Sustainable Packaging: The Beauty Industry’s Perfect Storm?
Eco-conscious consumers are demanding greener packaging to help save the planet, and corporate boards are requiring increased sustainability measures to boost the bottom line. Add in new global standards and growing retail requirements, and there may be a perfect storm gathering in the beauty world. Read on for the latest forecast.
By Jamie Matusow, Editor
According to Merriam-Webster Dictionary, a “perfect storm” is an expression that describes an event in which a rare combination of circumstances will aggravate a situation drastically. This phenomena now parallels in the beauty industry, where a number of factors are gathering momentum, resulting in a whirlwind of activity unlike any witnessed before. While previous decades have shown a rise in environmental awareness and consumer interest in natural products and reduced packaging, the intensity of the movement subsequently subsided. Today, sustainability, in the beauty industry and elsewhere, is no longer considered a fad—it’s accepted as a trend, and predicted to become a global way of life.
In addition to consumers’ growing earth-friendly attitudes, corporate boards have caught wind of the effects of sustainable practices on profitability, and have propelled efforts into high gear. Add to this the increasingly powerful role of retail giant Walmart, as well as legislation from countries such as China and Germany—and sustainable packaging protocols for the beauty industry are pushing brands and suppliers to new levels of creativity and compliance.
The More Things Change
While a move toward sustainable packaging has been brewing for quite some time, conditions are now prime for gale-force change.
More than a decade ago, a 1999 story on sustainability in Beauty Packaging magazine addressed the fact that over the previous 10 years, brands had begun responding to consumers’ awakening to the importance of protecting the environment. The article quoted Larry Plesent, president and CEO of Vermont Soapworks, on the importance of education in meeting environmental goals. “The future consumers, kids graduating high school now, were raised on a different set of‘the three R’s’: reduce, reuse, recycle,” he said, warning that marketers must either adapt or die. “You must have the best product in the world,” he said, “but if you overpackage, educated consumers will know.”
Fast forward eleven years, and Darrin Duber-Smith, president of Green Marketing, Inc., and visiting assistant professor of marketing at Denver’s Metro State College, says, “Nothing’s really changed in the last 20 years.” He explains that sustainability is now receiving more publicity, in part, because “it depends on what the media wants to focus on.”
However, Duber-Smith concedes that action is progressing on a number of fronts, and says, “I think everyone’s looking at packaging right now.”
Multiple Fronts Colliding
Duber-Smith explains that there are eight forces that drive the sustainability movement. Although these motivators have always been there, they’re now picking up speed all at once, setting the stage for “a perfect storm” (see sidebar “8 Key Drivers of Sustainability”). He says, “There’s no one reason why it’s growing—sustainability is more about efficiency than anything else. It just makes sense.” He adds that it just “keeps rolling along,” and that “we may or may not see a large cultural shift.”
8 Key Drivers of Sustainability
Darrin Duber-Smith, president of Green Marketing, Inc., and visiting assistant professor of marketing at Denver’s Metro State College, says there are eight components of sustainability that are now gaining momentum all at once, setting the stage for “a perfect storm.” He says, “We may or may not see a large cultural shift.”
1. Target market: Consumers are looking at packaging more closely. Dematerialization is becoming more important, and waste is bad. (Packaging is the most obvious form of waste in people’s eyes, says Duber-Smith.)
2. Competition: If your competitor is doing it, you’d better too.
3. Supply chain: Retailers like Walmart are setting new criteria.
4. NGOs: Non-government organizations let
people become activists.
5. Government: More and more laws regarding sustainability are being instituted every day.
6. Media: What they choose to focus on becomes central.
7. Saving money: As a money-saving strategy, it didn’t suffer that much in the down economy.
8. Activist shareholders: Board members are demanding corporate change.
The beauty industry has found itself in the public eye of the sustainability storm, and Duber-Smith advises: “Beauty companies have to take it [sustainability] up or public relations groups will hammer [them].” What’s more, he says, “Now they have to get in with a multi-pronged approach—water, energy, supply chain—the Green Buffet (his term for selecting various “green” items to incorporate), is gone; no longer can you pick and choose.”
