Message from the CEO Congratulations to our high performing signatories, and in particular the twentytwo award winning signatories who achieved the highest result in their industry category in 2014.
The APC’s high performers are leading the way in packaging sustainability and innovation; they are a testament to the growing realisation that innovation and sustainability make good business sense, create opportunities for better employee and supply chain engagement, and can provide a competitive advantage. The APC is proud to acknowledge the work of these signatories and hopes that the broader APC signatory community will be able to benefit from their experience and achievements. The success of the APC relies heavily on the actions and performance of all our signatories in demonstrating their commitment to environmental sustainability. The APC is committed to continue working with and supporting business leaders to develop more sustainable packaging solutions, as we continue on our journey toward raising Australia’s packaging recycling rates, reducing packaging litter, and finding new ways to demonstrate product stewardship.
Stan Moore CEO
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How packaging innovations create business resilience and avenues for earnings growth The Australian Packaging Covenant’s 2014 award winners provide us with at least 22 reasons why business leaders are just as interested in packaging as other strategic opportunities. It’s because packaging systems focused on sustainability and innovation are part of a balanced approach to business success. In the cases summarised in this brochure, it can be seen that innovations in packaging sustainability can also led to improvements in areas including internal engagement, supply chain management and consumer experience. Award winners have strived to turn businessas-usual on its head, and demonstrated achievements aligned to the strategic innovation principles for a balanced approach to leadership [see Diagram 1]. At Murray Goulburn Co-Operative, a transformational change project based on operational excellence and innovation contributed to a raft of internal projects, leading to ongoing cost savings. Systematic rather than ad hoc innovation is the goal, and Coca-Cola Amatil has been on this journey for several years with its Innov8 program. It ensures structures are in place to encourage and respond to new ideas. Of the 142 ideas submitted in the sustainability category, 77 were actioned in the last reporting period.
Metcash has a team of Sustainability Champions who are empowered to investigate projects relating to environmental sustainability. The people chosen for this program are ‘leaders and multipliers’ who can influence and drive change. Veolia also has an internal network of Sustainability Champions that facilitate the sharing and distribution of knowledge across the company. Philip Morris empowers its employees to drive efficiency improvements through crossfunctional workgroups that meet every day to update each other on activities. Many award winners have embedded the Sustainability Packaging Guidelines into business-as-usual for new product development and review processes. Jurlique makes use of tools, such as PIQET, in its packaging assessments and product development cycle; a packaging review process helped Kathmandu identify an opportunity to remove swing tags from drink bottles by adding a barcode to the base of the item; Bundaberg Brewed Drinks has incorporated ‘blue sky thinking’ days with business partners into standard operating practice; and Blackmores adds efficiency to the idea generation process by prototyping several possible solutions in parallel. Fuji Xerox Australia has developed a closed loop system for one of its packaging lines - enabled by its Eco Manufacturing Centre in Rosehill. According to the company, this facility has produced an eleven-fold return on investment since the original site was established in 2000. As a global packaging manufacturer, Huhtamaki achieved PEFC Chain of Custody certification in 2013. Apart from helping to manage risk, the certification provides market differentiation. Fibrecycle’s cat litter is composed of more than 99% reused newspaper, its packaging is recyclable and uses vegetable based non-toxic inks, plus it carries FSC and PEFC certification. An upswing in sales prompted Chobani to review the packaging of incoming fruit deliveries switching to larger sized, reusable steel totes and away from non-recyclable foil bags.
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Australian Packaging Covenant - AWARDS NIGHT 2014
Diagram 1: Strategic Innovation Principles for Balanced Leadership An analysis of truly innovative and high performing companies shows that they rank highly in response to the following questions: FOCUS AREA QUESTION Leadership and People Innovation Process Innovation Action
Does the leadership of the organisation actively support innovation and innovators? Do all employees have permission and the confidence to innovate every day? Is there an accessible and disciplined process for generating, testing, implementing and capturing the value of an idea? Is risk managed proactively by allowing failure and learning from it? Is innovation an integral part of strategy and operations? Are there resources available and dedicated to innovation processes and actions? Is collaboration and knowledge sharing encouraged and facilitated?
Collaboration
Does the organisation actively seek out skills, external knowledge and connections to drive improvements?
