How CPG Can Achieve Real Sustainability and Transparency
Updated: Apr 21, 2022
Why sustainability is becoming a top priority
Regardless of the industry, from consumer goods to business services, sustainability is a top initiative. Both companies themselves and consumers are demanding accountability in taking action to become more sustainable. Although sustainability has often been thought of as a talking point in past corporate priorities, the public demand for transparency in how a product is packaged and the preference for re-use, has become mainstream.
Two contributing factors have pushed sustainability to the forefront. First, the largest of consumer-packaged goods companies have taken notice of the many brands succeeding that have a sustainable approach to their business. Second, new technologies and the advancement of the circular economy have made sustainability not only eco-conscious but also economical in terms of the efficiencies now possible.
Growth of sustainability-conscious consumers
Nielsen reports that by 2021, sustainability-minded consumers are expected to spend approximately $150 billion on sustainable products. Moreover, internal reporting from Nielsen notes that 81% of consumers hold the opinion that environmental improvement programs by consumer goods companies is “extremely” or “very” important.
What’s next in sustainability – Smart packaging
Many brands have taken steps to implement sustainable packaging, through recyclable or reusable containers. This is a great first step, however, it is missing the ability to offer the product in an efficient manner. The next level in sustainability is to understand how a product is consumed with a high level of accuracy and leverage smart packaging to decrease waste and improve the timing of product delivery.
A reusable container with smart capabilities creates a circular chain of use system. One container with one smart label circulates back and forth between the brand and the consumer, on a predictive need-based platform. Whereas past efforts to increase sustainability typically resulted in poor customer reviews due to inconvenient tasks required by the consumer, smart packaging changes the relationship to the mutual benefit of the consumer and the brand.
Smart packaging as an enabler of auto-replenishment in ecommerce
Auto-replenishment based on when a product is needed, as opposed to a set interval, eliminates negative customer reviews of either not having the product before it runs out, or having too much when it is not needed. Using smart packaging requires no action from the consumer, as the platform is integrated with the brand or ecommerce app to auto-connect and auto-replenish immediately upon the product’s arrival to the consumer.
The desire and demand exists from consumers and brands to increase sustainability. What has been absent is the rapid growth of adopting sustainability in the mass market. In order to achieve widespread adoption of sustainable products, CPG must stop making consumers choose between convenience and sustainability.