Is Sustainable Packaging Worth The Investment?
Eco-friendly packaging comes in an array of forms – from plastic-free bio- or plant-based solutions and alternatives like TetraPaks, to the recyclable glass and aluminum types, to the still niche, but growing, compostables and many more.
While sustainability improvements, goals and initiatives are often an inherent aspect of modern mission-driven natural food and beverage brands, a recent report from McKinsey and Co. indicates that what’s on the outside isn’t resonating as much with consumers in an environment where food prices are elevated and shelf-life, product quality and safety are top of mind.
“The post-2020 era has been one of enormous upheaval. The COVID-19 pandemic rapidly changed consumer behavior and preferences, and uncertainty and disruption have continued to be major features of the global economy ever since,” the report states. “The result, as recent McKinsey research indicates, may be a stalling of U.S. consumer confidence, with spending intentions down across several discretionary categories.”
Here’s a look at the report’s five main takeaways:
1. Quality, Price and Convenience Are The Top Purchasing Drivers
The macroeconomic environment, the impact of lingering food inflation and general uncertainty about the state of the world have made the quality, cost and convenience of food and beverage purchases paramount to consumers. While about one-third rank environmental factors as “very” or “somewhat important” purchasing drivers, the category falls well below those who said these leading three attributes.
McKinsey noted that this behavior is consistent with past survey results, but added that this doesn’t mean environmental impact doesn’t affect purchasing decisions at all. The firm looked at the topic through a wider lens back in 2023, in a joint study with NielsenIQ, and found that products with clear environmental, social and governance (ESG) claims grew 8% faster than those without between 2018 to 2023.
2. Interest Is High In Food Safety and Shelf Life, Low Concern About Packaging Appearance
Those same macrofactors from above are also contributing to the “non-negotiable” interest in both food safety and shelf life, which are associated with lower waste and “prevents additional costs,” and have remained leading purchasing drivers over the past five years, per the report.
In contrast, the number of consumers who rank environmental impact as “very important” fell 17%. Consumer interest in a packaging’s environmental impact has now returned to 2020 levels while the gap between this factor and the top five (food safety, shelf life, information included on the label, ease of use and durability) has widened.
The value for consumers in what is now the third most important factor – label information – has grown since the survey was last conducted in 2023 and reflects a rising interest in health and wellness, McKinsey claims. However, the report notes that the continued rise in online shopping has reduced the “salience of appearance in the purchasing decision.”
3. Recyclability Is The Most Important Eco Claim
Despite low recycling rates in the U.S. for popular materials such as polyethylene terephthalate (PET), consumers rank recyclability the top factor when it comes to packaging sustainability with 77% reporting they consider this attribute “extremely important” or “very important.”
As for other factors, recycled content, compostability, reusability, and the volume of material all fell within fairly equal ranges of importance while carbon and bio-based packaging claims were ranked the lowest importance, on average across categories.
“It may be that differing levels of consumer familiarity with these terms and concepts help explain these results; consumers may view recyclability and recycled content as solutions to familiar problems such as littering, pollution, and landfills, while they may be less familiar with the advantages of bio-based products,” the report states.
4. Glass- and Paper-based Packs Are Perceived As The Most Sustainable
While consumers may still struggle with nuances around recycled claims, they do seem to be clear on what substrates actually do get recycled, ranking glass, paper and metal as the most favorable packaging types. In contrast, liquid cartons and laminated packaging were largely viewed as unfavorable packaging materials since they are difficult to recycle.
“Consumers also seem to distinguish technical recyclability from actual recyclability,” the report claims. “For example, although PET can be closed-loop recycled, it is still viewed as relatively less sustainable than metal cans and glass bottles.”
5. Brand Owners and Packaging Producers Should Be Held Responsible
Seventy percent of consumers believe that brand owners and packaging manufacturers should be responsible for the sustainability of packaging materials, and only 10% said that the consumer should be responsible (i.e. voting with their wallet). However, McKinsey found that less than 10% of consumers were able to name a single packaging company. Despite that knowledge gap, the report emphasized that consumers feel these two groups have the most control to effect change when it comes to packaging.
