With the stock markets down by almost a third since December of 2008, and credit markets tighter than a new boot, lenders are raising the bar for borrowers and turning away all but the best customers. In turn, the credit squeeze will force businesses and consumers to take a hatchet to spending. After more than a decade of red-hot economic growth fueled by easy credit, business is facing an unprecedented cooling down for the next two to five years that will dramatically change the demand for consumer packaged goods.
The good news is that downturn or not, packaging is always needed and greener packaging will be more important than ever. Consumers and businesses will be buying less, but they will be expecting more value from what they do buy. Retailers will be buying less too, but they will also be wary about the high risks associated with low costs. Brands and retailers will be likely to reduce the number of suppliers that they buy from. They also are likely to make investments that ensure the sustainability of the suppliers they consolidate to.
Increased regulatory, investor, and consumer pressure for transparency, accountability, and corporate responsibility will create new opportunities for packaging and converting firms that can walk the talk and quantify the impact of sustainability on the achievement of business results. This "green" is evergreen
Before you entertain the notion that green will turn to brown in the downturn, consider the following: Walmart has announced a major partnership with the Environmental Defense Fund at a global sustainability summit being held in Beijing that will raise environmental performance standards throughout its supply chain. WalMart's Green Supply Chain Initiative will include targets for the reduction of energy and water use, reductions in packaging (already in place with the scorecard), as well as commitments to develop more sustainable products and more sustainable supply chain practices.
The Walmart Green Supply Chain Initiative is aimed at working with individual suppliers on energy saving and other issues, and is expected to extend to other US and European retailers, covering another 20,000 factories. By 2012, WalMart will require suppliers to source 95% of their production from factories that receive the highest ratings in audits of environmental and social practices.
In addition to the Walmart Green Supply Chain Initiative, major brands and retailers will employ marketing automation systems to coordinate marketing, sales and promotion efforts across different media (including packaging, coupons and point of purchase promotion) to maximize the effectiveness of their advertising and marketing spend. They will also be employing product lifecycle and supply chain management systems that will help them address systemic risks associated with unsustainable packaging and supply chains.
If you think that sustainability is a passing fad and that green initiatives will fall by the wayside during the downturn, think again. If you take steps to make sustainability a key aspect of your day-to-day business practices, your company is less likely to be frozen out of the intense competition for business and credit that will prevail