According to a new OECD Report, the world is now producing twice as much plastic waste as it did two decades ago, amongst which only 9% of it is being successfully recycled.
The 2030 Agenda for Sustainable Development adopted by the UN aims to protect the planet, end poverty, and improve life prospects; but so far, the progress has been lackadaisical.
Sustainable Packaging is the need of the hour – with just under a decade left to achieve the sustainability goals, it being the decade of action.
India’s COP26 commitments and the link to sustainable packaging
The Glasgow Climate Pact has clearly demarcated two important considerations. Net-zero emissions is the obvious first. However, the path to get there will be customized to ground realities. India finds itself at a critical reboot stage with regards to the transition map for governments, large enterprises, and MSMEs to hit the ground running with digital transformation.
The Cost of Climate Change Report spells out the dire implications of climate change. It is estimated that 3-10% of our GDP will be compromised by 2100 while increasing average poverty rates by 3%. If we are to achieve a target of becoming a $5 trillion economy by 2030, we will have to achieve a real GDP growth rate of 12.5% and create 90 million jobs in the non-farm sectors.
The Plastic Waste Management Amendment Rules, 2021, announced in August by the Union Ministry of Environment, Forest, and Climate Change (MoEFCC), identified that 20 identified Single Use Plastic Products (SUPs) will be phased out by next year. These are classified as lowest utility and highest environmental impact. In India, 18 states have already implemented a complete SUP ban, but the upcoming July milestone will extend the legislation across the country. The shift to more sustainable packaging material will need to be swift, and manufacturers will need to display vision and plan not to be impacted by supply chain disruptions in the transition process.
The search for alternatives begins
The COVID19 pandemic changed the way we make purchase decisions and has accelerated a shift to digital buying for a swathe of middle-class India. The Indian Institute of Packaging (IIP) estimates that the packaging consumption in India has increased by more than 200% – from 4.3 kg per person per annum to 8.6 kg pppa.
Additionally, the government’s push for the compulsory use of plastics of a minimum of 75-micron thickness from December 2021 and a minimum of 120-micron plastics from July 2022 will generate demand for sustainable packaging and drive investments in these new product categories. The packaging product categories likely to increase demand are seaweed, organic fabrics, corn starch, wood, paperboard, recycled cardboard, and paper.
It is time for the Indian packaging ecosystem to move away from a siloed approach and accelerate technology adoption to enable the digital transformation of the packaging supply chain. On the other hand, collaborative data sharing among the stakeholders in the supply chain can get greater visibility into demand and supply mapping across locations in India, pricing, and agile distribution.
When it comes to the alternatives available, Paper is a more sustainable option than plastic. Industry figures indicate that packaging consumes more than 49% of all paper produced in India. Given the global demand for craft paper in markets like China and the US leading procurement demand, India and other emerging economies are feeling the pricing pinch.
Eco-friendly innovations that will dominate 2022
The demand for single substrate packaging alternatives is set to soar. The cost and environmental benefits would be tremendous if we could bring that down to a single layer of substrate packaging. Consider an example of an FMCG manufacturer that currently uses three layered packaging materials: BOPT, LDPE, and a metal pack.
Here are some examples of alternative materials that could play a significant role in the packaging industry in the next few years:
- Repeat-use packaging – Reverse logistics allows companies to extract value from parts and materials that have already been used, and sent back for restoration and/or reuse. In that sense, expendable packaging that is sustainable and can be used limitlessly will result in a significant reduction of packaging costs and environmental waste.
- Bio-based Plastics – Bio-based plastics typically use food crops such as corn and sugarcane, both in surplus in India.
- Polylactic acid (PLA) – Transparent solid polymer that is similar to PETE polymer but has a significantly lower maximum continuous use temperature
- Poly hydroxyalkanoate (PHA) – is a much more eco-friendly polymer that can handle high temperatures and decompose in soil and waterways. Both alternatives are made from fermented corn sugar, and they can decompose up to 90% within 90 days if disposed of properly.
