Sustainable packaging has undoubtedly accrued greater materiality in the last
few years — as evidenced by review of the latest Consumer Packaged Goods (CPG)
materiality assessments.
McKinsey
even reports that half of US consumers are highly concerned of the environmental
impact of packaging.
Food CPGs such as PepsiCo and
Unilever have invertedly
responded by announcing formal sustainable packaging goals. The Consumer Brands
Association
reports that most of these goals include reaching 100 percent recyclable or
compostable packaging by 2025.
There are two ironies here that must be addressed.
US recycling and composting rates are low
According to the
EPA’s
most recent calculations (2018), only 32.1 percent of Municipal Solid Waste was
recycled or composted in the United States. In fact, 0.01 percent of US cities
currently offer curbside
composting
with fragmented pockets of backyard practice.
End-of-life impact is relatively small
Greenhouse gas (GHG) CO2e emissions from the production of packaging materials
and end-of-life disposal are relatively
small when
considering the entire food product’s lifecycle. Most consumers would be
surprised to learn that the majority of GHG impact for a typical food product is
actually derived
from land use
change
and on-farm processes.
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This can be deduced from numerous food CPG GHG inventories and life cycle
assessments. It is also demonstrated in
Hershey’s latest sustainability
report, below.
Source: The Hershey Company. 2020 Sustainability Report (p. 46).
This poses a nuanced conundrum for food CPGs
Does the CPG invest capital toward sustainable packaging, which tackles a
relatively small portion of GHG impact yet wins the heart of the consumer? Or
does the company allocate that same capital to reduce upstream scope 3 emissions
with regenerative sourcing and ingredient decisions, shrinking presumably the
most significant source GHG emissions?
These questions can naturally cause tension amongst sustainability, marketing
and R&D teams. There is no doubt that choosing to prioritize consumer
materiality is effective for the short term. However, there is a key opportunity
that’s often overlooked when considering for the long term.
The First Educator Advantage
The First Educator Advantage (FEA) is when a CPG takes the initiative to
be the first to educate consumers on an impact topic that does not yet hold
mainstream materiality. One noteworthy successor of this strategy is Beyond
Meat.
In 2018, Beyond Meat published a peer-reviewed life cycle assessment that
compared the environmental impacts of plant-based protein and animal-based
protein. The company strategically communicated the results to consumers across
its marketing channels in a simple and effective manner. Many of these consumers
were hearing about the following environmental impact topics for the first time
as they related to their dietary choices.
Source: Instagram (@BeyondMeat) post on February 10 ,2021
A 2020 Gallup
poll
found that close to one in four US consumers has reportedly made a conscious
effort to cut down on
meat.
The environment was among top reasons for this behavior change. Furthermore,
plant-based meat sales grew by 45
percent
compared to 2019. It can be inferred that this behavior and lift in sales was a
direct cause of first-educator efforts and skyrocketing popularity of
plant-based meat brands such as Beyond Meat and its rival, Impossible
Burger.
Successful FEA execution raises the consumer’s level of consciousness. This
naturally results in the subconscious questioning of competitive offerings
that are not communicating on the same impact topic.
A high-level summary of how to execute the FEA strategy within any CPG
Step 1
Sustainability teams should work closely with R&D to assess the farm-to-gate
greenhouse gas impact (perhaps in the form of an emissions factor) for their
current ingredients. These emission factors should be multiplied with purchase
volume to identify key opportunities for ingredient and sourcing locations swaps
that are less carbon intensive.
Step 2
Next, these teams should search and select less carbon-intensive ingredients and
sourcing locations with procurement. These can be found using an ingredient
sustainability database such as HowGood. Once these
swaps are aligned upon, teams should perform a cost-benefit analysis that
includes consumer sentiment with the newfound environmental benefits.
Step 3
As these swaps are integrated into the supply chain, marketing teams should also
be briefed on their environmental benefits. Marketing can then begin to plan an
effective communication strategy surrounding the changes to consumers
at large. Perhaps they focus on one unique ingredient or sourcing change for
each innovated SKU. It’s recommended that these teams perform qualitative
surveys amongst average consumers to gain a baseline of what’s currently
understood on this impact topic. They can then marry surfaced insights against
environmental purchase-intent behaviors to develop a unique value proposition.
A win for all
When executed properly, this strategy enables success for multiple teams.
Sustainability teams can hit their scope 3 GHG emissions-reduction targets faster.
Products designed by R&D teams are uniquely positioned amongst competitors.
Marketing teams experience a boost in consumer acquisition, consumer retention
and perhaps incremental shopper opportunities with impact-driven retailers.
The FEA should be leveraged by any CPG willing to take innovative strides to
ensure strong long-term performance.
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Director of Growth & Innovation
HowGood
Published Aug 31, 2021 2pm EDT / 11am PDT / 7pm BST / 8pm CEST