Packaging optimization for SMEs

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1 1 Feature for SMEs An opportunity to cut costs and increase competitiveness has become second nature for a great many companies. In practice however, it appears that SMEs in general and smaller companies in particular are lagging behind. Because of this, they are missing out on many opportunities to cut costs and increase their competitiveness. A lack of time, knowledge and financial resources are often cited as reasons for this situation. Yet there are far more possibilities for SMEs to optimize their packaging than they might think. The creative and intelligent use of available resources is crucial in this regard. Three excuses not to optimize your packaging We do not have the time Larger companies often have in-house packaging specialists, who have enough time to make sure they keep up to date with new developments and set up optimization projects. In SMEs it is often the company director who is responsible for this aspect or an employee who combines the responsibility with a considerable number of other tasks. In addition, we often see that some SMEs use the same packaging for years without reassessing it, observes Sylvie Meekers, Director Quality, Control & Prevention at Fost Plus. All too often in our frontline advice activities, we see SMEs only We do not have the financial resources It is not easy to obtain external finance for optimization projects in the current economic climate, admits Vanden Abeele. Therefore, it is particularly important to view packaging optimization in a broader context. In many cases, investing in new packaging will also increase production and logistics efficiency and be cost-effective in terms of energy, materials and waste. This means that investments in packaging optimization are often recovered much more quickly than many company directors imagine. good to remember SMEs miss out on a great many opportunities to optimize their packaging. This is often incorrectly blamed on a lack of time, resources and expertise. take action if the legislature or the customer obliges them to do so, agrees Piet Vanden Abeele, consultant at the research department of UNIZO. And that is a shame because they miss out on a great many opportunities not only to make their products more environmentally and user-friendly, but to cut costs and increase their competitiveness as well. Because packaging optimization just like energy efficiency or water-saving measures is an area in which SMEs can still achieve significant improvements. For this reason alone it is important that company directors devote enough time to this aspect of the business. Moreover, packaging optimization does not always need to be the result of a research project that took years to complete, Sylvie Meekers emphasises. Sometimes you can achieve a great deal with creative and innovative solutions. One retailer was able to reduce the quantity of plastic packaging for his cleaning cloths by 50%, simply by folding the cloths in half before packaging them. SMEs can certainly accomplish these kinds of measures. Optimization does not always require major investments or long-lasting research projects. Moreover, a great deal of expertise is available free of charge. is good for the environment, but it may be even better for the company. It can cut costs and tap into the growing market of sustainable consumers. June 2013 R.E.:. Goossens Fost Plus asbl Avenue des Olympiades Brussels.

2 2 Feature for SMEs We do not have the knowledge in house It is not always easy for SMEs to keep up to date with new trends in packaging. It is true that the world of packaging and packaging materials evolves at a fast pace, says Karel Gemmeke, business development director at VAL-I-PAC. Nevertheless, today there is considerable expertise available to SMEs often free of charge. They can find tools on the internet to test their packaging, and many organizations offer free or subsidized advice. The role of the packaging supplier is also important in this respect, continues Gemmeke. Too often companies especially SMEs lack the motivation to challenge their supplier to do better. Those suppliers quite often possess the necessary expertise and practical know-how. What s more, it is also in the suppliers interest to broach the subject with customers, given the fact that it can strengthen the relationship with their customer. Three good reasons to optimize your packaging is good for the environment. There is no doubt about that. But is it also good for your business? Below you will find three good reasons for SMEs to embark on packaging optimization. They reveal that there are many opportunities to cut costs, improve your image and attract new customers. Save costs: sustainability doesn t have to be expensive In addition to the obvious environmental benefits, packaging optimization almost always has a positive impact on operating costs. Reducing the volume of materials used not only leads to lower costs related to waste processing and the purchase of materials. It also means lower weights, smaller volumes and thus reduced costs for transport and storage. This is why it is essential to look at packaging optimization across a product s entire lifecycle the purchase of raw materials, production, transport, storage, consumption, sorting and recycling, says Martin Neys, ecodesign consultant at UCM. By using more sustainable materials, fewer harmful substances and increasing the packaging s recyclability, the cost of waste processing will also continue to fall. You can find more information on this subject in the role file.