- Paper-based packaging – Corrugated box and other forms of paper-based packaging are biodegradable if it does end up in a landfill, it can be easily recycled by end-users, and the raw material is carefully managed (planting more trees)
- Edible packaging – Edible or Dissolvable Packaging is made by Natural polymers in food packaging by extracting raw material from Algae, seaweeds, polysaccharides, proteins, lipids, or composites. Estimated to be growing at a CAGR rate of 6.81% from 2017 to 2023, Edible Packaging is soon becoming a regular occurrence in everyday life.
Bridging the digital divide & staying close to the market   Â
Plastics account for a third of carbon emissions in core manufacturing verticals like metals, mining, and construction materials. Next in the pecking order of importance are energy, agriculture and allied activities, logistics, and HVAC, which represent the highest contributors. FMCG, consumer appliances, e-commerce, hospitality, and F&B also add their fair share of environmental footprint.Â
The answer to standardization of data sharing on carbon emissions compared to alternatives across a cross-section of manufacturers, MSME suppliers, logistics and warehouse partners is undoubtedly a digital platform that can account for industry and process variations. Consumers truly shape how brands approach the market, thereby enabling a push for sustainability targets and real action.
Unfortunately, digital integration in India’s supply chain is at less than 5%, obscuring visibility into carbon emissions at each stage of the supply chain. Due to the lack of this visibility, brands and manufacturers find it challenging to identify partners for on-demand sustainable transition who have the manufacturing capacity to scale with them.
Simply put, the easiest path to sustainability is through measurement. By analyzing data on carbon emissions and viable alternatives, all stakeholders can make responsible choices to bring transformative change quickly, at optimum costs and without friction in the current value chain.
How can brands play a more prominent role?
Product packaging plays a prominent role in the purchase decision of the consumer. Primary packaging makes a difference to the customer’s first impression and the brand recall later. Take the case of the food and beverage industry – chocolates, soft drinks, processed foods, packaged whole grains, and cereals, for instance, are packaged using laminates. The pandemic has changed consumer perception around packaging as well.
Brands need to put technology at the centre of their transformation, create robust governance models to govern operations and collaborate with a broader ecosystem to make a significant impact footprint. The surge in deliveries, wastage of packaging, and a growing consciousness of the digital consumer will force brands to consider sustainable packaging options carefully. Most studies indicate that consumers also evaluate brand packaging on their green footprint and low-touch point processes (the lesser, the better).Â
Why should brands strongly consider transforming their packaging usage?
- Be the ‘right’ brand – Consumers prefer brands with more sustainable packaging than their competitors.
- Talent retention – By doing the ‘right thing,’ brands build the perception of being a responsible producer, which affects employees’ morale and loyalty.
- Reduction of carbon footprint and costs – extends to the financial and social responsibility aspect advantages, which are measurable.
- Investment opportunities – the world is veering towards investing responsibly, and larger AUMs focus on brands adhering to ESG norms.
While this builds a strong brand image, the path to packaging material and supply chain transformation is complicated and needs an end-to-end advisor who can envision upstream and downstream requirements, mitigate risks, and provide solutions platforms that enable seamless migration.
What will drive sustainability in packaging?
Like us, all stakeholders in the packaging supply chain ecosystem are acutely aware of the implications of a collective failure to adopt more sustainable best practices.Â
Industry leaders should aspire to create a brand of impact by revamping and reimagining product packaging and supply chain processes with technology at the core. A seamless transition, however, requires much planning. The brand perception and economic and environmental costs are too significant for companies to take lightly.
The pandemic, coupled with the COP26 commitments for a greener future and government legislation to eliminate single-use plastic, should be viewed as an excellent opportunity to hit the reset button. By placing digital technology solutions, material innovation and process optimization at the core for a better tomorrow, the government, businesses, and the supplier ecosystem can usher in a new age of conscious commerce. That is why it is time to say that good thing come in sustainable packaging.