Being `green': how much does it cost? How much does it pay? A global commitment to `environmental stewardship,' incessant legislation and consumer opinion all impact your bottom line

Food & Drug Packaging, Oct, 2002 by Lisa McTigue Pierce

Recycling, recycled-content materials, bottle deposits, `producer pays' programs: The environmental issues of packaging that hit peak levels in the late 1980s and early 90s have not gone away. Depending where you look, though, current climates range from lukewarm in the U.S. to feverish in parts of Europe, Canada and Asia.

The cost and quality of environmentally friendly materials--like recycled-content paperboard and biodegradable resins--continue to level off (see "Biodegradable resins enter mainstream packaging market," FDP, May 2002, p.9). To be competitive, these material suppliers are concentrating on performance, both on the production line and throughout the supply chain.

The worldwide packaging industry seems to be on a positive path when it comes to environmental budgeting. The logistics and cost of post-consumer packaging collection in the U.S. and abroad continues to improve, albeit with its ups and downs, as evidenced by these recent events in Philadelphia and New York City.

The up: The City of Philadelphia recently signed a one-year contract for residential recycling services with Smurfit-Stone Container Corp.'s local recycling plant. Smurfit-Stone will purchase and process newspaper and commingled materials, including glass and metal food and beverage containers. The City of Philadelphia will earn approximately $700,000 in rebates from the sale of the recycled materials.

The down: Earlier this summer, New York City stopped its curbside collection of plastic and glass bottles to save an expected $40 million a year in disposal costs ($110 a ton to collect and recycle materials vs. $65 a ton for landfilling). The city also cited lack of markets for collected materials, although plastic groups argued that recycling capacity currently exceeds supply. Mayor Michael Bloomberg remarked, "The fact of the matter was that it was phenomenally expensive, and most of it ended up being dumped in a landfill anyway."

When it comes to packaging and the environment, two issues outside your control can force you into action:

1. Winning favor with environmentally conscious consumers.

2. Dealing with regulatory mandates, at home and away.

Winning the `green' vote

Does being "green" win any brownie points with U.S. consumers? Today, not so much.

According to The Wall Street Journal article "Eco-marketing is failing to move products off the shelf," published in early March, the pressures of busy lifestyles beat out concern for the environment:

"Shoppers will pay for convenience far more readily than for ideology. Last June, after 70% of baby-food shoppers said they would prefer the convenience of plastic jars, Gerber Products Co. switched from glass to No. 7 plastic, which can't be recycled.

Gerber Products was able to dodge an unpleasant media thrashing with its switch from glass to plastic. Not many companies have been able to weather the negative publicity provoked by consumer advocates and environmentalists.

This spring, PepsiCo Inc. was lambasted by several environmental groups--including the GrassRoots Recycling Network based in Athens, Ga.--for not fulfilling its 1990 promise to use soft-drink bottles made with 25% recycled plastic. A PepsiCo spokesperson defended the company, saying, "Even as we speak we are looking at various technologies." For PepsiCo to increase its use of recycled plastics in soda bottles, the spokesperson emphasized, "It must be cost effective."

Aah. Reality.

Pepsi's main competitor knows how to write an environmental balance sheet. Coca-Cola Amatil Australia announced that it had switched to new micro-flute corrugated cases for its full line of beverage can multipacks. The new material replaces coated paperboard, is easier to recycle and can potentially divert up to 5,000 tons of material from landfills each year. According to the company's managing director, Andrew Reeves, "It reinforces our view that good environmental stewardship can also lead to good financial returns."

Another beverage giant shows how its environmental stewardship has helped boost profits. According to the 2001 Environmental, Health and Safety report from Anheuser-Busch Companies, in 2001 the company recycled nearly 800 million pounds of aluminum cans, 70 million pounds of glass, 45 million pounds of paperboard/corrugated and 2 million pounds of plastic strapping--materials Anheuser-Busch didn't have to pay to dispose of or replace.

The legal front

Regulations have been another kink in the environmental chain for the packaging industry.

Keller and Heckman, a Washington, D.C. law firm that specializes in food and drug packaging regulations, published an article in August that gave an overview of packaging and environmental legislation in the U.S. The entire piece is on the company's website at www.packaginglaw.com/index_mf .cfm?id=90.

Written by Ralph Simmons, John Foley and Crystal Lovett, the article makes this conclusion:

"It seems clear that the momentum of solid-waste-related environmental regulation of packaging has slowed somewhat since the early 1990s. It is less clear whether this slowdown is attributable to increased understanding of the value of food packaging materials and the arguably excessive blame they have taken as the cause of waste management problems, or to a possibly temporary shift in regulation priorities to competing `hot' environmental topics, such as bioterrorism, global warming, endocrine disruptors, and control of food-borne pathogens."