3 3 Feature for SMEs Improve your image: ecological packaging makes all the difference Consumer demand for ecological packaging is constantly increasing. The public mindset has changed dramatically. In the past, consumers often considered large, sturdy packaging as an indication of a product s quality. The bigger the packaging, the better. Today, there is a negative perception when encountering excessively large packaging or packaging that appears to be superfluous. Furthermore, the sustainability of the materials used increasingly plays a role in the decision to buy a product. This is not limited to consumers. Businesses and local authorities are very keen on green procurement. Companies that approach the matter with a smart strategy can turn their packaging approach into a competitive advantage and increase their market share, says Perrine Collin, ecodesign consultant at UCM. New packaging can actually be a dream marketing opportunity. Ecological, attractive and modern packaging boosts sales and offers the perfect opportunity to tap into new markets. Stay one step ahead: proactively anticipating legislation Nowadays, optimization initiatives are generally the result of pressure from changing legislation. SMEs generally view legislation as a burden rather than an opportunity to lay sustainable foundations for the company s future, says Martin Neys. It is clear that the legislature both on a national and on a European level has drawn the sustainable materials policy card. So it is also important for SMEs to respond to this proactively and to go beyond what is legally required today. In fact, SMEs have an important advantage in this respect: they are often considerably more flexible than large multinationals and if the entrepreneur is willing can implement drastic changes much more quickly and operate proactively. June 2013 R.E.:. Goossens Fost Plus asbl Avenue des Olympiades Brussels.

4 4 Feature for SMEs where do you start? You want to start optimizing your packaging, but just don t know the best way to get started? The questions below can help you on your way. Good luck! Ask the right questions A comprehensive analysis of your existing packaging is the first step in any optimization project. There are three crucial questions: 1 - Is the amount of packaging appropriate for your product? This is undoubtedly the most important question. Examine your product and determine how much and which packaging is really necessary to adequately protect and preserve it. Not too much and not too little. Also consider the packaging s shape and volume. Packaging that is insufficiently aligned with the product results in empty space that translates into additional costs during transportation and storage. 2 - Are you using the correct materials? Consider the type of material as well. Does your packaging contain harmful substances? Are you using the best material to optimally protect and preserve your product, or are better alternatives available? Is it possible to shift to more environmentally friendly, recycled, recyclable or reusable materials? 3 - Can you reduce the number of materials used? In practice, packaging made from several different materials is often difficult to recycle. Moreover, packaging consisting of a single material is usually easier and cheaper to produce. Enlist the help of (external) specialists Often SMEs do not possess the time or the expertise to work on optimizing packaging. Enlisting the help of external specialists is usually recommended in that case. An outsider s view can also be enlightening. Outsiders will most likely be able to quickly identify improvements. What s more, this external expertise does not need to be expensive. Fost Plus and VAL-I-PAC offer many free tools on the internet to help you get started. You can also approach Fost Plus and VAL-I-PAC for a QuickWin diagnosis, whereby you benefit from an expert s services for one day free of charge. You can also obtain free or subsidized advice about your packaging from many other bodies. You can find more information about this subject in the role file. For additional information

