SUSTAINABLE PACKAGING PREPAREDNESS
Results from Schawk’s 2007 Sustainability Insight Survey
Results from Schawk’s 2007 Sustainability Insight Survey
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CONTENTS
2 SUSTAINABLE PACKAGING PREPAREDNESS IN THE CPG AND RETAIL INDUSTRIES I. About this Report II. Key Findings III. About the Survey IV. Participation V. Results A. The Impact of Sustainability on Consumer Product Goods and Retail Companies B. The Impact of the Wal-Mart Challenge on Product Goods and Retail Companies C. Preparedness Measures in Meeting Sustainability Challenges and the Wal-Mart Scorecard Standards D. Vendor Expectations Related to Meeting Sustainability Challenges LOOKING FORWARD
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Results from Schawk’s 2007 Sustainability Insight Survey
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SUSTAINABLE PACKAGING PREPAREDNESS IN THE CPG AND RETAIL INDUSTRIES
I. About this Report
Last fall, Schawk Inc., a leader in brand image management solutions to the consumer products packaging industry, conducted a survey within the consumer product goods (CPG) and retail industry to determine corporate perceptions about packaging environmental sustainability and, more specifically, about Wal-Mart’s sustainable packaging challenge. The purpose of this report is threefold: 1. To present perceptions within the CPG and Retail industries related to the need for sustainable packaging 2. To identify the impact Wal-Mart’s sustainability initiative to reduce packaging materials by 5% by 2013 has had on the CPG and Retail Industries 3. To determine the amount to which consumer packaging companies and retailers rely upon outside vendors for their sustainable packaging advice
Results from Schawk’s 2007 Sustainability Insight Survey
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II. Key Findings
WE ARE AWARE…NOW WHAT? While it is apparent that almost everyone is aware of the need to address sustainable packaging, many CPGs and retailers feel that their initiative is in its infancy. In some cases, given the intricacies of corporate communication networks, there is a lack of internal awareness of the current state of the initiative, though almost everyone acknowledges that something is happening. ALL SUGGESTIONS ARE WELCOME Companies are willing to use every available resource for environmental sustainability input, internal associates, trade associations, converters, graphic companies and design firms. FROM PLANNING TO PROCESS – IT’S AN EVOLUTION Most companies do have a packaging environmental sustainability plan. Developing packaging with a “Cradle to Cradle” perspective is a complex challenge. Creating the infrastructure to nurture this will be an evolutionary endeavor. THE WAL-MART “CHALLENGE” IS JUST THAT – A CHALLENGE While only a minority of companies stated that they would be able to meet the Wal-Mart timeframes, it appears that many have at least made substantial progress on packaging audits and data entry. As of February 1, 2008, the Wal-Mart packaging scorecard became an active consideration for sourcing; 6,371 vendors have entered scorecards for 97,000 SKUs.
Results from Schawk’s 2007 Sustainability Insight Survey
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III. About the Survey
Consumer packaging goods companies worldwide have been challenged by Wal-Mart and other retailers to comply with a sustainable packaging strategy. These retailers have requested a packaging strategy, process, and workflow plan from their vendor base in order to achieve compliance. Design/graphics companies deal directly with the marketing departments of these consumer packaging goods companies and are seen as impartial vendors that interact throughout all areas of the supply chain. As a result, design/graphics companies are well-positioned to be engaged as consultants and subject matter experts in sustainability for packaging throughout the entire supply chain. This survey of corporate representatives from CPG and retail companies was developed and executed to gain insights around these four guiding questions: A. HOW ARE THE CONSUMER PRODUCT GOODS AND RETAIL COMPANIES IMPACTED BY SUSTAINABILITY? B. HOW ARE THESE COMPANIES AFFECTED BY THE WAL-MART “CHALLENGE”? C. WHAT ARE THEIR SHORT, MEDIUM AND LONG-TERM PLANS TO MEET THE SUSTAINABILITY CHALLENGES AS PRESENTED BY THE WAL-MART SCORECARD? D. WHAT ARE THE CONSUMER PRODUCT GOODS AND RETAIL COMPANY’S EXPECTATIONS OF THEIR DESIGN/GRAPHICS VENDORS TO MEET THE SUSTAINABILITY STANDARDS PRESENTED BY THE WAL-MART “CHALLENGE”?
IV. Participation
The respondents to the survey were dispersed throughout the United States and Canada in a number of different packaging areas in consumer products goods and retail companies. All respondents were involved in packaging and had packaging purchasing authorization including representatives from procurement, marketing, graphics management, packaging engineering, project management, sustainability packaging management, creative management and production management.
