By Daphna Nissenbaum, CEO of TIPA Corp.
Consumers are increasingly seeking sustainability in the products they buy — and are willing to pay more for it. Studies show that at least 65% of consumers worldwide would prefer to purchase sustainable products and services, given a choice, and the large majority would be willing to pay more for “green” options.
So it makes sense that companies are increasingly looking for ways to reach the growing number of consumers concerned about sustainability. One of the most recent developments in this quest for sustainability is that companies have been going beyond their end-products and seeking more sustainable practices throughout their supply chains. This can lower the overall environmental impact of products, predominantly by reducing shipping and transportation requirements and associated emissions, from abroad or afar. In turn, this lowers impact on the environment, and also appeals to eco-conscious consumers, positioning companies more in line with trends, industry standards, and regulations.
In fact, a growing number of large companies have pledged to improve the sustainability — and the transparency — of their supply chains, including packaging. These pledges make it clear that supply chains are a growing concern. Improving supply chains is crucial to boosting overall sustainability and mitigating climate change, as so called Scope 3 emissions, which comprise packaging, transportation, disposal of products, and other aspects of the supply chain, make up 90% of the greenhouse gas emissions of large companies.
And one of the best ways companies can improve the sustainability of supply chains is to not only use more environmentally-friendly packaging, including compostable options, but to make sure that packaging is manufactured close to where it will be used. Locally-sourced sustainable packaging is a double-win for businesses and the planet.
Environmental and economic benefits of locally-sourced packaging
When packaging is produced locally, less fuel is required to transport it to the businesses that will use it. When distances are shorter, there is also a greater chance that any transportation used will be more sustainable. For example, electric vehicles can move items short distances and have far less of an environmental impact than airplanes or ships.
In addition to environmental benefits, locally-sourced packaging production saves companies money on transportation. Other benefits of locally-sourced packaging include providing local jobs and helping the local economy. These are values that a growing number of consumers are seeking and willing to pay more for — more than 70% of Americans say they prefer to shop locally in order to benefit their own communities.
Compostable packaging as a viable alternative to conventional plastics
Options are also growing today for locally-sourced packaging made of more sustainable materials, such as compostable plastic. Compostable packaging is available for products of all sizes and shapes, and for many types of items, including clothing, food, and fresh produce.
And it’s becoming more popular. According to industry experts, the global market for compostable food service packaging is currently about $20 billion and is set to reach some $30 billion over the next decade. Similar exponential growth is expected in compostable packaging for other industries, surveys show.
Compostables represent a prime option for businesses seeking to plug into that virtuous cycle. Although recyclables have long been in fashion, the sad fact is that most of the plastic that is supposed to get recycled doesn’t. Only 9% of the plastic produced globally is successfully recycled, with much of the “recycled” plastic labeled “recyclable” ending up in the dump. After decades or even centuries in landfills, conventional plastic never truly disintegrates, rather it eventually turns into microplastics, which many experts see as an even bigger problem than full size plastics. In order to stand true to their sustainability claims, companies should use compostables, which also break down into agricultural compost and can be used to increase crop yields and capture atmospheric carbon.
Locally-made sustainable packaging sets companies apart
Putting together both concepts — producing sustainable, ideally compostable, packaging at a local facility — could help companies appeal to the wide swath of consumers who want to make spending choices that are healthier, or at least less damaging, for themselves and the environment. With locally-sourced compostable packaging, companies will be more sustainable, which is beneficial to both our planet and their customers, who demand sustainability.
Thus begins a virtuous cycle — production and sales of sustainable products in sustainable packaging, less pollution and packaging waste, more jobs in the community, and higher sales for companies selling in that community with increasing demand, leading to more production of sustainable products, and so on for a repetition of the cycle.
With the waste problem growing exponentially every year, jumpstarting this virtuous cycle is more important than ever. The technology is there, the demand is there, and the market is there. Companies that adopt compostable packaging will find that all three pay off for them, and for the world.
Daphna Nissenbaum is the CEO and Co-Founder of TIPA, a leading developer and manufacturer of compostable packaging founded in Israel in 2012. The company’s packaging solutions are currently being implemented worldwide by leading global brands in Europe, Australia, and the US. Daphna holds an MBA specializing in Marketing and Entrepreneurship from IDC Herzliya (graduated with honors) and a BA in Economics and Software Engineering from Bar Ilan University.
