Retail PracticeReimagine, reuse, recycle: How to reach sustainable packaging targets in retailRetailers face costly packaging supply constraints, making it harder to contend with consumer and regulatory pressure to be more sustainable. Four actions can help.by Steve Hoffman, Alexandre Kleis, and Daniel RexhausenDecember 2023The next decade will be pivotal for achieving net-zero emissions by 2050. And with consumers and regulators likely to shift to more sustainable offerings and impose stricter environmental mandates, respectively, companies are feeling the pressure to reach their ambitious sustainability targets in the next several years. Retailers are no exception.One imperative for retailers is to make more of their packaging sustainable. By 2030, retailers with the boldest ambitions plan to increase their share of recycled content in packaging to 50 percent, reduce their virgin-plastic footprint by 50 percent, and move to 100 percent reusable, recyclable, or compostable materials in their private label range, where they have most control over outputs.But realizing these ambitious goals is far from easy. The demand for postconsumer recycled plastic packaging will increase threefold by 2030, in part because of retailers’ sustainability goals and increased regulatory targets—while the supply of such materials is only expected to double, according to a McKinsey analysis. Regulators around the globe are mandating a variety of compliance measures to curb the use of packaging, especially plastics. Consumers continue to demand that the brands they buy use sustainable packaging. At the same time, persistent inflation makes reducing costs a must-do.Last year, we recommended a set of actions that consumer goods companies could take to make their packaging more sustainable. This time, we’re turning our attention to retailers, whose margins are even slimmer, leaving them more vulnerable to the cost and supply hurdles on the horizon that threaten financial performance.Drawing on our work with leading global retailers, we have identified four bold, strategic actions that extend across the entire value chain and call for retail CEOs, chief sustainability officers, and chief procurement officers to reimagine their approach to sustainable packaging. It’s important to note that no single packaging type—plastic, glass, metal, cardboard, or paper—has every attribute of sustainable packaging. All these materials have benefits and costs, which vary based on their application, regional standards, and other factors.Overcoming the sustainable-packaging premiumOne of the biggest myths about—and obstacles for adoption of—sustainable packaging is that it is always more expensive for retailers to use when compared with less sustainable materials. But the reality is far more nuanced.Take plastics as an example: it’s true that if all retailers meet their sustainability pledges, t...