Duber-Smith says, “Sustainability is a business model first and a sustainability issue second,” and he issues an alert: “To be global these days, you have to follow it.Companies need to see the whole picture. Failure for a company to recognize this means death.”
Sandra Krasovec, associate professor/packaging design at Fashion Institute of Technology (FIT) and who serves on the Ad Hoc Faculty Senate Committee on Sustainability and President’s Council on Sustainability, agrees that sustainability in packaging is a multi-pronged approach: “For most CPGs [consumer product goods], the social responsibility of developing smarter, more sustainable products and packaging is worked into overall business strategy in order to remain competitive. In the end it affects the bottom line and it’s the right thing to do.” In addition, she notes: “CPGs have to work with their suppliers in order to comply with scorecard criteria and remain on the shelves of Walmart stores.”
LUSH Cosmetics uses 100% recycled PET bottles from Alpha Packaging for all of its liquid beauty products. LUSH was one of the first beauty companies to use recycled PET at 100%.
Krasovec notes, “If it isn’t already, sustainability will be built into business philosophy and strategy, but it still comes down to economics.” She says beauty industry leaders such as Estée Lauder that have already put efforts into researching better materials and production processes will ultimately help smaller companies with a trickle-down effect.
Big and Small Beauty Companies
Whereas niche brands such as Soapworks, Pangea, LUSH and Weleda (see sidebar) remain prime examples of eco-friendly products and packaging and corporate commitment to the cause, today, beauty giant Estée Lauder is often cited for leading the pack in sustainable practices, such as the use of wind power and recycling programs, like the one at Origins where customers return their used packaging at counter for the brand to effectively recycle. John Delfausse, vice president global package development and chief environmental officer for Estée Lauder Corporate Packaging, was a founding member of the Sustainable Packaging Coalition. (Please see Delfausse’s article on sustainability in this issue. Delfausse and Krasovec will both be speaking on Beauty Packaging’s panel on sustainable packaging at Luxe Pack New York on May 19.)
Weleda: Sustainable Beauty Since 1921
Who would have guessed 20 years ago, that the increased interest in organic personal care products and sustainable packaging would have taken Weleda on a path from specialty health food stores to the mainstream aisles of Target and other mass retailers?
Certainly not a fad-oriented company, Weleda has followed its convictions on ingredients and packaging since its founding almost a century ago. The Swiss-based natural products manufacturer pioneered the use of organic ingredients in skin care, and holds true to following practices it deems best for the natural health and well-being of the Earth. The firm utilizes three types of materials: Glass, food grade PET and PE/PP (plastic) and aluminum tubes with a protective coating. All of its packaging is recyclable.
Recently, global leader L’ Oréal announced its membership in The Sustainability Consortium (TSC). Pam Alabaster, the company’s senior vice president corporate communications and external affairs, says, “L’Oréal believes that consumer purchasing decisions are becoming increasingly influenced by the sustainability choices made by the companies that produce these products, and also believes that there is a need for a standardized approach to measure and report on the sustainability of consumer products, which the TSC can provide.
“L’Oréal takes a holistic approach to sustainability” adds Alabaster, “and our practices, initiatives and policies are developed with the goal of operating a business which provides for the triple bottom line; economic growth, environmental respect and social responsibility. Our approach to the selection of packaging materials is framed by three key principles: Respect, Reduce and Replace. Packaging is designed to provide the best formula/packaging combination, utilize the minimum amount of materials required and ensure optimum disposal conditions.”
Now in the 21st century, it’s clear that the initial, consumer-driven green movement of decades past is not receding. According to Duber-Smith, 50-75% (or the vast majority) of the population wants products that are natural/organic/green. “Consumers perceive green products as being good for them and good for the environment.”
Even in the current economy, many consumers remain on a “green watch.” The most recent research on green living, from market research company Mintel, found that more than one-third (35%) of survey respondents said they would pay more for “environmentally friendly” products. What’s more, Chris Haack, Mintel senior analyst, notes: “Food and beverage and personal care are the two most mature categories, and account for the majority of green products in the marketplace.”
