The pandemic forced plenty of businesses to start relying on home delivery to stay afloat. At the same time, it has never been easier to launch a digital business – just look at the number of active sellers on global online marketplace Etsy, a figure that jumped from 2.7 million in 2019 to 4.3 million in 2020. Online shopping has increasingly become a consumer's first port of call.
All of which results in more packaging – a lot more packaging. And the impact in terms of waste has been phenomenal. According to research by data analytics company Fastmarkets, online shopping results in seven times more cardboard than shopping from a physical retailer.
Packaging producers haven't been able to keep up. Cardboard shortages have been reported all around the world; in some cases, suppliers have had to turn away business, unable to keep up with demand.
It doesn't seem the demand for packaging will slow any time soon. China and the US are the two biggest producers of plastic waste, at 59 million tons and 38 million tons respectively; India has shown rapid growth as the national ecosystem for deliveries matures, with its online-retail market growing by 38.5% in 2020 alone; while, in the UK, the Royal Mail postal service delivered nearly 500 million packages in the final three months of 2020, a 30% increase over the same period in 2019.
The packaging industry is being squeezed from all sides as a dwindling supply of raw materials – which has resulted in a tripling of the price of corrugated cardboard – has combined with the urgent need to tackle consumer waste. This has an impact on the majority of businesses, big or small. But such businesses can do very little by themselves; they need to work hand in hand with packaging providers and designers to find a creative and cost-efficient way of dealing with the waste problem. So, when it comes to packaging trends, what's happening now and what's coming next?
Out of the box
Small-business owners don't have the time or the headspace to get deep into the weeds of packaging, says Ben Grant, co-founder of Grounded Packaging, a Sydney-based provider. He says that having a business partner in the space allows his firm to outsource some of that responsibility. For instance, Ben and his team at Grounded can provide their business customers with information based on their priorities, whether that's the recyclability of packaging or non-toxic printing techniques.
Grounded offers water-soluble bags, compostable bubble mailers and other means of alternative packaging. It makes good business sense: according to data from market insight firm Mordor Intelligence, the market for biodegradable plastic packaging is forecast to grow to $12.1 billion by 2025, up from $4.7 billion in 2019. Pioneers today include UK-based Panda Packaging, which uses coconut and bamboo in its products, while New Zealand firm Innocent Packaging produces food-and-drink packaging from bagasse, the leftover pulp from sugarcane.
The Magical Mushroom Company, meanwhile, combines fungal roots with waste hemp, corn and timber for its compostable packaging. It will soon open additional production plants in the UK, Bulgaria and Italy to meet demand.
This is an industry that depends on the right waste-management facilities, says Sean Hogan, who works at Noissue, which specializes in producing customized mailers, tissue paper and stickers for packaging. ‘We've seen challenges in certain geographies where composting facilities aren't as easily accessible,’ he says. ‘So, offering a recycled or recyclable option is something we consider.’
Some brands are toying with eliminating packaging altogether. There's a big logistical challenge here – businesses need to communicate to customers about how and why this process differs from the norm. Some businesses are offering credits to customers who return their used packaging, among them Good Goods, a New York-based wine company that offers people credit on their next purchase if they scan and bring back a used bottle. Others are taking on all the responsibility of returning and reusing packaging. Over the past two years, online shopping businesses Olive and Good Club, and packaging and shipping platform LimeLoop, have all started delivering goods to customers in returnable boxes, even picking up the reusable packaging themselves.
These logistical, operational and financial challenges mean that finding the right packaging partner is important. As a result, demand for the work of San Francisco-based packaging-design studio Guacamole Airplane, which was founded by Marisa Sanchez-Dunning and Ian Montgomery, skyrocketed during the pandemic. ‘So much of the wasteful packaging we see isn't the result of small budgets,’ says Marisa. ‘Instead, it's the result of bad planning; of scrambling to find a last-minute packaging solution without putting the thought and time into figuring out the right design solution.’
Beyond a single package
As the pressure mounts on brands to do something about their packaging waste, greenwashing is increasingly a concern. ‘In order to make an educated decision, you have to put a lot of time and effort into understanding the pros and cons of various materials,’ says Grounded Packaging's Ben Grant. ‘As a small business owner, you just don't have the capacity to do that.’
It can be overwhelming for a small business to know where to start, but Ben suggests thinking about the issues you feel most strongly about tackling, such as your carbon footprint, or reducing waste by building a circular supply chain. Packaging marketplaces like Lumi can demystify options: the Lumi ID is a QR code that provides information about materials and manufacturing, as well as disposal instructions. Others, including Noissue, are offering low minimum-order quantities to help small businesses shift to sustainable packaging in a way that won't break the bank.
