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Sustainable packaging: Thinking out of the box by zyq13664

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									Sustainable packaging
Thinking out of the box
                                       Sustainable packaging: thinking out of the box | 2




At a glance

Issue
–	 In 2005, Walmart, the largest global customer of the Novartis
    Over-the-Counter (OTC) business, issued a challenge to all its
    suppliers asking them to help it reach a goal of creating zero
    waste, being supplied by 100 percent renewable energy and
    selling products that sustain global resources and the
    environment. Walmart created a Sustainability Scorecard to
    track supplier progress and to help its buyers make purchasing
    decisions based in part on how positively individual suppliers
    responded to Walmart’s focus on sustainability.

Objectives
–	 Novartis OTC, working with colleagues in Purchasing, Product
   Supply, Manufacturing, Marketing and Sales, sought to develop
   a number of packaging initiatives that would reduce the carbon
   footprint, thus improving the Novartis rating on the Walmart
   Sustainability Scorecard.

Activities
–	 In 2007, Novartis OTC initiated the Excedrin® out of the box
    program, removing the outer packaging cartons from all Excedrin
    100 and 250-count bottles sold at Walmarts across the United
    States. Excedrin is an over-the-counter pain reliever for a range
    of headache types.

–	 In addition, in late 2009, Novartis OTC created a breakthrough
   solution for Prevacid®24HR, a treatment for frequent heartburn
   sufferers, with displays made of recycled and recyclable
   materials to be installed in all 3,000 Walmart supercenter
   stores in the United States.
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Results
–	 By end of 2009, the Excedrin out of the box initiative produced
   savings of 50 tons of packaging materials and a 30 percent
   improvement for the Excedrin brand on Walmart’s Sustainability
   Scorecard. Because it was among the first branded analgesics
   to remove bottles from cartons, Excedrin was named one of
   Walmart’s Value Producing Items in 2007, leading to additional
   in-store marketing and promotional opportunities for the brand.

–	 For its part, the Prevacid24HR semi-permanent endcap display
   has been installed in 3,000 stores and is expected to save more
   than 80 tons of packaging materials annually. Traditional displays
   would have used three times the amount of corrugated board.
   The nature of the display and its positioning also led to increased
   merchandising and messaging opportunities for the brand.
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Sustainable packaging: thinking out of the box

Walmart is the world’s largest retailer, and largest customer of the
Novartis Over-the-Counter (OTC) business. Its stores stock OTC
products, contact lenses and other ophthalmic products, as well
as branded and generic medications from the company. So when
in 2005 Lee Scott, Walmart’s then CEO, laid out a vision of
environmental sustainability for his company, its ripple effects were
felt at Novartis and at thousands of other companies that supply
Walmart stores around the world. He declared that in the coming
years Walmart would seek to be supplied by 100 percent
renewable energy, that it would eventually create zero waste, with
a shorter-term goal of reducing packaging in the supply chain by
5 percent by 2013, and that it would sell products that sustain the
environment and global resources. Among other things, it would do
this by minimizing packaging and ensuring cost parity for “green”
products so that consumers would not be forced to decide to either
save money or save the environment.

Walmart followed up with this vision with the development of a Sustainability
Scorecard that would track supplier progress and help motivate them to
participate. Scores would be based on such items as types of packaging
materials, types of energy used to transport and manufacture products and
more. Walmart buying departments would use the scores in their purchasing
decision processes, potentially rewarding companies that produce the best
efforts to advance sustainability.

Members of the Novartis OTC team immediately began to develop plans to
respond. The results described here focus on two specific initiatives as well
as a third currently in development.
                                                Sustainable packaging: thinking out of the box | 6




Situation
Sustainable packaging efforts across Novartis

In 2008, Novartis generated more than 17,000 tons of packaging waste across
the group, including nearly 3,000 tons in its OTC business alone. At the same
time, Novartis also made a concerted effort to use recycled materials wherever
it could. In fact, today the company recycles 78 percent of all its packaging
waste and divisions and business units have started addressing the packaging
waste challenge individually.

Pharma launches a packaging platform
For example, the Novartis Pharmaceuticals division has made operational
efficiency improvements at manufacturing sites worldwide to reduce packaging
waste. The division has also launched a packaging platform that focuses on
secondary packaging and leaflets and set up a Packaging Competency Center
and Packaging Innovation Board to explore new approaches. By focusing on
waste reduction, supplier and material selection in the normal course of doing
business, Novartis Pharma is seeking to achieve both productivity and
environmental goals.

In another initiative, the division worked with the World Health Organization
(WHO) and the University of Oslo to develop the packaging of Coartem®, its
anti-malaria treatment for adults. Packaging design plays a critical role in
patient compliance, or the likelihood that a patient adheres to prescribed
dosing instructions. Ensuring compliance is a major challenge in developing
countries like Africa where less than 60% of patients are literate. Each
Coartem package includes single blister cards that contain the appropriate
amount of medication based on patient weight, and easy-to-understand
information with pictures on how to use the medication. Each time a patient
takes the medication, the images show the parasite that cause malaria being
cleared from the body, encouraging the patient to take the full treatment
course and reducing the chance of resistance.