According to the report, sales of green personal care products increased by 18% from 2006-08 and similar to food and beverage, saw only a slight incline in 2009 (1.2%). The research group says this segment is poised to resume rapid growth once consumer spending begins to recover from the current downturn. One-third of all consumers have never tried organic or natural personal care products, suggesting that there is plenty of room for growth in this market, says Haack. He adds, “We expect to see a growing trend toward upscale green personal care products targeted to spas, salons and other high-end retail outlets in the coming years.”
The Right Packaging
But providing an eco-friendly product may no longer be enough to capture consumers’ interest. Cosmetics groups are rallying for new regulations regarding claims such as natural and organic, and as Duber-Smith points out, consumers are looking at all elements of a product, looking beyond the ingredients to the packaging.
Brands savvy to these trends, as well as those aware of cost-saving and regulatory factors, have embraced a move to sustainable packaging—and suppliers continue to respond, ready to meet initiatives across the board.
Sustainable Packaging Sector Charts Growth
In a report released earlier this year, market intelligence firm Pike Research forecasts that the sustainable packaging sector is growing much faster than the overall packaging industry, and anticipates that eco-friendly packaging will nearly double in revenues between 2009 and 2014, from $88 billion to $170 billion. Pike’s managing director Clint Wheelock, says,“The move toward more environmentally responsible packaging is being embraced by consumers, manufacturers, retailers, advocacy groups, and world governments alike.”
Pike predicts that plastic-based packaging will be the fastest-growing segment of the sustainable packaging sector between now and 2014. “More eco-friendly plastic packaging will have a huge impact,” says Wheelock, “because it represents more than a third of the total global packaging industry, second only to paper packaging.”
Plastic Reduction by Design
Plastics are a major focus of L’Oréal’s approach to incorporating sustainable practices, by reducing packaging materials and substituting eco-friendly alternatives.
The Chopra Center’s Adara Body Lotion was packaged in a 15ml Xela Pack, constructed using 100% post consumer recycled paper for the paper portion of the packet (75% paper, of which 100% was PCRP).
For example, says Alabaster, Kiehl’s Since 1851 Aloe Vera Biodegradable Liquid Body Cleaner is made of 100% recycled plastic, preserving natural resources and reducing CO2 emissions. The packaging uses 100% PET PCR resin. Kiehl’s Aloe Vera Biolage Delicate Care Oil 50ml is also manufactured with 100% PET PCR resin while Pureology 300ml shampoos are made with 25% HDPE PCR, and there’s a plan to use 50% HDPE PCR by the end of 2010.
In addition to the more widespread use of PRC materials for primary packaging, in 1990, the L’Oréal Group launched a global weight reduction program for its bottles. In 2008, the initiative saw the quantity of plastic used in its bottles reduced by 800 tons. Garnier has pledged to reduce the weight of its plastic packaging by 15% by 2012 while the Professional Products Division aims to reduce the amount of HDPE used in its 1 liter bottles across 80 SKUs from 60 grams to 52 grams, shrinking the amount of plastic used by 120 tons. In addition, the company has taken initiatives to reduce materials used in labels, cartons, shippers and all forms of packaging.
Light weighting and reducing plastics now starts with the design stage.
With sustainability such a key issue, FIT’s Krasovec says packaging designers have a stronger voice in the decision-making process and are moving to suppliers that offer more options for responsible choices. “We are looking to be better informed with the right information about packaging materials and production processes,” she says. “Our relationship with manufacturers and suppliers must be strengthened so we can work in partnership in developing the best possible solution for a more sustainable package while still protecting the product and meeting consumers’ needs. Designers and manufacturers are in agreement that there is a need to understand and use the ‘languages’ of our different disciplines and expertise across marketing, packaging design, and manufacturing stakeholders. Semantics are still an issue,” she adds.
