Packing Materials and Supply Chain Sustainability

Renewable packing materials—which are also compostable in many cases—have greater potential to drive sustainability by helping to reduce harmful waste.

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As companies continue to set and pursue ambitious sustainability goals, many have opportunities to think more deeply about how their packaging practices help or hurt the environment. This article draws from APQC’s Open Standards Benchmarking research in Logistics to focus specifically on cross-industry practices related to packing materials. While recycled and reused packing materials are increasingly common, many organizations still have an opportunity to partner with consumers to drive greater sustainability and to leverage packing materials that come from renewable sources.

Recycled and Reused Packing Material

APQC finds that many organizations are getting most—and in some cases, nearly all—of their packing material from recycled or re-used materials. Figure 1 shows that at the median (i.e., the midpoint or 50th percentile), respondents report that 80 percent of the total annual packing material their organizations are consuming is from recycled or reused materials. That drops slightly to 75 percent at the bottom (or 25th percentile) and increases to 90 percent at the top (or 75th percentile). See Figure 1.

Fig1APQC Fig. 1

Recyclable Materials are Not Always Recycled 

The high percentage of recycled or reusable packing materials is undeniably good news. However, the results are likely driven more by the growth of reusable packing materials than by materials being recycled.

Reusable packing materials refer to products like trays, pallets, tanks, reusable plastic containers, and intermediate bulk containers that are designed for a continuous cycle of use, recovery, and reuse. While these items cannot always be recycled (for example, in the case of a wood pallet), they are often reused repeatedly in business-to-business contexts and repaired as needed.

Recyclable or recycled packing materials like cardboard boxes are—at least in principle—better for the environment than many single-use containers or forms of packaging. However, even if a company uses these materials, there is no guarantee that consumers will recycle them. They could still easily end up in a landfill, whether because consumers don’t take the extra step to recycle or don’t have access to recycling in their area. This is especially true in the case of plastic packing materials, which researchers have found accounts for nearly half of plastic waste globally.

Reusable packing materials are already becoming more common in business-to-consumer environments in line with the growth of e-commerce. Companies that want to lead the way in sustainability should continue finding opportunities to use and reuse these forms of packaging with consumers through incentives like deposits, discounts, or rewards.

Packing Materials from Renewable Sources

While organizations are using a high percentage of recycled or reused packing materials, we don’t see as much progress in terms of using renewable packing materials. Renewable packing materials are made from natural resources that can be sustainably grown and continuously replenished. For example, packing materials made from mushrooms and organic plant waste provide a sturdy alternative to materials like Styrofoam and unlike the latter, they are entirely compostable.

If they are sustainably grown and certified in the country in which the packaging is sold, renewable materials can potentially offer lower environmental impacts than non-renewable alternatives. However, APQC finds that the use of renewables lags well behind that of reused or recycled materials. Whether because they are newer, are more expensive, are less accessible, cannot yet scale to meet demand, or some combination of all of these, APQC finds that at the median, only 60 percent of packing materials come from renewable sources (Figure 2).

 Fig2APQC Fig. 2

With fewer companies using renewable packing materials, those that do are in a good position to turn their packaging into an attractive value proposition for consumers who care about the environment. Even more importantly, far fewer of these materials will fill up landfills or go on to pollute waterways, since they are made of materials that decompose over a relatively brief period of time (around 45 days for mushroom packaging versus at least 500 years for Styrofoam).

Key Takeaways

Recycled or reused materials account for a large majority of the packing materials that organizations use today. While these materials are undeniably better for the environment than single-use or virgin materials, there is no guarantee that consumers can or will recycle packing materials once they have them. Renewable packing materials—which are also compostable in many cases—have greater potential to drive sustainability by helping to reduce harmful waste. With fewer companies using them for now, those that do send an important message about their values while preventing harmful waste in the supply chain.