5 Example Ethiquable Case story Ethiquable: reconciles fair trade with ecology and economy Ethiquable is a cooperative with the clear social objective of promoting organic and fair trade products. The core of its business is the support of sustainable agriculture. We aim to reduce our environmental footprint while at the same time developing a profitable business model. Sustainable packaging has an important role to play in this. But our packaging strategy cannot be decreed from behind a desk, explains Stephan Vincent, Benelux Director. Open and transparent communication raise the credibility Founded in France in 2003 and active in the Benelux since September 2009, Ethiquable creates, develops, manufactures and distributes a range of 100 organic fair trade products originating from sustainable agriculture. With consumers becoming increasingly sensitive to the needs of the environment, Ethiquable has put in place a business model that successfully responds to this sensitivity. It has achieved an annual growth rate of almost 50%. Working with 40 partners spread across 23 developing countries, Ethiquable situates its core business in sustainable development Packaging: the highest environmental impact Its ethical and organic fair trade commitment requires this cooperative company to be consistent in its operations, particularly in terms of its environmental responsibility. In very specific terms, Ethiquable has analysed and prioritized the areas in which its activities have the greatest impact on the environment: Packaging has the highest impact: from 23 to 28% of the total impact Transport takes second place: products originating from distant countries are imported exclusively by sea The product s end of life is the third major impact to be considered. As a result, Ethiquable has achieved marked and noticeable efforts in optimizing its packaging in recent years. In 2012, it was the winner of a Greener Packaging Award for the packaging of its herbal teas. Other recent developments include: Replacing two 250g coffee packets with a 500g economy-size package. This resulted in a 54% savings in consumer packaging. Another noteworthy development is the good to remember The approach of Ethicable meets both an environmental AND economic objective. according to an approach which is as comprehensive as possible, including social, economic and environmental considerations, explains Vincent. As a former director of Oxfam he is a trusted voice when he states that our desire to reduce our impact on the environment is part of our cooperative s DNA. A key point in Ethiquable s philosophy aims at developing maximum added value for the producer. We enable them to assume power over the processing of their product. Most products are therefore grown or manufactured, processed and packaged on site. elimination of aluminium throughout the entire range of Ethiquable coffee product packaging. Prioritizing the use of materials that respect the environment when manufacturing its packaging: i.e. printing with plant-based inks and using recycled cardboard to package chocolate and tea. The volume of cereals and rice packaging has been reduced by better aligning the packaging to the actual quantity of product. The elimination of external film and staples for sachets of tea and herbal tea. The tangible results of this approach are twofold and offer numerous positive effects. At the end of their life cycle, certain products are now entirely recyclable, while the reduction in packaging volume results in lower transport costs on the one hand and lower volumes of waste on the other. Ecodesign requires one to listen and gather accurate consumer information. requires close collaboration with producers, often involving technical training. June 2013 R.E.:. Goossens Fost Plus asbl Avenue des Olympiades Brussels.

6 Example Ethiquable Case story Ethiquable: reconciles fair trade with ecology and economy The challenges of optimization processes represent a major challenge for cooperative networks, often located in developing countries that do not always possess the necessary technical expertise. This requires the on-site educational efforts of Ethiquable s employees, as well as collaboration with, for example, Agronomists and Veterinarians Without Borders (AVSF). Rather than changing suppliers, Ethiquable assists and supports its existing partners in learning a new process. As a rule, the implementation of these improvements, dictated by a very pragmatic approach, results in positive economic terms for Ethiquable and the producers themselves. These include transport optimization (improved use of space) and lower production costs (lower quantities of packaging used), among other considerations. Investments do not necessarily represent a barrier. Fair trade guarantees a minimum price as well as a development subsidy. The latter is allocated to the cooperative, which then distributes it where it can accomplish the greatest good. Ethiquable s advice: «How do you eat an elephant? One bite at a time» Fair trade business today represents only 0.01% of global trade. Effecting a major change will require starting small. One must take a measured approach to organic fair trade. It is a niche market that meets a growing demand. Today the fair trade product is the same quality as a conventional product but it must offer more if it is to become more competitive. The fair trade product must be visually as well as ethically appealing. The organic fair trade business model aims to be profitable while being beneficial to producers and consumers.

7 Example Happy Case story Smart toys in smart packaging Toy manufacturer Happy from Zoersel has proved for years that a small player can stand its ground in a sector dominated by large multinationals. The company s Happy Cube puzzles occupy the shelves of select toyshops in more than 40 countries. Being smart and creative is our trademark and we apply the same philosophy to our packaging, says CEO Gerdy Loots. If you adopt an intelligent approach, packaging can offer important competitive advantages. The company was rewarded in November 2012 for its approach with one nomination for the prestigious Greener Packaging Award. The cube concept The concept behind the Happy Cube puzzles was invented by a Belgian Dirk Laureyssens from Zoersel. He came up with the idea in The concept is as simple as it is ingenious, explains Natalie Tempelers, PR Manager at Happy. It consists of six puzzle pieces that you have to fit together to construct a perfect cube. The number of combinations is endless. Dirk Laureyssens designed over 300 cube puzzles in total, in different shapes From 2D to 3D In addition to the fun aspect, the puzzles offer enormous educational added value. For example, they help to develop children s motor skills and spatial awareness. Children make the step from two dimensions to three when they work on this type of puzzle. and degrees of difficulty with more than 7,500 different puzzle pieces. We distribute a wide range of puzzles on the toy and executive gift market, from the recently introduced Smart Cube for the youngest player to the Marble Cube for more advanced puzzle fans. Moreover, the puzzles also stimulate creativity. Besides cubes, different puzzle pieces can be combined to create other figures and objects. Sometimes their creations can be quite astonishing. Quality and sustainability first and foremost Sustainability has always been part of the Happy philosophy. For example, all of our products are manufactured locally in Belgium, because this offers the best guarantee for sustainable production, explains Tempelers. We can guarantee that no child labour is involved and that the puzzles are manufactured Packaging part of the product Happy extends this sustainable philosophy to the packaging it uses for its products. It starts with the production process for the puzzles. The remaining edges around the puzzle pieces, which would normally be considered as production surplus, are an integral part of the product and mean that the puzzle pieces can be conveniently stored. Think of it as packaging that you don t have to discard, says Loots. good to remember Happy reduced the volume of its packaging by two-thirds by eliminating empty space. in an environment that is safe for its workers. They are also produced from child-friendly materials based on natural rubber. They are odourless, contain no harmful substances and last a very long time. They can even be washed in a normal household washing machine at 30 C. We currently sell our B2B products without any packaging at all, adds Tempelers. Corporate gifts are usually distributed straight from the cardboard box, or are conveniently stored somewhere for example at the reception desk. Additional film around the product offers little added value. This means we are achieving savings that benefit our customer as well as the environment. The packaging is produced entirely from recycled and recyclable materials. does not just reduce the environmental impact; it also reduces manufacturing and transport costs. June 2013 R.E.:. Goossens Fost Plus asbl Avenue des Olympiades Brussels.

