Supply Chain

Packaging

Have you ever noticed that after taking an item out of its package you are sometimes left with more packaging than product? We noticed, and as we’ve worked to become a more sustainable business, we have identified packaging as one of the most effective places to begin to make changes. By focusing on the way that our products are packaged, we can take some initial steps in achieving our long-term sustainability goals.

To help us get there, we have set some global packaging benchmarks that will help gauge our progress. They include:

  • Creating a closed loop on packaging where we ultimately become a raw material supplier to packaging manufacturers;
  • Reducing packaging 5 percent by 2013;
  • Becoming packaging neutral by 2025; and
  • Replacing PVC (polyvinyl chloride) in Private Brand packaging.

Perhaps the most transformative of these goals focuses on closed-loop packaging. To meet this goal, we need to work with more than 60,000 suppliers to reduce the size of packaging and drive the use of renewable and recyclable materials that can be used to make future packages. By recycling rather than sending packaging to a landfill, we aim to profitably close the loop on packaging.

In retail, products vary wildly, but packaging generally remains consistent across geographic borders, which enables our Packaging SVN to have truly global goals and a truly global impact. The Packaging SVN is comprised of approximately 200 representatives from such areas as government, non-governmental organizations (NGOs), academia and industry. One of the most exciting results of this global collaboration is the Packaging Scorecard.

The Packaging Scorecard was officially announced at the Clinton Global Initiative in September 2006. It was then launched to Private Brand suppliers on November 1, 2006, and unveiled to all suppliers on February 1, 2007. The scorecard evaluates our suppliers around the world on the sustainability of their packaging and rates them relative to their competitors. In the first month, more than 2,000 vendors logged onto the site and more than 100 products were entered into the system. On February 1, 2008, our buyers will begin using the scorecard results to inform their purchasing decisions.

To help us reach our PVC goal, the Packaging SVN will develop a standard for PVC in packages. We anticipate that by the third quarter of 2008, we will be able to use the scorecard to determine how many products will continue to be packaged in PVC and take steps to eliminate it from Private Brand packages.

We are also working to engage our suppliers through packaging fairs. In March 2007, we hosted the second Sustainable Packaging Exposition. At the exposition, approximately 130 packaging suppliers showcased nearly 3,000 packaging alternatives made out of renewable resources such as corn or potatoes. These sustainable materials can reduce or replace expanded polystyrene, increase recycled content in materials and replace clamshells composed of non-recoverable materials.

As we move forward, we need to expand our vision of the role we can – and should – be playing in packaging. There is always room to do more and better. The sheer number of suppliers interested in this area requires more time and staff to educate these suppliers about our approach to packaging – and it is an investment we need to consider. In addition, it’s difficult to track progress if suppliers are resistant to using scorecards, so we need to work with them to help them understand how scorecards can add value to their own businesses. We have only just begun to reach our potential in this area. Capturing the rest of the opportunities will lead to no less than a total transformation of our business.

Wal-Mart Video Center

Partnering with Suppliers to Reduce Packaging

In 2005, we partnered with Unilever to dramatically reduce the packaging on its All® detergent. In February 2006, Unilever unveiled All Small-and-Mighty®, an innovative product that is three times as concentrated as regular detergent and contains enough product to wash 32 loads of laundry – the same as a 100-ounce bottle. Unilever expects yearly savings of 864,000 gallons of diesel fuel, 6 million pounds of plastic and 50 million square feet of cardboard. Consistent with its sustainability mission, P&G has also announced that it will convert its entire portfolio of liquid laundry detergents to a "2X" concentrated formula.

If we reach our goal of reducing packaging by 5 percent, we will not only prevent millions of pounds of trash from reaching landfills, we also project that we will save 667,000 metric tons of carbon dioxide from entering the atmosphere. This is equal to taking 213,000 trucks off the road per year, and saving 323,800 tons of coal and 66.7 million gallons of diesel fuel from being burned. If just 10 percent of the retail industry adopts this initiative, we expect net savings of $10.98 billion. Additionally, the Wal-Mart supply chain alone is poised to save an estimated $3.4 billion.