Canadian Food Business
By Hugo Fuentes, CEO of The Owl Solutions
Packaging waste is a significant problem for the environment and for companies operating in the food industry. In 2022, the federal government said that 2.8 million tonnes of plastic waste end up in landfills in Canada with only 9 per cent of plastics being recycled.
Packaging materials such as plastic, paper, and metal are often used to protect and transport food products, but these materials can have negative impacts on the environment. The accumulation of packaging waste in landfills, oceans, and other natural habitats can lead to pollution, harm wildlife, and contribute to climate change. As a result, food companies are under increasing pressure to cut packaging waste from their supply chains. Here are some of the reasons why cutting packaging waste is so important for food companies.
Environmental Impact
Reducing packaging waste is crucial for protecting the environment. Packaging materials that are not recycled or reused often end up in landfills or the natural environment, where they can take hundreds of years to decompose. It can take anywhere from 20 to 500 years to decompose depending on the material and structure. This leads to the accumulation of waste that pollutes the soil, air, and water. If soil is polluted, this can have harmful effects on plant growth and the healthcare of the ecosystem. Similarly, air and water pollution can have severe effects on human health as well as economic impacts. Additionally, the production of packaging materials requires significant amounts of energy and resources, leading to greenhouse gas emissions that contribute to climate change. By cutting packaging waste, food companies can reduce their environmental impact and help preserve natural resources for future generations.
Reputation and Brand Image
Today’s consumer is increasingly aware of the environmental impact of the products they purchase. Food companies that are seen as not doing enough to reduce packaging waste may face negative publicity and a damaged reputation. On the other hand, companies that demonstrate a commitment to sustainability can enhance their brand image and appeal to consumers who prioritize environmentally friendly products. Over the past five years, according to research conducted by Kerry, 85 per cent of global consumers have shifted to more sustainable shopping. For food and beverage purchases, 62 per cent of North American consumers say sustainability is a strong influencer.
The IMB Institute for Business 2022 Value survey found that 49 per cent of consumers paid a premium—an average of 59 per cent more—for products labeled as sustainable or socially responsible. There continues to be a growing demand for sustainable brands amongst the younger generations, and they are willing to pay more for eco-friendly brands. By cutting packaging waste, food companies can improve their reputation and differentiate themselves in a crowded market.
Cost Savings
Cutting packaging waste can also be a way for food companies to save money. Packaging materials can be expensive to produce, transport, and dispose of. By reducing the amount of packaging used, companies can lower their costs and increase profitability. Additionally, cutting packaging waste can lead to other cost savings, such as reducing transportation costs by using smaller, lighter packaging or reducing waste disposal fees.
Compliance and Regulations
Governments and regulatory bodies are increasingly introducing laws and regulations that require companies to reduce their environmental impact. In some cases, failure to comply with these regulations can result in fines, legal action, or damage to the company’s reputation. For example, Canada claims to be moving towards a circular economy for plastics by pursuing zero-plastic waste and improving beyond the estimated 89 per cent of total plastics destined for landfills, incineration, or leakage into the environment. There will likely be more laws introduced in the future aimed at helping reduce plastic packaging. It will no longer be an option for organizations but a mandatory order. By cutting packaging waste, food companies can get ahead by demonstrating compliance with environmental regulations and avoiding legal and reputational risks.
Customer Demand
Customers are becoming increasingly aware of the environmental impact of the products they purchase. Studies have shown that a growing number of consumers are willing to pay a premium for products that are environmentally friendly or sustainable. Consumers care more about sustainability with each passing year as they see the impacts of climate change. Some are also concerned with the health risks associated with certain products or materials, such as toxic chemicals in food packaging.
Prolonging solutions to reduced plastic waste is a detriment to supporting Canada’s transition towards a zero-plastic waste future. By cutting packaging waste, food companies can meet customer demand for sustainable products and potentially increase sales. In fact, cutting packaging waste from supply chains is important for food companies for several reasons. It can reduce the environmental impact of packaging materials, improve brand image and reputation, save costs, ensure compliance with regulations, and meet customer demand for sustainable products. But it’s hard to get started, especially with poor data. Companies looking to get started could consider working with third-party solutions providers.
Additionally, if they want to start internally, they should conduct packaging waste audits, utilize predictive analytics, collaborate with suppliers, implement recycling programs, and optimize packaging design. By doing so, they can achieve both environmental and business benefits.
Hugo Fuentes
CEO of The Owl Solutions
Fuentes is a passionate supply chain professional with a wealth of experience in driving performance and efficiency. Having held various roles in the supply chain for manufacturing companies across North and South America over the past 20 years, he has developed a deep understanding of the challenges and opportunities inherent in the industry. It was during this time that he observed supply chains operating in a state of data chaos, resulting in inefficiencies throughout the process that negatively impacted both the bottom line and environment.
Determined to create a better way forward, Fuentes founded The Owl Solutions—a supply chain performance platform that is committed to helping food manufacturers achieve their desired business outcomes while promoting sustainable practices for people, profits and the planet. By leveraging the latest cloud-based software and insights from his team of experts, Fuentes is empowering companies to streamline their supply chains and drive greater efficiency at every step.
