Wal-Mart Stores Inc. launched its packaging score card Feb. 1, and a company official said the world's largest retailer will use its massive economies of scale to spur developments in sustainable packaging.
Wal-Mart executives and buyers will be able to compare packages and use the information to grade suppliers and make buying decisions, starting Feb. 1, 2008, said Amy Zettlemoyer, who is responsible for sustainable packaging at Wal-Mart. She also is packaging director for Sam's Club.
The goal is to reduce packaging across Wal-Mart's global supply chain by 5 percent by 2013. The impact will be huge, since Wal-Mart buys products from more than 60,000 suppliers in 70 countries.
Some suppliers could lose shelf space because of the score card.
``If after several years they don't improve their score, then they're probably not going to be able to compete in the future,'' Zettlemoyer said Feb. 26, in a keynote speech that opened Plastics News' 2007 Executive Forum. ``If they can't improve their packaging, they're not improving their product.''
On the other hand, she said Wal-Mart will promote suppliers who use green packaging. For example, one supplier feared losing valuable shelf space for its concentrated detergent, packaged in a smaller bottle that uses less plastic. But Sam's Club displays the product on aisle end-caps, a highly coveted position.
Zettlemoyer said Wal-Mart wants the score card to be a ``dynamic, changing'' document that drives new types of packaging. The company is becoming more open to trying new packaging approaches, such as removing extra layers of a package. One early victory came when a toy supplier reduced packaging from double-wall cardboard to single-wall.
``Very simply, let's take out what we don't really need. And, as a company, we're willing to test things, where before, when you shipped us something, it [had to] work,'' she said.
Wal-Mart will spend the next year gathering information from suppliers, including the type of packaging used, the material and quantity, and how far it's being transported from where the package is made to the product filling location.
Zettlemoyer said that, when possible, Wal-Mart will use existing third-party standards, such as ASTM guidelines for biodegradable and compostable plastics.
The retailer now is studying which third-party verification company to use to check claims by packaging suppliers.
Initially, Zettlemoyer said, about half the suppliers misrepresented their products when asked if the packaging met standards for being considered recyclable, recycled and compostable.
Asked her response by an audience member in San Diego, she drew laughs by saying, ``I gave them the benefit of the doubt, that they were just salespeople and didn't understand what they were truly selling.''
She also addressed polylactide resin, made from corn, as an example of renewable packaging. One challenge is that PLA needs to be placed in a municipal compost facility to biodegrade, and few such operations exist. Wal-Mart wants to work with government authorities to help set up more centers for composting, or possibly waste incineration.
``Where we still have to use polymers, we're going to continue to challenge our suppliers to use renewable resources, and also to design them to be biodegradable or compostable on the back end,'' Zettlemoyer said.
Wal-Mart sees plant-based resins as an insurance policy against see-sawing plastic resin prices.
``The goal here is that, we have the ability for price stability, so that if oil prices rise, we have other raw materials that we can balance out and use. It doesn't mean that we're planning on switching everything to PLA, but [we want] to have that flexibility to balance.''
So far, more than 2,000 suppliers have looked at the information. The packaging score card will be used by more than 1,000 Wal-Mart buyers.
When the score card goes live in 2008, executives will expect buyers to use it. If two products are exactly the same, but one has a better package, Wal-Mart probably will pick the item with the better package - or at least start asking for an explanation, she said.
But there are limits to how much more Wal-Mart is willing to spend on packaging. One audience member asked Zettlemoyer whether there is a contradiction between Wal-Mart's demand for green packaging, which usually is more expensive, and Wal-Mart's drive for ``everyday low prices.''
``Cost is still an issue [and] will be a focus,'' she said. ``We've taken, amazingly, a half a penny cost increase on one or two packages. And that's probably as far as the company's willing to go. But we are willing to work through things that cost more and make sure that, if it's just an economy of scale, we've got that leverage that we can help with.''
Wal-Mart's ``Sustainable Packaging Value Network'' has been meeting since mid-2005. Members include consumer products makers, packaging suppliers, government agencies, trade groups, nongovernmental organizations and environmentalists, including Environmental Defense and Greenpeace.
The packaging effort is part of a broader move by Wal-Mart to dramatically cut energy used for its stores, increase the fuel efficiency of its trucks and sell sustainable products that are more environmentally friendly.
Critics have put Wal-Mart on the defensive for labor issues, health care and impact on small, local stores.
But Wal-Mart's response to Hurricane Katrina in 2005 was a defining moment. The company rushed to deliver food, water and clothing to the victims and won widespread praise. Lee Scott, president and chief executive officer, called Katrina ``a key personal moment'' that convinced him Wal-Mart can use its clout to improve the world.
At the Executive Forum, Zettlemoyer talked about a number of other plastics-related topics, including:
* PVC packaging. ``It's currently not recycled in the United States. Whether or not it's recyclable is another question, and so we work with the National Recycling Coalition very closely and make sure that we're converting packages into things that can be recycled, or working with recyclers to increase the recycling of certain materials.'' For example, she said Wal-Mart is part of a recently formed Environmental Protection Agency group to drive polypropylene recycling.
While an early draft of the packaging score card seemed to discourage PVC packaging, Zettlemoyer acknowledged that the company is collecting data on all packaging materials to help make informed decisions on which are most sustainable.
* Wal-Mart is using returnable plastic containers to ship nearly all of its produce. ``We're looking at extending the use of RPCs into case-ready meat and some areas in the freezer/coolers for Sam's Club,'' she said.
* In response to a question, she said Wal-Mart currently does not plan to follow the lead of Swedish retailer IKEA, which will begin charging customers 5 cents per plastic bag to promote reusable bags. Wal-Mart will continue to offer bag recycling at its stores, she said.
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* Greenhouse gas emissions during production
* Ratio of product to package
* Recycled content
* Recovery value of the package material
* Amount of renewable energy used during package production
* Cube utilization, or the efficient use of space in pallets and shipping containers
* Injury rates under the Occupational Safety and Health Administration