Source: Hargraves Institute 2014 in collaboration with UTS Business School et al.
Nokia collects and collates a wide range of data to help it drive packaging improvements, supported by a strong sustainability culture and a global, cross-functional team structure. A portfolio assessment tool is employed by McDonald’s to establish a baseline and track the aggregate change across all packaging formats. McDonald’s global procurement partner is situated in-house and is deeply integrated in internal processes. This highlights a strong theme of engagement with stakeholders that is evident in all the award winners. For example, McGloin’s has ongoing dialogue with brand owners and suppliers, including those offshore, to improve the design and increased recyclability of packaging.
Birkenstock worked with their warehouse and logistics partner to re-use incoming cartons, and they’ve managed to re-use their light airfreight pallets in onward distribution. Bristol-Myers Squibb collaborated with logistics provider, DHL, to begin using a reusable cool pack for cold chain transportation, eliminating the consumption of disposable coolers.
Several companies have formalised their supply chain engagement process. Campbell Arnott’s conducts weekly and monthly ‘enabler’ meetings with supplier input to help identify continuous improvement opportunities; OfficeMax works closely with 40 key suppliers to discuss best practice and share information about packaging; and ASSA ABLOY has worked with a supplier on removing one layer of packaging in addition to separate shelf display boxes.
The summary of award winners provided in this brochure is a resource for business leaders, demonstrating the “how-to” of innovations that drive both environmental outcomes and earnings growth. To maximise leadership opportunity, it is intended to be a valuable learning resource for others considering new innovation.
CHEP worked with retailers to successfully convert cardboard-intensive processes to the d-pallet and beverage tray system. In 2013 alone, it has been estimated that 2.6 million cardboard boxes have been removed from the supply chain due to the conversion to the one touch merchandising packaging.
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Award Winners - Food and Beverage Small - Medium Food Company Winner: Chobani Pty Ltd When Chobani acquired Bead Foods in 2011, the company continued its packaging processes of Australian products in the United States to ensure speed to market and to give consumers faster access to the unique Chobani product. Following on from significant market place success in Australia, they are now localising that packaging supply which should be complete in 2015.
Large Food Company Winner: Campbell Arnott’s Australia
Yoghurt needs multi-barrier protection, and the right sizing of the product and packaging is an ongoing challenge, both in terms of meeting consumer demand and optimising pallet loads. Chobani has made use of social media channels to create an effective consumer engagement feedback mechanism, collecting a range of data that informs marketing decisions, including packaging.
At Campbell Arnott’s, Sustainable Packaging Guidelines have been systematically applied across the product range and a packaging questionnaire integrated into the new product development process. The packaging team have then gone a step further and created a modified user-friendly set of guidelines that focus on specific aspects of the business and, along with internal training, have helped engage internal stakeholders in sustainable packaging issues.
The company makes use of the BRC Global Standards for safety and quality certification and, in Australia, they have been adapted to include the Sustainable Packaging Guidelines. Internally, a new process for packaging changes has been put in place that requires sign off from a range of internal stakeholders, such as marketing, finance, logistics production, quality assurance, and the technical team.
The PIQET analysis tool was utilised when investigating a change from glass to plastic for its V8 juices – a change that led to a substantial investment in lightweight PET. The tool helped highlight lifecycle benefits, such as reduced CO2 emissions and increased transportation efficiencies. The result was an annual reduction of 3,000 tonnes of packaging and 5,000 pallets for finished goods.
Improvements in product stewardship contributed to this award. Of note was the introduction of pressurised and reusable stainless steel totes for incoming fruit deliveries to replace smaller non-recyclable laminated aluminium foil bags. The driver of this innovation was business growth – higher volumes required a new approach - and Chobani worked with the vendor to find a solution that would work onsite and meet sanitation requirements.
As a founding member of the APC-funded Red Cycle Program, leadership has been shown in the recovery of biscuit wrappers both onsite and in post-consumer spaces. In 2013, the partnership resulted in the diversion of 1.4 million units of Arnott’s packaging from landfill to alternative uses such as the manufacture of outdoor furniture.
Further collaboration with suppliers led to product configuration changes within the carton, increasing the number of units per pallet with flow-on benefits for transport and logistics costs. The company has explored biodegradable packaging in the past and found that there is confusion about its impact in the waste stream. Chobani is engaging with the APC to create industry-wide leadership and momentum.
