to ecommerce by all consumers, to managing stock availability with overseas suppliers during lockdown restrictions. There’s also been an immediate requirement for new packaging for new products, along with delivery options to support products traveling to the customer in new ways. All while operating safely with a reduced workforce and capacity because social distancing measures are in place.
Our latest research, conducted as part of our Future of Packaging report: Covid-19 update, found that at least 50% of business’ future packaging strategies will be influenced by the increase in online shopping. In addition, 40% of companies also now believe that the increased demand from consumers for more sustainable packaging materials will have the most influence on their packaging strategies.
While Covid-19 presented overwhelming challenges, such a seismic shift has presented an opportunity for businesses to re-evaluate their packaging strategies and build sustainability into the packaging lifecycle and supply chains.Even while bricks and mortar retail has reopened, consumers who have previously chosen to shop in-store have shifted to buying more online and feel more comfortable doing so with the convenience that it offers. In fact, 77% of consumers expect they will continue to purchase more online once lockdown is over. To build on existing revenue streams, and to generate new opportunities, retailers are investing heavily in ecommerce capabilities and packaging solutions that are fit for purpose.
In current ecommerce supply chains one item can be handled up to 20 times, so it’s critical to ensure that changes to the manufacture of a packaging product or process do not present a negative knock-on effect on the environment or operational requirements i.e. during storage, handling and distribution, particularly with more doorstep deliveries. It’s also important to consider the number of touchpoints that are necessary and where this can be reduced as part of increased hygiene protocols. We know that ‘type of packaging material’ will continue to influence packaging strategies considerably, rising from 45% for companies now, to 57% in the next decade, this is reinforced by the increased consumer demand for brands to use more sustainable packaging materials. To meet this increased demand, retailers should be questioning if it is viable to look at new sustainable and renewable materials such as GreenPE – a thermoplastic resin made from sustainably derived sugarcane that produces a high-quality, lightweight and durable material – or packaging with more recycled content.
The packaging lifecycle
40% of the businesses we surveyed told us the greatest impact of the pandemic in the packaging lifecycle would be through improving recycling and reusability. We’re already experiencing a huge demand for good quality waste polythene that can be recycled and reused at a high percentage to create new products without affecting performance, alongside a considerable uptake in closed-loop recycling systems. More and more retailers are segregating their post-consumer waste from returned items, which can be collected and recycled to create material for their new packaging items to deliver a truly circular model.
An example of this is premium fashion retailer, Joules, and its current trial of a click and collect bag that comprises 50% recycled waste with 50% GreenPE, with the aim of replacing the 50% recycled waste with Joules’ own post-consumer waste to implement the first stage of circularity into its packaging systems. By utilising the waste polythene generated as part of its business processes, segregating it and working with Duo to recycle it, Joules is reducing its dependency on virgin plastics and supporting the business’ own material demand.
Packaging design for a circular economy
According to our research, 31% of businesses stated that Covid-19 has led them to reconsider their packaging strategy to focus on end of life options. Businesses are now handling and delivering more packaging to consumers’ homes, meaning the volume of packaging material used – and at-home recyclability of material – has been brought to the fore more than ever before. Reverse logistics processes, such as retailers requesting customers to return their unwanted packaging as part of the returns process, helps towards controlling the end of life destination of the packaging product. This also enables retailers to recycle valuable commodities and utilise the material for new products.
We believe the real opportunity for companies to improve sustainability in the packaging lifecycle lies at the beginning, starting at the R&D and design stage. Such as, reducing the size of packaging or using a super strength polythene blend that’s thinner but doesn’t compromise on durability, offers both cost savings and environmental benefits.
Removing paper labels from plastic packaging and printing information directly onto the item reduces contamination and will create a better quality of recycled material that can be reused as part of a circular approach. We’re the first packaging manufacturer to combine this printing technology to offer a unique paperless label mailing bag, which can also be manufactured using sustainable GreenPE polythene.
Other design features to reduce packaging waste and improve sustainability, include a second glue strip that allows the original packaging to be used again for returns, support a reverse logistics strategy and allows businesses to gain value back from waste packaging material as part of a closed-loop recycling system. Increasing communication with customers should also be considered within the packaging lifecycle. Using on-pack messaging or scannable QR codes to explain choice of material, end of life options or provide detail on the company’s wider sustainability strategy will engage customers to make them part of your commitment. With less footfall predicted in-store, on-pack messaging will also prove vital for brands to connect with customers and provide information quickly and effectively.
Sustainable Supply Chains
Improving packaging sustainability is a complex challenge. While there’s no one-size-fits-all solution, we know our best chance of finding the right solutions will come from a holistic, systematic approach that will require collaboration of stakeholders along both value and supply chains.
Something we’ve seen evidence of in response to the impact of Covid-19 on supply chains, is the speed and ability to adapt and work cohesively, something we must harness to truly transform supply chains in the future.
Companies have had to take a cost-neutral approach to their supply chain to become more agile and prioritise locality over cost. Developing more local supply chains as part of future packaging strategies will also bring environmental benefits with reducing distances for transportation.
For a true circular economy approach to packaging supply chains, we need to focus on developing new pooling solutions for reusable (transit) packaging, offer convenient packaging return schemes and support the scale-up of recycling infrastructure in geographical hot spots for plastic waste. Businesses need to challenge governments to work cohesively to create more consistent regulations that deliver real incentives for reusable packaging models that are truly sustainable from design right through to delivery.
Our research also found that, currently, less than a third (28%) of businesses are prepared to meet the UK’s Plastic Packaging Tax, which comes into effect in April 2022. The percentage of recycled polythene used in the packaging product is something businesses should be scrutinising now within any product currently in circulation, testing new prototypes to ensure they can be implemented ahead of April 2022.
We know the challenges presented by Covid-19 are not over, and as consumer behaviour continues to evolve, we must take a collective approach to packaging strategies – across organisations and with suppliers. Undoubtedly there will be more knock-on effects to come, but if we take the opportunity to assess what we’ve learned so far and begin implementing change at the beginning of the packaging lifecycle, we can harness this opportunity to create positive, sustainable change.
Featured on Internet Retailing October 2020
The Future Of Packaging Report: Covid-19 Update