With all that’s changing in the packaging industry, Krasovec reports that the Packaging Design Department at FIT is currently waiting for approval to move forward with a credit certificate program in sustainable packaging design.
Davide Nicosia, of design firm NiCE Ltd., and a pioneer in the use of eco-friendly printing techniques, packaging materials and manufacturing processes, makes sustainability the starting point of every project. “On one project,” he says, “we figured out a way to reduce the amount of plastic in a shampoo bottle by 13%.” Nicosia explains, “This provided huge savings to the client, but even more importantly, it caused a dramatic reduction in waste. Something like 500 metric tons per year, just from redesigning the bottle for one shampoo brand.”
While plastics are frequently used in samplers designed to let consumers trial a product, Xela Pack set out to replace the plastic mini packs with an eco-friendly alternative.
Anthony A. Gentile, director of art and marketing, Xela Pack, says, “With more and more people growing aware of the ‘plastic ocean’ problem in the Pacific Ocean, it seems as though companies are finally paying more attention to finding alternatives to plastic. Product companies and packaging companies are utilizing more and more new materials that help to reduce the production of new plastic.”
Gentile says Xela Pack’s sample packaging uses about 92% less plastic than same-sized plastic bottles or tubes, and offers a huge reduction in the amount of plastic used for its samples. “Furthermore,” he says, “the paper portion of the Xela Pack, which amounts to about 75% of the packet, can be constructed using 100% post consumer recycled paper.”
Plastic tubes are another packaging segment where great sustainability strides have taken place both in light weighting and using alternative materials.
At Alcan Packaging Beauty, Nicholas Thorne, director, innovation and development, says, “All of our market segments are affected [by sustainability], and increasingly so. That said, the commodity type products are where it has been easier to develop and easier to market the improvements...” Alcan has reduced the environmental impact of a standard tube by up to 30% over the last few years, says Thorne, by down gauging, designing lightweight caps (Slender), and more recently introducing a tube specification with 60% post consumer resins (PCR) in the tube body.
“In the absence of suitable biopolymers,” says Thorne, “pragmatic, readily available solutions are beginning to gather speed, such as reducing packaging weight, incorporating recycled materials, etc. It is even more and more common to see designers comparing and evaluating traditional fossil-based polymers not only based on their mechanical or aesthetic properties, but also their environmental impact.”
Steven A. Gallo, vice president of sales and marketing for Global Packaging, says while they specialize in luxury acrylic and PETG jars and pump bottles for the upscale cosmetic market, they also market sustainable tubes.
He says, “Plastic tubes for the cosmetic and HBA markets is an area where the tube industry has made strides towards offering a reduced footprint on the environment by the use of PCR, derived from recycled milk bottles.”PCR tubes, explains Gallo, are made from a unique combination of virgin and recycled plastic materials. “However,” he says,“the recycled raw material we use is very uniform allowing predictable resin properties, thus maintaining a uniform PCR product and never sacrificing structure or printability quality.”
By using a three-layer extrusion process, Gallo says they can isolate the up to 100% PCR middle layer from the inner and outer layers of the tube sleeve, where it may be required for stability purposes to use virgin material in contact with the product.
Alpha Packaging has also seen growing interest in PCR, but Marny Bielefeldt, marketing manager, says more people are now also asking about biodegradable plastics than ever before. “They are specifically asking about biodegradable additives that would make regular plastics—high density polyethylene (HDPE) and polyethylene terephthalate (PET)—biodegrade in landfills,” says Bielefeldt. Alpha is just beginning to explore these types of additives, but is not currently supplying these types of bottles to customers.
She says that interest in sustainable packaging materials is driven in part by retailers such as Walmart and Target, but many of the brand owners have a real commitment to the environment as well. Cost savings is not really a driver, says Bielefeldt, because at minimum order volumes, recycled plastics and bioresins both tend to cost slightly more than virgin resins—although Alpha’s research shows that most companies feel that recycled plastic should cost less. “As more companies offer FDA-approved recycled resin,” says Bielefeldt,“we hope that the costs for PCR will come down.”