Participant profile
Average Company Size Average Yearly Revenue Average Respondent Tenure 42,000 Employees $10.4 Billion USD 18 Years 83% Consumer Product Goods 17%
Retail
Results from Schawk’s 2007 Sustainability Insight Survey
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V. Results
The results of this survey provide a benchmark for CPGs, answering the question: “Where are we in relation to the rest of our class?” The survey should also increase retailers’ awareness that this initiative will raise costs to CPGs. However, with proper planning, these costs will be offset by savings derived from increased packaging reduction measures. The survey results and subsequent analysis provide a method for design/graphics companies and their clients to become sustainable and to continually assess the marketplace for new sustainability trends and technologies in packaging which could create impact with their clients. The results have been broken down into the following four parts: A. THE IMPACT OF SUSTAINABILITY ON CONSUMER PRODUCT GOODS AND RETAIL COMPANIES B. THE IMPACT OF THE WAL-MART “CHALLENGE” ON CONSUMER PRODUCT GOODS AND RETAIL COMPANIES C. PREPAREDNESS MEASURES IN MEETING SUSTAINABILITY CHALLENGES AND THE WAL-MART SCORECARD STANDARDS D. VENDOR EXPECTATIONS RELATED TO MEETING SUSTAINABILITY CHALLENGES
Results from Schawk’s 2007 Sustainability Insight Survey
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A. THE IMPACT OF SUSTAINABILITY ON CONSUMER PRODUCT GOODS AND RETAIL COMPANIES
While 83% of respondents’ companies are impacted by packaging sustainability, 67% are already being held accountable by their clients to comply with industry mandates regarding sustainability. At the same time, only 35% have a clear definition of sustainability in regard to packaging and a mere 20% have actually factored the cost of meeting compliance into their budgets.
How has your company been impacted by sustainability?
PERCENTAGE OF RESPONDENTS WHO STRONGLY AGREE AND AGREE
My company is being impacted by packaging sustainability Sustainability will be a factor in my company’s packaging purchasing decisions My company understands what the sustainability issues are which affect packaging My company’s clients are demanding packaging sustainability accountability Sustainability in packaging is a very important initiative for my company Our supply chain is impacted by packaging sustainability Sustainability is an important consideration in packaging design My company is aware of the packaging legislation that will impact us There is a clear definition of sustainability referring to packaging My company has budgeted an additional expense to meet packaging sustainability compliance
82.7% 72% 70.7% 66.6% 64% 62.7% 61.3% 54.3% 34.7% 20%
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B. THE IMPACT OF THE WAL-MART “CHALLENGE” ON PRODUCT GOODS AND RETAIL COMPANIES
Sixty-seven percent of respondents affirm that their companies are impacted by the Wal-Mart packaging sustainability program; however only 28% responded that their companies have a comprehensive plan in place to address compliance issues. Additionally, only 17% of respondents’ companies have allocated financial resources to meeting the Wal-Mart packaging challenge.
How is your company affected by the Wal-Mart “Challenge”?
PERCENTAGE OF RESPONDENTS WHO STRONGLY AGREE AND AGREE
My company is aware of the Wal-Mart scorecard and the 7Rs My company is being impacted by the Wal-Mart packaging sustainability program My company’s supply chain is impacted by the Wal-Mart packaging challenge My company has a comprehensive packaging sustainability plan My company has created a budget to meet the Wal-Mart packaging challenge
76.3% 66.7% 51.4% 27.8% 16.7%
Results from Schawk’s 2007 Sustainability Insight Survey
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C. PREPAREDNESS MEASURES IN MEETING SUSTAINABILITY CHALLENGES AND THE WAL-MART SCORECARD STANDARDS
While 39% of respondents think they will be able to meet the deadlines set forth by packaging sustainability challenges, only 18% of respondents feel that their companies are adequately staffed to address these issues. Seventy percent of respondents’ companies currently have plans in place to address these challenges – from internal committees to improving packaging substrates – though 68% still feel that they would find value in a presentation for the development of plans to meet these challenges.
What are your short, medium and long term plans to meet sustainability challenges and/or the Wal-Mart scorecard?
PERCENTAGE OF RESPONDENTS WHO STRONGLY AGREE AND AGREE
My company would value a Schawk/Anthem presentation for the development of plans to meet the sustainability and/or Wal-Mart initiatives My company will be able to meet the packaging sustainability challenges in the imposed timeframes I feel my company’s packaging sustainability plans are focused to meet the sustainability challenges It would be helpful if Schawk/Anthem presented to your company’s supply chain vendors My company is adequately staffed to address packaging sustainability issues My company has considered employing an outside source to help drive our packaging sustainability efforts
68.1%
39% 34.7% 34.7% 18% 16.7%
Results from Schawk’s 2007 Sustainability Insight Survey
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C. PREPAREDNESS MEASURES IN MEETING SUSTAINABILITY CHALLENGES AND THE WAL-MART SCORECARD STANDARDS What are your current plans to meet sustainability challenges and/or the Wal-Mart scorecard?
PERCENTAGE OF RESPONDENTS
Improvement in Packaging Substrates 30% 40%
Formation of an Internal “Green” Committee
26.7% 3.3% No Plans Other or Not Applicable
Results from Schawk’s 2007 Sustainability Insight Survey
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D. VENDOR EXPECTATIONS RELATED TO MEETING SUSTAINABILITY CHALLENGES – PART 1
While most respondents’ companies are comfortable getting recommendations from their packaging vendors, and feel that those vendors can help develop and implement plans for sustainability compliance, the most common sources for advice on sustainability are internal resources (74%) and trade associations (57%).
