Sustainability Drives Competition Phil Davidson: HGS European Sustainability Manager
Agenda Introduction to HAVI Global Solutions Sustainability in Packaging: Future Insights Competitive Advantage Through Sustainable Forestry HAVI Global Solutions Confidential & Proprietary | 6/4/2015 | 2
HAVI Global Solutions Idea to End-of-Life Warehousing & End-of-life Planning / Design Sourcing Transportation Analytics Recovery HAVI Group HAVI Global Solutions Confidential & Proprietary | 6/4/2015 | 3
The Future of Packaging Future Insight Survey HGS-led programme of events leveraging a futurist thinking approach to envision likely outlooks for packaging, projecting a 10-year view of the industry and the influences most likely to affect it. Research output key to strategy moving forward. 4 | 6/4/2015 | HAVI Global Solutions Confidential & Proprietary
The Future of Packaging 107 42 Future Insight Survey Respondents In Europe Areas of Critical Issues Transparency Customization Opportunity Cost pressures, Technology Transparency Packaging sustainability, integration of throughout the value technologies that chain – including communicating the packaging with enable customization material health – will value of packaging, consumers, retailers, for consumers and and supply chain & value chain be a large risk area retailers will drive collaboration members, and the for packaging to developed market collection of address in the opportunities “big data”. upcoming decade 5 | 6/4/2015 | HAVI Global Solutions Confidential & Proprietary
22% 7% Brand Owner Academia 4% 36% 10% Other Raw Material Consultant Supplier 3% 5% Retailer Futurist 4% 10% Trade Converter Assn. • Data is largely influenced by consultant & brand owner perspective, though both interface with much of the value chain • Majority of consultants are packaging thought leaders with global roles HAVI Global Solutions Confidential & Proprietary | 6/4/2015 | 6
Top Opportunity Areas Sustainability continues to Sustainability / Sourcing stand out as top (General) opportunity area (as it did in 2010), with supply Supply Chain Collaboration chain collaboration (also largely sustainability Emerging Market Entry driven) moving up significantly from 2010, as does customization. Customization Emerging markets remain Authentication / Anti- growth engine. Counterfeit / Safety 0 20 40 60 # of Responses HAVI Global Solutions Confidential & Proprietary | 6/4/2015 | 7
Sustainability – Will It Be More Or Less Important In The Next Decade? Sustainability is expected to grow in More 78% importance – rated by ¾ of respondents – and will play an important role in emerging market Less 13% packaging. Indicates a need for clear sustainable packaging strategies and long-term Same 9% planning. 0% 20% 40% 60% 80% 100% % of Respondents HAVI Global Solutions Confidential & Proprietary | 6/4/2015 | 8
Top Science & Technology Developments For Packaging’s Future Active / Intelligent Pkg Sustainability elements are Renewably Sourced highlighted in 3 of the top 4 responses (and many of the other responses) — Recyclability / End of Life indicating a continued push for investment in Reduce Food Waste / Extend sustainability technologies Shelf Life Mobile Enables Tech *Note – open ended outside thought leaders only responded to this question. Respondents 0 10 20 30 40 asked for top 3 science and technology # of Respondents development areas. HAVI Global Solutions Confidential & Proprietary | 6/4/2015 | 9
Top Broad Issues / Challenges For Packaging In The Next Decade The top 4 issues / challenges are the exact Cost Pressures same 4 as in 2010 (just with cost replacing Sustainability / Sourcing sustainability at the top) Companies need to avoid thinking about cost Traceability / Safety pressures from a purely material cost standpoint Regulation and consider value that packaging brings to a Value Chain Collaboration brand / product 0 10 20 30 40 (Value = Benefits / Cost vs Competition) # of Respondents * Open-ended question. Respondent asked for top 3 issues. HAVI Global Solutions Confidential & Proprietary | 6/4/2015 | 10
Summary of Findings BIGGEST PACKAGING CHALLENGE Cost, sustainability, safety, BIGGEST PACKAGING and regulation OPPORTUNITY SUSTAINABILITY TOP AREA OF RISK TOP AREA OF RISK Material cost & resource Material cost & resource TRAINING FOR THE FUTURE TRAINING FOR THE FUTURE availability availability Good technical base, adapt to Good technical base, adapt to change, ask questions, and change, ask questions, and global knowledge global knowledge With sustainability as a top issue & opportunity, there is a clear need to define what that means for your organization HAVI Global Solutions Confidential & Proprietary | 6/4/2015 | 11