In addition to light weighting materials through reduction, Bielefeldt points to brand owners who have recognized that they can significantly source-reduce the total weight of their finished package by switching from pressure-sensitive labels to direct screen printing with UV inks. “This is a source-reduction method that almost every beauty brand could embrace,” she says.
In late 2008 and 2009, Bielefeldt says, “We had very few new customers convert to recycled plastics or bioresins such as polylactic acid (PLA). But 2010 looks like it will be a busy year for companies to make that conversion from virgin plastic bottles to bottles with 25% to 100% recycled content.”
And the possibilities continue. Joint research by IBM and Stanford University details discoveries that could lead to the development of new types of biodegradable, biocompatible plastics. The breakthrough also could lead to a new recycling process that has the potential to significantly increase the ability to recycle and reuse common PET and plant-based plastics in the future.
Sustainability on Paper
As Plesent of Vermont Soapworks said more than 10 years ago, consumers can’t be fooled, and today’s savviest are looking beyond product claims to the entire supply chain. Duber-Smith reinforces this thinking, saying that brands have to commit more to sustainability because there’s more scrutiny.
Tullis Russell’s Trucard brand offers a wide choice of coated and uncoated SBS cartonboards for the premium packaging markets.
“Transparency and ethics,” says Duber-Smith, “are the biggest words of the 21st century.”
Dennis Bacchetta, director of marketing, Diamond Packaging, agrees, saying, “There is an even greater emphasis on transparency with regards to claims about sustainability.” He says there is a movement towards substantiated and qualified claims, in part driven by Walmart and the expected revision of the Federal Trade Commission’s (FTC) Guides for the Use of Environmental Marketing Claims.
According to Bacchetta, “All of our business focuses on sustainable packaging in some way.” The core of Diamond’s Greenbox initiative—designs, materials, and methods—represents a comprehensive approach to packaging that minimizes environmental impact throughout the supply chain. The company’s new Heidelberg Speedmaster XL 105 offset printing press represents the state-of-the-art in package printing technology, providing Diamond with a combination of cost innovation and sustainability. “New processes such as FSC certification and commitment to 100% renewable wind energy help us refine packaging by making it better and greener,” says Bacchetta.
Method of Success
San Francisco-based Method was founded on a sustainability ethic in 2001. Now a $100 million dollar company, the innovative manufacturer of products for home cleaning, laundry, hands & body, air care, baby & kids owes its success not only to its use of fresh, non-toxic cleaning agents, fresh, natural scents and pure ingredients—but Methd’s packaging is largely responsible for giving the brand its distinctive identity.
Rudi Becker, one of Method’s directors on the packaging team, says the company was founded to address the issues of style and substance.
“Unique shapes make Method products disruptive on shelf,” says Becker. Modern, edgy design, eco-friendly ingredients and sustainable packaging add up. “We want to do the right thing,” says Becker, “and we are sure to deliver those values.”
Becker says: “It’s our in-house talent that drives it. We think independently, and put something truly different out there.”
FSC certification is becoming a common icon on many beauty packages these days, and marketing director Malcolm Sinclair, of Tullis Russell Papermakers, based near Edinburgh in Scotland, says, “We see an increasing interest from our customers around the world in sustainability issues. Fiber sources remain high on the agenda with FSC certification becoming more and more a qualifier for many brands.”
The company’s Trucard brand is always FSC-certified, says Sinclair, and “we have also had fantastic interest in our PCW content versions with genuine excitement at the unique opportunity to combine the use of 50pc FSC-certified recycled fiber with the traditional properties in look and conversion of a true premium cartonboard.”
Knoll Packaging also specializes in premium packaging, and says its clients are pursuing a number of sustainable avenues; at the top of the list is reuse.
Joanna Sasso, vice president of operations for Knoll Printing & Packaging, Inc., says, “95% of our business is focused on reusable, value added, luxury packaging.” She says, “Our customers are continuing to use the complex designs, but look to use more environmentally friendly materials either for box wraps, or vacuum forms. The boxes we produce are not intended to be thrown away.They are designed as keepsake boxes, so they’re reusable.”
