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Wal-Mart suppliers on track to reduce packaging

By Ahmed ElAmin , 15-Mar-2007

Wal-Mart said this week that enough suppliers has signed on to its online "green" rating system, to keep the giant retailer on track toward achieving a five percent reduction in packaging by 2013.

The company's "substainable scorecard" system is a bid by the retailer to push up to 60,000 of its suppliers worldwide to lower the amount of packaging they use by five per cent, use more renewable materials and slash energy use.

 

 

 

The mandate from the world's largest retailer has forced food processors and other suppliers to look at alternative methods and materials in packaging their products.

 

 

 

Those that make efforts to change their packaging and products towards meeting Wal-Mart's goals will be ranked at the top of the pile among their competitors, making them the preferred supplier.

 

 

 

Those that do not, will face regulation to the lower ends of the ranking and the possible loss of their business with Wal-Mart.

 

 

 

Suppliers will move up or down the rank in their product category depending on any changes they make, or that their competitors make ahead of them.

 

 

 

In the first month, 2,268 vendors have logged on to the site and 117 products have been entered into the system, Wal-Mart stated.

 

 

 

Wal-Mart said it expects the numbers to dramatically increase in the coming year.

 

 

 

The ratings scorecard, which was officially unveiled in September 2006 and launched on February 1, evaluates Wal-Mart and Sam's Club suppliers on the sustainability of their packaging and offers suggestions for improvement.

 

 

 

Wal-Mart revealed the figures at its annual exposition on sustainable packaging, being held this week. This year, 130 packaging suppliers are showing nearly 3,000 product suppliers alternatives to traditional packaging, the company said.

 

 

 

Wal-Mart said it chose the suppliers based on their abilities to make packaging out of renewable resources such as corn or potatoes, reduce or replace expanded polystyrene, increase recycled content in materials and replace clamshells composed of non-recoverable materials.

 

 

 

The packaging suppliers will offer suggestions to vendors on how to improve their packaging. This year, Wal-Mart is using the scorecard to collect initial data from product suppliers.

 

 

 

Beginning in 2008, Wal-Mart buyers will be required to use the scorecard results to influence their purchasing decisions, if they want to stay as supplier..

 

 

 

Matt Kistler, a senior vice president at Sam's Club, said the company wants its vendors and suppliers integrate sustainable practices into their business plans and products.

 

 

 

"It's important to show that being an efficient and profitable business goes hand-in-hand with being a good steward of the environment," said Kistler.

 

 

 

The scorecard evaluates the sustainability of product packaging based on a number of factors.

 

 

 

These are greenhouse gas emissions related to production, material value, product to packaging ratio, cube utilization, recycled content usage, innovation, the amount of renewable energy used to manufacture the packaging, the recovery value of the raw materials and emissions related to transportation of the packaging materials.

 

 

 

The criteria allow suppliers to determine how their packaging innovations, environmental standards, energy efficiencies and use of materials compare to others in the same product category areas.

 

 

 

Suppliers will receive a score per package relative to their peers in each category.

 

 

 

The creation of the packaging rating system is a significant part of the bid by the retailer to become more environmentally-friendly and meet the demands of its customers.

 

 

 

Wal-Mart is selling the program to the suppliers, who will have no option but to comply, by citing costs savings. The giant retailer said it will save $3.4bn a year in costs if five per cent of packaging is cut out of the system.

 

 

 

The online system is available at www.scorecardlibrary.com. Packagers can test out the system built for them at www.marketgate.com/packaging.

 

 

 

The programme to cut five per cent out of its suppliers' packaging materials will stop millions of pounds of trash from reaching landfills and reduce the amount of carbon dioxide entering the atmosphere by 667,000 metric tons, Wal-Mart calculates.

 

 

 

In August this year Wal-Mart said it would begin using the Marine Stewardship Council's (MSC) independent blue eco-label on ten fish products. The label would help consumers to identify seafood from fisheries that meet the MSC's strict environmental standard.

 

 

 

In February 2006, Wal-Mart pledged to source all of its wild-caught fresh and frozen fish for the North American market from fisheries that meet the MSC's independent environmental standard. The first products arrived on Wal-Mart's shelves in April from Beaver Street Fisheries and AquaCuisine.

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