Strategic Level Sustainability Options For Fibre For Resin For Coatings • Implementation of Chain of • Progressively transitioning • Delivering renewable, Custody for all primary to renewable materials repulpable and compostable packaging products • Improve recycling, reduce • Demonstrating all fibre is waste and building brand sourced responsibly and trust sustainably End of Life HAVI Global Solutions Confidential & Proprietary | 6/4/2015 | 12
Competitive Advantage Through Sustainable Forestry
What Is Sustainable Forestry? Sustainable forest management, as a dynamic and evolving concept, aims to maintain and enhance the economic, social and environmental value of all types of forests, for the benefit of present and future generations” (UN, 2007) HAVI Global Solutions Confidential & Proprietary | 6/4/2015 | 14
Responsible Sourcing Of Forest Products • Forest certification – Ensures that the forest is managed to high standards covering social, environmental and economic issues. This results in certified fibre. • Chain of custody certification – Traces wood from those forests through all stages of processing and distribution to the customer HAVI Global Solutions Confidential & Proprietary | 6/4/2015 | 15
Forest Certification • A sustainable forest management certification scheme: – Requires compliance with the principles of legality, environmental and social sustainability – Is able to provide independent, third party verification that timber is sourced from sustainably managed forests – Includes mechanisms for tracing products from the forest of origin through the supply chain, to the end consumers called Chain of Custody (CoC) HAVI Global Solutions Confidential & Proprietary | 6/4/2015 | 16
Chain of Custody A Chain of Custody (CoC) management system should be designed to ensure that the product purchased, manufactured and supplied to the customer comes from a legal and sustainable source; this can be met by FSC and PEFC chain of custody certification HAVI Global Solutions Confidential & Proprietary | 6/4/2015 | 17
Chain of Custody Chain of Custody means: Demonstrating where raw material (paper) was purchased What happened to the raw material during processing To whom was the finished product sold How was the above recorded and documented HAVI Global Solutions Confidential & Proprietary | 6/4/2015 | 18
Benefits of Chain of Custody Increasing consumer demand for products from responsibly managed sources has increased interest in CoC certification. But what are the benefits: 2 fundamentals to protecting the brand Confidence 1 CoC certification permits businesses to be confident about the sourcing of their wood- based products; their customers can share this confidence. Risk Management 2 CoC certification includes a due diligence system to ensure exclusion of wood-based products from unknown, illegal or controversial sources. HAVI Global Solutions Confidential & Proprietary | 6/4/2015 | 19
Benefits of Chain of Custody That confidence then derives 3 additional benefits A clear and transparent message 3 Being able to include the FSC or PEFC logo on a product-line or marketing material communicates to the customer that products have been responsibly sourced. Competitive advantage 4 Offers companies access to markets demanding eco-friendly products and competitive advantage over companies with uncertified products. Business leadership on sustainability 5 CoC certification significantly enhances brand value by demonstrating a company’s commitment to sustainable business practices. HAVI Global Solutions Confidential & Proprietary | 6/4/2015 | 20
The Certification Schemes
Forest Stewardship Council (FSC) & Programme for the Endorsement of Forest Certification (PEFC) There are 16 million forest owners in Europe alone! HAVI Global Solutions Confidential & Proprietary | 6/4/2015 | 22
Forest Certification By Scheme In 2013 topped the 10% mark as a proportion of total forest area Source: UNECE Forest Products Market Review 2013 HAVI Global Solutions Confidential & Proprietary | 6/4/2015 | 23
CoC Certification By Scheme Relative growth rate of 11.8% Source: UNECE Forest Products Market Review 2013 HAVI Global Solutions Confidential & Proprietary | 6/4/2015 | 24
Implementation Approaches
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