Challenge Questions 3.1: How effective and functional is my packaging in reducing food waste[1] in relation to financial and environmental considerations?
Answers Options:
Because the discrete ways in which packaging minimizes food waste differ according to the produce packed within, the option that you choose out of those listed below should relate to a specific type of produce, not your overall operations.
Packaging plays a critically important role in minimizing food waste along the supply chain and in the home. Wherever it occurs, food waste represents an unnecessary financial cost to your company, your suppliers, your customers, and to the consumers of your products. It also represents an environmental cost that undermines businesses’ efforts to meet their own and their customers’ sustainability goals and respond to consumers’ growing environmental concerns.
The mechanics that lead to packaging playing an important role in reducing food waste at any point along the supply chain can be categorized into three groups²:
Optimized packaging solutions encompass all the above mechanics in some form. Defining how each of these three broad considerations relate to the specific products that you handle is key to ensuring that your company optimizes its packaging solutions from food waste reduction and operational efficiency perspectives.
As illustrated below, a good way to examine your packaging solutions’ fitness for use and its effectiveness in reducing food waste is to clarify which mechanics relate to 1) minimizing food waste and optimizing yours, your suppliers’ and your customers’ operations prior to a product’s purchase by consumers; and 2) following your product’s purchase by consumers.
Typically, prior to consumers’ purchasing your product, product protection and shelf-life extension mechanics play the greatest role in reducing food waste. Following your products’ purchase by consumers, behavioural change mechanics typically play the greater role in reducing food waste.
Three forms of packaging exist: primary, secondary and tertiary. Primary packaging is that which consumers take home. Secondary and tertiary packaging predominantly play a logistical role in enabling produce to be effectively and efficiency distributed from the place of production/processing to the point of purchase by consumers. Examples of secondary packaging include cardboard cartons and returnable plastic containers (RPCs). Tertiary packaging include skids, corner boards and shrink wrap.
As the design of secondary and tertiary packaging are crucial to protecting your product from the point of harvest through to its purchase by consumers, ensure that your examination of packaging mechanics extends beyond primary packaging. Strengthening the structural integrity of secondary and tertiary packaging to better protect produce may cause a marginal increase in the total volume of packaging, though significantly reduce food waste along the value chain — including in the home.
Packaging decisions involve trade-offs. Summarized below are two key considerations that encompass all food waste-related packaging decisions: financial and environmental. This is followed by a list of packaging characteristics to assist you in considering food waste as part of your packaging decisions.
Because they are “hidden” in operating budgets and balance sheets, companies underestimate the financial implications of not optimizing packaging solutions from a food waste perspective. The costs associated with proactively managing the implications of food waste — such as avoidable energy and transportation, labour, handling and disposal costs, reconciling accounts, etc. — are typically worth at least three times more than an item’s face value.¹⁰ Packaging typically represents a small percentage of an item’s total cost of production and face value.
A proven ballpark guide for improving financial performance is that a one percent reduction in food waste typically equates to the equivalent of a four plus percent increase in revenue.⁶
Seemingly simple changes (such as packing apples in flow wrap instead of bags) reduced retail losses by eleven percent, resulting in increased margins for the retailer and less credits being claimed against the vendor.¹ The financial impact of utilizing modified atmosphere mechanics to extend products’ shelf life by up to ten or more times that achievable by less effective packaging could also have significant financial implications for your company, and overall supply chain.
Selling into markets where extended producer responsibility (EPR) has come, or is coming into, force also plays into the financial trade-offs associated with packaging decisions. Shipping produce that subsequently goes to waste would increase ERP fees unnecessarily, particularly if included with packaging materials that attract higher fees.
Basing packaging decisions on a bigger perspective than minimal per unit pricing is therefore critical to ensuring optimized choices.
A lesser known factor related to the financial benefits of optimizing food waste-related packaging decisions is how addressing the causes of food waste leads to improved quality (including appearance and taste). Positively impacting consumers’ purchasing decisions offers opportunities to increase revenue by driving sales and increasing their willingness to pay above commodity prices.
It is unusual for packaging to represent more than five percent of a product’s total environmental footprint.² For items such as cucumbers, packaging can represent less than one percent of products’ total environmental footprint. A minor increase in food waste can therefore outweigh any environmental benefits gained by choosing packaging materials based on its environmental footprint alone.
This does not mean that basing packaging decisions on environmental factors is unimportant. On the contrary, it emphasizes the need to view the environmental trade-offs associated with packaging holistically. It also emphasizes the need to communicate to customers and consumers how and why packaging decisions relate to a company’s environmental commitments.
What might appear on the surface to be an easy communicated win, such as transitioning from plastic to cardboard packaging, could actually hamper a company’s ability to meet its environmental commitments. Typically, while cardboard can be easier to recycle than many plastics, it does not offer the same food waste prevention mechanics.
A potentially more difficult message to communicate to customers and consumers is how a company will utilize readily recyclable plastics and commit to working with stakeholders to maximize the volume of packaging that is recycled as an effective means to reduce food waste and the supply chain’s overall environmental footprint.
Listed below are considerations to help optimize a company’s packaging solutions. All of the considerations reflect discrete considerations associated with packaging’s ability to reduce food waste. Anywhere a packaging solution’s design favours one factor over others could result in unintended consequences, resulting in increased food waste and suboptimal financial and environmental outcomes. A one-day reduction in shelf-life may seem relatively minor, though it can lead to a meaningful increase in food waste.
Examples:
An overly high focus on lightweighting can negatively impact packaging’s mechanical integrity, potentially leading to an increase in food safety incidents and products’ unintended abuse by consumers when shopping. This could result in increased damage and loss. Excessive lightweighting can also negatively impact both distribution efficiencies and ease of recyclability. An overly high focus on ease of post use-management, such as ease of recyclability, can lead to material choices and design decisions that offer limited atmospheric control capabilities.
The packaging characteristics to assess and consider when determining the potential impacts of packaging alternatives on food waste include⁷:
Additional Resources
[1] For the purposes of this summary guide, the term “food waste” encompasses losses that occur along the supply chain (often referred to as “shrink”) and food that is purchased from retail or foodservice though not consumed.