Unlike brands headed for giant retailers such as Walmart, Sasso says, “The merchandise we make packaging for is not intended to sell in discount retail stores.” She adds that consumers purchasing luxury items such as high-end cosmetics, perfumes, or spirits do not expect to purchase that item in a package that does not reflect total luxury.”
Knoll follows sustainable practices on a company-wide level as well. “Our factory is FSC-certified and our office was built to be one of only a handful of LEEDS-certified buildings on Long Island,” says Sasso.
Transparency in Glass
Nothing says reusable like glass, which can be, theoretically, recycled forever. A number of suppliers have provided innovative solutions surrounding glass components and the way they are shipped.
Jim Slowey, vice president marketing and sales for Arrowpak, which offers a broad range of packaging components, says, “While there is a push for sustainable and recyclable packaging, it is still the responsibility of the suppliers to innovate and provide the options that are both eco-friendly and also eco-nomical. The idea of less packaging helps, as a tube that can be delivered to a store without an outer carton becomes not only recyclable, but sustainable due to less packing material.”
Slowey says Arrowpak was recently involved in a large launch for a major retail nail polish brand, and developed a sustainable solution regarding the shipping process. “By delivering the empty bottles without outer cartons but, rather, in trays, the amount of cardboard packing material and the overall weight of the shipment was reduced tremendously. This provided a cost savings not only to the company, but the savings could then be passed on to the consumer,” says Slowey.
Sheherazade Chamlou, vice president sales and marketing at glass manufacturer SGD North America, says, “Sustainable packaging solutions offer a competitive advantage, but over the long term it will become a fact of life and will be seen as just another requirement for doing business alongside pricing, product performance and service.”
Chamlou says, “The pressure for sustainable packaging will continue to intensify, but for this sector to become more proactive, the stakeholders need to develop a harmonized definition of what sustainable packaging is and how sustainability can be measured.”
Taking matters into its own hands, late in 2009, SGD launched the Naya project—which uses the company’s unique “Infinite Glass,” the first 100% recycled and 100% recyclable glass made exclusively from clear household cullet. In addition to SGD’s eco-friendly jar, Naya consists of VPI’s caps made with 100% PET recycled from plastic bottles; Wauters’ box consisting of a “tree-free” board called Bagasse, made of 90% sugar cane residues and 10% linen and hemp; and SGD’s vegetable and aqueous based organic inks used for printing.Strand Cosmetics Europe created the ECOCERT certified dermo-cosmetic skin care made from organic and natural ingredients; and Extreme Paris contributed the eco-thought design.
“SGD N.A.’s new Infinite Glass bottles and jars represent a major innovation and environmental achievement for the glass container industry,” says Joseph Cattaneo, president of the Glass Packaging Institute (GPI). While glass containers for the food and beverage industries are made from anywhere between 25% to 90% post consumer recycled glass or “cullet” in the U.S., glass bottles and jars for the perfume industry are generally composed of 30% cullet and 70% raw materials, including sand, soda ash and limestone.
A Sustainable Future
While the beauty industry’s perfect storm continues to grow in intensity, driven by factors from committed green consumers to aggressive corporate boards, to a patchwork of regulations, brands and suppliers will continue to monitor conditions and gauge popular opinion, looking for what Arrowpak’s Slowey describes as options that are both eco-friendly and eco-nomical.
L’ Oréal’s Alabaster says, “Many of the global beauty and personal care products companies, like L’Oréal, have been measuring and reporting on their sustainability initiatives for many years.Various stakeholder groups including investors, business partners, governmental agencies, NGOs, employees and consumers have a vested interest in ensuring that our industry operates sustainable businesses that provide economic growth, respect for the environment and its use of natural capital and a fundamental responsibility to society.The companies that follow this sustainable business model will be the most successful in the future.”
Duber-Smith agrees, saying, “Smart manufacturers can prepare for this. Key marketers are always going to dictate.”