A Greener Footprint

Wednesday, March 30th, 2022

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Global supermarkets and brands are looking to reduce their packaging footprint. What will be the impact on the label and packaging industry?

Contributed by Mike Fairley, Founder of Labels & Labeling.

The food and beverage sectors dominate the usage of labels worldwide, with the leading global supermarket groups and major brands having a significant influence on the packaging and label purchasing trends.

This dominance has meant that supermarkets have built-up an almost unprecedented economic, purchasing and political power in the food and beverage sector, as well as a having a growing responsibility in promoting and demonstrating a high degree of corporate social responsibility.

A recent report highlighted that a third of global food sales were made by the world’s 10 largest supermarket chains. Another study found that food and beverage applications together accounted for about 30 percent of all global label demand, while the supermarket groups identified by Labels & Labeling Consultancy in the highlighted table – with more than 200,000 stores or retail outlets between them are believed to represent more than half of global retail sales in a market estimated to be in excess of $US26 trillion.

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Another recent study points out that by 2027 the food and beverage end-use sectors are expected to hold more than 55 percent of the global label market share. One important consequence of such supermarket domination, especially in the food sector, has been the steady and continuous growth in supermarket in-house brand foods, which are actually owned by the supermarket retailer, wholesaler or distributor and are exclusively sold in their own retail outlets.

Consequently, the leading supermarket groups have a key role in not only selling the products but also in their manufacture including the detailed specification of the packaging and labels, the sourcing of packaging and label materials, and the supermarket and supplier relationship. In certain areas the supermarket groups have even come together with a common aim: improving sustainable sourcing of raw materials.

Reduce, Reuse, Recycle, Renew

Many of the leading supermarket groups assess their packaging and labels against the 4R Guidelines (Reduce, Reuse, Recycle, Renew), both working to reduce packaging and increase the recyclability of their packaging (and label) materials. A key aim is to make packaging recycling easier for customers. For example, Carrefour aims for 100 percent recyclable, reusable or compostable packaging for its own brands by 2025.

A further company focusing on a 4R strategy is Tesco, a near $US90 billion supermarket chain with around 7,000 stores in 12 countries that has been prioritising the ongoing removal of unnecessary packaging and working with suppliers and partners to reduce, reuse and recycle packaging. Its commitments include the removal of plastic packaging where it can, and introducing a scalable reusable packaging offer for customers.

Many of the supermarket groups, such as Lidl with some 11,000 stores in 32 countries, have also set ambitious carbon reduction targets and are looking to work collaboratively with their suppliers to establish their own climate targets and strategic plans for the next five years or more. Aldi too, with stores in 20 countries, has stated that it is continually working to reduce the amount of plastic and packaging that it uses, and to ensure that the materials it does use are easy for customers to recycle.

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As the world’s largest retailer in terms of sales, with over $US500 billion in revenue annually, Walmart is working with US private brand label and packaging suppliers to achieve 100 recyclable, reusable or industrially compostable packaging for its private brand packaging by 2025. It is also targeting at least 20 percent post-consumer recycled content in private brand packaging by 2025.

With the focus of the circular economy on reducing, reusing and recycling, Spar’s drive to redesign packaging has gained increased importance. Indeed, across Spar’s 13,500 stores in some 48 countries, its partners are working to ensure unnecessary packaging and non-recyclable materials are removed from Spar own-brand products wherever possible. Key considerations are to ensure reduced CO 2 emissions at the production phase and reduced energy consumption during recycling processes.