What are your company’s current sources for packaging sustainability advice?
PERCENTAGE OF TOTAL RESPONDENTS
30.3% Design 46.1% 23.7% 30.3% Pre-Media 42.1% 27.6% 52.6% Printers/Converters 22.4% 25% 56.6% Trade Associations 13.2% 30.3% 73.7% Internal 6.6% 19.7%
YES NO UNSURE
Results from Schawk’s 2007 Sustainability Insight Survey
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D. VENDOR EXPECTATIONS RELATED TO MEETING SUSTAINABILITY CHALLENGES – PART 2
More than half of respondents’ companies rely on their internal resources for packaging innovations, while only 19% receive solutions from their current design firms. These figures illustrate a remarkable differential between the Wal-Mart Challenge percentages and those of Schawk’s sustainability challenge.
What are your company’s expectations of your design and premedia vendors to meet the sustainability challenges as presented by the Wal-Mart “Challenge”?
PERCENTAGE OF RESPONDENTS WHO STRONGLY AGREE AND AGREE
My company’s packaging vendors can help us develop and implement plans for sustainability compliance My company feels comfortable getting sustainability recommendations from our packaging suppliers My company relies on internal resources for packaging innovation Design/premedia vendors are an unbiased resource for packaging sustainability information My company’s current design firms incorporate packaging sustainability solutions into their designs
82.7% 78.7% 62.7% 48% 18.6%
Results from Schawk’s 2007 Sustainability Insight Survey
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D. VENDOR EXPECTATIONS RELATED TO MEETING SUSTAINABILITY CHALLENGES – PART 3
The majority of respondents’ companies rely on design/pre-media vendors for information on current sustainability issues related to design (more than 60%), and almost half (46%) for information pertaining to Wal-Mart’s initiative. Respondents’ companies, however, don’t often rely on their design/pre-media vendors for compliance audits.
What resources does your company currently rely on design and pre-media vendors for?
PERCENTAGE OF TOTAL RESPONDENTS
Current sustainability information related to design Current Wal-Mart information related to design Workflow and process improvement for sustainability
60.3% 9.6% 30.1% 45.8% 26.4% 27.8% 41.1% 26% 32.9% 23.3% 30.1% 46.6% 23.3%
YES NO UNSURE
Sustainability audits for compliance
Supply chain audit for compliance Presentations to your company regarding sustainability and compliance issues
35.6% 41.1% 61.6% 11% 27.4% 34.3% 28.8% 37% 35.6% 19.1% 45.2%
Presentations to the supply chain Help in Asia with printers and manufacturer’s supply chain
Results from Schawk’s 2007 Sustainability Insight Survey
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LOOKING FORWARD
Whether meeting the additional packaging sustainability documentation requirements of retailers such as Wal-Mart, or creating transparent documentation to validate packaging environmental responsibility to key stakeholders, there is most definitely extra work ahead. Research, documentation in multiple formats and well thought out communication plans all need to be executed. Questions remain: Will CPG’s and retailers add to existing headcount to accomplish these goals? Will responsibility be assigned to consultants, or will the burden be passed on to vendors? At this stage it appears to be a mix. • Eighty-three percent of respondents said their company was impacted by sustainability. Although 49% felt their companies did not have a comprehensive sustainability plan, it did not mean they weren’t developing one. Developing packaging with a “Cradle to Cradle” perspective is a complex challenge. Creating the infrastructure to nurture this will be an evolutionary endeavor. • Forty-nine percent of those surveyed felt they were not adequately staffed to meet the sustainability challenge. Of course, this follows the general trend of doing more with less staffing. This insight means that both CPGs and retailers will be reliant on vendors and NGO’s for sustainable packaging support. • As of February 1, 2008, the Wal-Mart packaging scorecard became an active consideration for sourcing; 6,371 vendors have entered scorecards for 97,000 SKUs. While only 39% of companies surveyed felt that they would be able to meet the Wal-Mart timeframes, it appears that many have at least made substantial progress on packaging audits and data entry. On their side, Wal-Mart has continued to attempt to simplify the process for their vendors. • Finally, the survey shows the awareness level is high and almost all companies are making some sort of sustainable packaging effort. These companies are developing infrastructures and building internal communication networks.
Results from Schawk’s 2007 Sustainability Insight Survey
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While many large CPG’s have had package engineering departments tasked with developing “sustainable packaging” (cost-saving packaging) for decades, they haven’t been challenged with the current documentation onslaught and the perspective of evaluating packaging by functionality, sustainability, and then costs. As a matter of cost control, it is quite possible that after the strategy is developed the maintenance of a sustainable packaging documentation protocol will be outsourced. Based on these findings, there is no better time than now to charge your design/pre-media firms with undertaking the call for sustainability and rising to the challenge.
For more information, please contact sustainability@schawk.com