Novartis was recently honored with the Drug Packaging Award for Coartem®
Dispersible, a sweet-tasting malaria treatment especially developed for babies
and children. This prize from the Healthcare Compliance Packaging Council
recognizes innovative packaging that enhances patient compliance.
                                                 Sustainable packaging: thinking out of the box | 7




Sandoz moves toward green packaging
Efforts toward green packaging are also taking place in Sandoz, the generic
pharmaceuticals division of Novartis. Expanded polystyrene, used to insulate
corrugated boxes for certain medications but non biodegradable, has been
replaced with a corn-based insulating material called GreenCell Foam, which
is biodegradable.

The Novartis OTC experience is the most recent example of how efforts that
tie business goals to environmental objectives can produce tangible results.

Targets
Key business and environmental objectives can go hand in hand

The Novartis OTC team focused on two key objectives in developing sustainable
packaging solutions for their presence in Walmart stores in the United States.

First, they wanted to develop solutions that would benefit the sustainability
profile of Novartis. That would be achieved by reducing material costs,
enhancing the company’s brand image, especially with environmentally-
conscious consumers, and reducing the negative impacts of excessive or
environmentally-unfriendly packaging.

Second, they wanted to enhance their business profile, largely by ensuring
they could improve their relationship with Walmart by scoring well on its
Sustainability Scorecard. This would provide important benefits for the
business, including significant merchandising and promotional opportunities
for their brands in Walmart’s 3,600 stores across the country. The OTC team
focused on developing an approach that would be good for both Walmart and
Novartis, especially for Prevacid24HR, which was to be the largest prescription-
to-OTC switch through 2013. In-store corrugate displays make a huge impact
for shoppers but come at a price to the environment as they have a brief
presence, quickly ending in the landfill.
                                                Sustainable packaging: thinking out of the box | 8




Activities
First came the Excedrin out of the box

During 2007, Novartis OTC removed outer carton packaging from all its
100 and 250-count Excedrin products sold to Walmart. It was the first
analgesic brand supplying Walmart to do so and as a result, was named
one of Walmart’s Value Producing Items. Walmart supported Excedrin with
incremental opportunities though their stores. The program saved 50 tons of
packaging materials and resulted in a 30 percent increase for Novartis in its
score on the Walmart Sustainability Scorecard.




Prevacid24HR endcap displays developed

As it prepared to launch Prevacid24HR in November 2009, Novartis worked
with several of its suppliers to create a breakthrough solution for a display
that would help accelerate product sales while also meeting sustainability
opportunities.

                          The breakthrough solution was to create an impactful
                          display that was made of recycled materials, which
                          could be utilized over a multi year timeframe.
                          Endcap placements are highly coveted because they
                          are placed facing out at the end of the aisles, hence
                          the term endcap, a position that every shopper has
                          to pass to successfully navigate the store. To date,
                          this endcap has been placed in 3,000 stores across
                          the United States. The semi-permanent unit will be
                          replenished via standard cases that are much smaller
                          and lighter than traditional displays and use far less
                          in the way of corrugated boxes for shipping.
                                                 Sustainable packaging: thinking out of the box | 9




Results
Benefits for the OTC brands mount

For Prevacid24HR, the team developed a solution that replaced corrugated
displays and delivered a better shopping experience for consumers – while also
responding to environmental concerns.

Other benefits have included:
–	 Improving relationships with environmentally-focused stakeholders and
   consumers over the medium-to-longer term while providing more space
   to deliver product messages to the consumer.
–	 Reducing packaging materials and improving the sustainability of OTC
   products. More than 50 tons of packaging materials were eliminated by
   the Excedrin action and about 80 tons as a result of the Prevacid24HR
   initiative.
–	 Developing solutions that could potentially be replicated to other products.
–	 Enhancing business relationships with Walmart.

Lessons learned
Leading the way has made a difference

These various packaging initiatives are likely to be the wave of the future –
not only at Walmart but elsewhere.

In addition, they demonstrate that sustainability is a team effort. The idea of
creating 100 percent recycled and recyclable plastic materials came from the
collaboration between various Novartis departments and its suppliers.

Perhaps most importantly, these initiatives at Walmart may be seen as having
created the impetus to spur Novartis to develop a global sustainable packaging
policy across its four divisions.

Contacts:

–	 Markus Lehni, Environment and Energy Manager, Novartis
   markus.lehni@novartis.com
–	 Matthew Havron, Associate Director of Logistics,
   Walmart Business Team, Novartis
   matthew.havron@novartis.com

								
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