Sustainability in Spirits - Part IV - Packaging
The final part of this month’s management briefing, which looks at environmental sustainability in the spirits industry, looks at the role that packaging has to play in helping to keep things green.
Packaging is a key contributor to the total environmental footprint of spirits brands and as a result sustainable packaging initiatives feature prominently in the environmental sustainability strategies of all major spirits producers.
Dave Howson, global sustainability director at Bacardi, points to growing consumer expectations around the environmental sustainability of packaging. "Packaging is very important to our consumers globally, and it is, therefore, very important to our business. Consumers expect companies to reduce the environmental impact of packaging as a matter of course."
As the "most visible and 'hands on' part of the consumer experience", it is through packaging that consumers "encounter the passion of our brands", says Howson. "We need to innovate and strive for excellence in our packaging, developing a clearer understanding of what this means for each brand and how this contributes to our corporate values."
The importance of packaging to the Bacardi sustainability strategy is underlined by the fact that packaging accounts for approximately 57% of its total spend on raw materials. It represents around 400,000 tons of raw materials in volume each year and accounts for half of the company’s extended CO2 emissions, that is those emissions from both within the company's own operations and those of its suppliers.
Bacardi has set a packaging weight-reduction target of 12% by 2017, increasing to 20% by 2022, from a baseline figure in 2008. In order to support its packaging commitments, the company has just completed the development of a new Sustainable Packaging Manual
"The new Bacardi Sustainable Packaging Manual provides a focus for the continued development of sustainable packaging within Bacardi Limited," says Howson. "It helps to concentrate attention on the potential for changes in our thinking and on the implications for performance across the product/packaging lifecycle. Checklists, tools and links are highlighted within the document to support this process."
Howson says use of the Bacardi Principles of Sustainable Packaging will "inform the way we make decisions to achieve these targets".
Diageo, meanwhile, has also set targets to reduce the average packaging weight of its brands, along with increasing the recycled content of its packaging, and making all of its packaging recyclable or reusable by 2015.
In its most recent Sustainability and Responsibility Report, the company states that it has "made progress towards all three of our targets".
In total, the company saved 12,200 tonnes in packaging weight, a reduction of 1.2% over the year. Since 2009, Diageo reports, it has managed to reduce the average weight of packaging by 5.3, which it sees as "good progress" towards achieving the 10% reduction the company is committed to reach
Among the reductions detailed in the report, Diageo saved 1,600 tonnes in its total packaging weight by reducing the weight of Smirnoff Ice glass bottles in Venezuela. A further 2,500 tonnes of packaging weight were saved by launching a new bottle design for the J&B whisky brand. With regard to its commitment to make all of its packaging 100% recyclable or reusable by 2015, Diageo says this year the proportion had reached 98.5%, compared to 95% in 2009.
The company also records progress towards its goal of increasing the recycled content used in its packaging. The company aims to increase the average recycled content across all of its packaging by 20% to 42% by 2015.
The new Baileys bottle design was instrumental in achieving a group-wide 2% increase in recycled content to 36.5%, the company reports. The new Baileys bottle is made from 60% recycled glass. The group figure was also boosted by the increased use of recycled glass in the Smirnoff and Bundaberg rum brands in Australia.
Overall, 80% of the cardboard Diageo uses and 52% of the aluminium cans it sells are made from recycled material. However, glass is naturally the company's largest packaging material by weight, and boosting recycled content in glass is challenging, particularly in certain geographies.
This is another area where working with suppliers, along with other stakeholders, is critical to the sustainability aspirations not only of Diageo but of all spirits producers.
Diageo highlights a number of programmes where it is working with external partners, such as retailers, consumers and other stakeholders, to boost recycling rates. In Brazil, the company is working with customers, suppliers, and co-operatives in a glass recycling campaign. Its local partner, Cooperative Vira Lata, collects glass from participating customers, saving recycling costs for both customers and consumers.
Meanwhile, Diageo's bottle manufacturer, Owens-Illinois, buys the ground glass from the co-operative, generating income for more than 60 co-operative members. The company reports that this year over 1,300 tonnes of glass was recycled. The programme was also recognised as one of the best 'sustainability practices' by the American Chamber of Commerce at the Fibops and ECO Awards. Following the success of the Brazilian initiative, Diageo has launched glass recycling initiatives in four cities in Colombia.
Diageo reports some progress towards its recycled glass content target in its most recent sustainability report. For example in South Korea the company's glass suppliers achieved major progress this year, increasing recycled content on average to 52% from 20% in 2012.
Diageo and other major spirits manufacturers point to the greater challenges that exist in North America, where recycling rates are low. Good quality cullet, necessary for producing the clear glass bottles required for the majority of spirits brands, is not always readily available. The company says it is "committed to finding ways to work with government, industry, and suppliers to improve this".
While engagement with consumers on recycling is clearly critical both to spirits companies' targets for recycled content and the aims of glass suppliers and governments, consumer expectations around factors such as bottle weight remain a concern for spirits brands, as Brown-Forman points out in its Corporate Responsibility Report 2012-2013, published last month.
"The packaging of our products, both primary (the bottle) and secondary (the case), is an integral element of the brand experience and consumer perception. Often it can be challenging to minimise the environmental impacts of our packaging while maintaining a premium brand image," the report states.
Brown-Forman said it had been working with its packaging teams during the year to "review and strengthen" its sustainable packaging policy in terms of both content and application, and to "develop better metrics for making comparisons between packaging design choices". Recycled content is one of these metrics, along with packaging efficiency, distance the material has travelled and third-party certification.
Brown-Forman also says it will be rolling out updated packaging guidelines and beginning to use the new metrics during the coming year. "We'll be communicating the principles of sustainable packaging design and material selection to more of our employees, and we plan to integrate sustainability reviews into the project management process for all new and revised product packaging," the company states.
For full details of this month's briefing, click here.
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