Marisa encourages small businesses to play to their strengths. ‘Whereas a small business might not be able to invest in extensive material innovation or packaging solutions with expensive tooling costs, they generally have more nimble supply chains,’ she says. ‘This allows them to substitute in changes that would be cumbersome for massive organizations.’
This opacity in the packaging industry is what led Stora Enso, a leading renewable-packaging supplier, to start Box Inc, an online marketplace where small businesses can design, request and compare quotes from environmentally conscious suppliers. ‘Small businesses don't want to spend valuable time on finding a packaging solution,’ says Mikael Fristedt Westre, head of Box Inc. ‘Most of the people coming to us are actually founders and CEOs.’ Businesses are still largely making decisions based on what consumers are demanding, says Mikael, which isn't conducive to coming up with the most groundbreaking solution.
Like Stora Enso, larger packaging providers are exploring more eco-friendly options, which will help to shift the industry as a whole. This year, for example, Novolex, a packaging manufacturer in North America and Europe, acquired Vegware, a line of compostable food packaging.
Finland-based Huhtamaki, a company exploring circular and natural alternatives, acquired Elif, a Middle Eastern firm that repurposes consumer and industrial waste into flexible packaging. And packaging giants DS Smith and Idealpak are researching seaweed and sugarcane-based alternatives respectively, bending to pressure from both consumers and smaller innovators in the industry.
Retailers turn to refill
Physical retailers and stores have had to rely much more on deliveries and packaging during the pandemic than they would have otherwise. But some are going the extra mile to reduce their packaging impact by installing refill stations in their shops. However, it can be a challenge to convert consumers to using refill stations, as they need to remember to bring their own containers, which results in a very different consumer experience. Here are some examples of how some retailers have implemented refill stations around the world.
• Earlier this year, beauty retailer The Body Shop rolled out refill stations in 400 of its stores worldwide. To bring customers on board, the brand lowered the cost of refills compared with packaged products.
• In the Philippines, local convenience stores, known as sari-sari, are looking for ways to reduce their plastic waste. Wala Usik Tiangge offers refills of everything from laundry detergent to condiments.
• Unilever-owned haircare brand All Things Hair runs its own refilleries in three locations across Metro Manila in the Philippines. Every refill station also has a collection point for old plastic bottles and packets.
• Neighbourhood Botanicals, a UK-based skincare brand, is launching a business-to-business initiative called On Repeat, which will help other companies in the beauty space create their own bespoke refill solutions.
The more a business wants to customize its packaging, the higher the cost is going to be, according to Mikael Fristedt Westre of Box Inc. But, because of economies of scale, it's likely that if you order a large quantity of customized boxes, they'll end up being cheaper than a standard off-the-shelf solution. Here are some of the ways that businesses customize, differentiate and add value to their packaging.
Size. Reducing the size of packaging means you use less material and take up less warehouse space – and lower your costs, too.
Quality. You could consider upgrading from a standard brown board to a higher-quality white board, which is what plenty of high-value, luxury brands prefer to use.
Special features. Think of what can make your package different from a standard box, with features such as easy-opening, adhesive tape and resealable functionality.
Print. Prices will range depending on whether you decide to go for a single color or a fully fledged design both inside and outside the box. Printing on labels instead of directly onto the box can also be a less-expensive option.
2010 IKEA starts selling its Ektorp sofa as a disassembled product, reducing the packaging by 50%. As a result, the company used 7,477 fewer trucks for shipping and delivery every year.
2011 Woodly, a Helsinki-based tech startup, produces a new kind of plastic made entirely from wood cellulose. The material is currently certified as 40% to 60% bio-based, and the firm launched consumer-facing packaging in 2020.
2014 Clothing company Patagonia experiments with removing plastic from its packaging, only to find it leads to product damage. Paper bags aren't as effective as the team had hoped. Patagonia then looks into folding clothes into small shapes to reduce reliance on plastic poly bags.
2017 Tokyo-based paper maker Oji Holdings replaces bubble wrap in mailers with a paper-based honeycomb structure, which is robust and protects products during delivery. The company is awarded the patent in 2020.
2018 Consumer goods corporation Procter & Gamble introduces the Eco-Box, a sealed cardboard box that replaces plastic packaging for household products such as detergent. It reduces the need for plastic by 60% and uses 30% less water.
2019 Loop, an initiative by recycling firm TerraCycle, launches at the World Economic Forum in partnership with leading household goods brands to pioneer returnable packaging. It begins with local models in Paris and New York.
2020 UK-based sustainable-packaging firm Frugalpac launches the paper Frugal Bottle, five times lighter than a glass bottle, while Diageo and PepsiCo announce ambitions to develop paper bottles.
2021 A shortage of cardboard results in major packaging providers switching back to plastic packaging to meet consumer demand. Amazon announces that it is going to increase the recycled composition of its plastic film bags from 25% to 50%, and that of its plastic padded bags from 15% to more than 40%.