8 Example Happy Case story Smart toys in smart packaging How packaging offers a competitive advantage Why pay for transporting nothing Over the years, Happy has made exceptional efforts to align its packaging to the product. There s no point in transporting air, CEO Loots remarks. Therefore, we have eliminated any unnecessary space in the packaging. Today one export box contains 40 puzzle packs. Ten years ago, it would have contained just 14. This makes a significant difference, particularly over long distances. For transport to Australia for instance, this achieves a saving of at least one euro per puzzle! It is a difference that you can pass on in full to the consumer. This is a major advantage in a highly competitive market such as the toy sector, a sector in which products are often manufactured in low-wage countries and from inferior or untested materials. In other words, packaging optimization is not only an environmental matter, but also involves an important economic component. Happy works closely with its packaging supplier even though the latter was initially hesitant. Some customers were also somewhat sceptical. We have noticed that in some countries, customers still want the illusion of a large box, Loots observes. Fortunately, these customers are becoming more enlightened and are now the exception rather than the rule. The price advantage certainly plays an important role in this respect. Recycled and recyclable Happy s principles also apply to the packaging materials used. We have been using recycled paper for our packaging for many years. However, we recently succeeded in making our packaging fully recyclable with a few simple adjustments. This further increases the sustainability of our products. The company was recently rewarded for its efforts in packaging optimization with one nomination at the Greener Packaging Awards. We are obviously pleased that the efforts our company makes are being recognized. And we are living proof that attention to packaging optimization pays big dividends for an SME, concludes Gerdy Loots. Standing out on the shelves Packaging plays a major role in this sector according to Loots. Toys are often an impulse purchase so standing out on the retail shelves is vital. As a small player in a sector where multinationals often dominate toyshops, we view packaging as one of the truly important elements that distinguishes us from the competition. We thoroughly considered every aspect of our packaging. It is not an accident that the specific, immediately recognizable fluorescent green Happy packaging stands out even in the least visible corners of the largest toyshop. We devote special attention to the aesthetics of our packaging. We strive for an attractive packaging that consumers will want to keep rather than throw away. This is also perfectly in line with the sustainability philosophy of our puzzles and their long lifespan. We are not in the business of manufacturing disposable products. Happy and sustainability Happy puzzles are manufactured locally in a safe environment for workers. They are produced from child-friendly materials based on natural rubber. They are designed to last a very long time and can even be washed in a household washing machine.

9 1 Multiple functions of packaging The economic advantages of packaging optimization In addition to the obvious environmental advantages, packaging optimization almost always has a positive impact on operating costs and results. Below you will find an overview of the economic advantages that packaging optimization offers. Reduced costs Direct costs Purchasing materials. Primary raw materials are becoming increasingly scarce and costly. By reducing the quantity of materials used, you are therefore saving on purchasing costs. Moreover, recycled materials are often cheaper than virgin materials. Waste processing. Reducing the amount of packaging material lowers the cost related to waste processing. Materials that contain fewer or no harmful substances are often easier and less expensive to process. Transport and storage. Make sure the packaging and the product are perfectly aligned. Less weight and less volume also means lower costs for transport and storage. This is certainly true for products that need to be transported over great distances. Reduced losses due to damage or deterioration. Packaging optimization ensures that your products are better protected and preserved. This means you are reducing the risk of damage or deterioration during transport and storage as well as any costs associated with the latter. Indirect costs Simplified production processes. often leads to an optimization of production processes as well. The less varied packaging materials you use, the simpler the production process will become. Fewer safety risks. The use of less harmful materials increases your employees safety and reduces the risk of accidents. good to remember Packaging optimization reduces costs: less material, less waste, cheaper transport and reduced losses. Improved stakeholder relationships. is good for your image and creates goodwill with all your stakeholders. This means it will be easier for you to attract new employees, find new customers and construct a better relationship with the authorities. Packaging optimization may result in improved stakeholder relationships. New and improved packaging can boost sales of existing products. June 2013 R.E.:. Goossens Fost Plus asbl Avenue des Olympiades Brussels.

10 2 Multiple functions of packaging Increased sales Ecology sells. Consumer demand for sustainable products and sustainable packaging is constantly increasing. By optimizing your packaging, you will attract new customers and increase your market share. This also applies to companies that sell to businesses and local authorities green procurement is becoming increasingly important in the purchasing policy of many organizations. New packaging, new momentum. By introducing new packaging for your product, you can boost sales of existing products. It also presents an occasion to communicate with customers and create new commercial opportunities. Tools and services for optimizing your packaging Fost Plus and VAL-I-PAC offer a series of tools and services that can help SMEs optimize their packaging quickly, tailor-made and free of charge! Counter Frontline advice for your packaging. You send your existing packaging or a prototype of your new packaging to the packaging specialist at Fost Plus, who formulates initial recommendations for your packaging s sustainability and recyclability. prevention@fostplus.be QuickWin diagnosis One day of free advice from a packaging specialist. A packaging specialist spends one day at your business premises and identifies potential areas in which you can improve your packaging. You receive a report with specific tips and quick wins as well as advice for the long term, which you can discuss directly with your packaging supplier(s). prevention@fostplus.be

11 3 Multiple functions of packaging Pack4ecodesign Simplified life cycle analysis for your packaging. You go to the online tool and enter a number of basic details for your packaging. The tool calculates your packaging s environmental impact (on CO 2, water and energy) for each phase of its life cycle. You receive tips and advice for each step on how to improve your packaging, and you can measure the impact of the improvements using a simulation. In addition to the free tool, there is also a paid expert version available which can perform a more detailed, customized life cycle analysis for all your packaging. All Fost Plus members are entitled to a discount on this expert version. Pack4recycling Analysis of your packaging s recyclability. You answer a number of simple questions related to your packaging and the materials used and immediately discover the recyclability of your packaging. You obtain an overview of the main points of concern and how its recyclability can be improved for each type of material. Preventpack Information platform for prevention and packaging optimization. You can stay up to date with new trends in the world of packaging with the regularly published editions of Preventpack. You can find dozens of specific cases of companies that have implemented packaging optimization in practice on the website. In addition to Fost Plus and VAL-I-PAC, many other organizations also offer services related to ecodesign. Please visit the websites for more information. June 2013 R.E.:. Goossens Fost Plus asbl Avenue des Olympiades Brussels.

12 4 Multiple functions of packaging Ecodesign the key to success UCM s ecodesign department helps SMEs to adopt a general approach that reconciles economic development with respect for the environment. The approach takes account of all phases of a product or service s life cycle including packaging to reduce its environmental impact to a minimum throughout the entire process. The diagnosis comprises three phases: Phase 1 : Assessment Phase 2 : Areas for improvement Phase 3 : Ecodesign strategy In an initial meeting, which lasts half a day, the consultants increase the participants awareness of ecodesign in the company. They perform an assessment of what is at stake for the company and determine a specific ecodesign strategy in consultation with the management. The consultants produce a study, based on the information and documentation collected, which identifies the different approaches for an improved ecodesign for the product or service. In a second meeting, a tailored report is presented. The consultants propose a customized ecodesign strategy, together with the financial and human resources available in the region to help SMEs to implement the project. For additional information