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From a competency point of view, technical specialists have been employed at Chobani whose role it is to focus on packaging processes whereas in the past packaging suppliers drove this dialogue. This has enhanced Chobani’s ability to improve packaging sustainability and drive continuous change in the business.
Australian Packaging Covenant - AWARDS NIGHT 2014
From an innovation perspective, internal collaboration between packaging, procurement and waste management contractors has led to the establishment of data and benchmarking onsite recovery rates. Suppliers are given scope to outline solutions in tender processes, which has uncovered opportunities to increase recycled content. Formal weekly and monthly ‘enabler’ meetings are held with supplier input to identify optimisation, technology and other continuous improvement opportunities. For example, rationalising corrugated board grades has benefited both Campbell Arnott’s and its supplier.
Food and Beverage Small - Medium Beverage Company
Large Beverage Company
Winner: Bundaberg Brewed Drinks Pty Ltd
The Sustainable Packaging Guidelines (SPG) have become business as usual for Coca-Cola Amatil’s (CCAs) FutureWorks and new product development teams. These teams have embedded the SPG process to assist the normal management process.
At Bundaberg Brewed Drinks, a culture of collaboration across the supply chain, including packaging, is driving continuous improvement in the business. A shelf-stacking issue with its 375ml 6x4 cartons was raised by supermarket clients and formed the basis for a collaborative solution. Working initially with carton and wrap suppliers, and then with freight and supermarket players, a multi-functional perforated carton was designed to replace the existing packaging. The Sustainable Packaging Guidelines helped to define the dimensions of the problem and added robustness to the solution. From a materiality perspective, the 375ml-bottled products represent more than half of sales. A similar process was employed to produce new packing configurations for its 10 and 12 packs. Innovations in recycling have also helped drive improvements. Metal drums received from other suppliers have been re-purposed as storage containers for dehydrated ginger; and sending used pallets to a local CHEP depot for inspection prior to onward freighting has reduced the return rate from customers. In terms of stewardship, ‘blue sky thinking’ days are held regularly with business partners. Various suppliers have been brought together to ideate, and as a result the company is trialling the design of a lighter glass bottle that retains structural integrity. Bundaberg also visit other supplier sites in order to listen to concerns and constraints and gain ideas for process improvement. Insight into the cap manufacturing process has led to a solution for a cap tearing problem and better sealing performance. It also provides an opportunity to benchmark and align suppliers’ sustainability practices to theirs.
Winner: Coca-Cola Amatil Limited
Several innovations were rolled out during the reporting period, including light weighting opportunities associated with ‘blowfill’ PET and subsequent conversion to a ‘hotfill’ process. This led to a 27% reduction in resin and was complemented by foil seal elimination in product caps. In bottled water, lighter closures saved 14% of HDPE. CCA’s Supplier of the Year program provides recognition for innovation in the supply chain and fosters collaborative relationships. Innovation is further assisted by CCA’s national Innov8 program, enabling everyone in the organisation to present ideas in a workable and structured process. Sustainability is one of the six innovation areas and 77 of 142 initiatives submitted in this category were implemented. A survey on recycled content in packaging materials has helped CCA fulfil its Action Plan commitments, with suppliers Visy and Amcor reporting high rates of recycled content. To drive energy and water efficiency improvements, CCA monitors these inputs on a per fluid beverage litre basis. As a founding member of the Australian Food and Grocery Council’s Packaging Stewardship Forum, CCA has created a range of collaboration opportunities in this forum and beyond. The company has also engaged customers in dialogue and action on recycling initiatives.
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Retailers Retailer
QSR
Winner: Metcash Trading Limited Australasia
Winner: McDonald’s Australia Limited
Metcash’s diverse range of product lines results in an equally diverse range of packaging needs. Packaging has risen on the management agenda due to a business imperative to reduce costs, improve customer experience and maintain a solid commitment to health and safety. In 2013, Metcash appointed the Sustainability Champions program, an internal initiative born out of a desire to learn about activities from the ground up across all the different business units. The champions are described as ‘leaders and multipliers’ who take on extra responsibilities and are empowered to investigate national and local projects relating to environmental sustainability. They are employees nominated by the executive team who demonstrate a passion for the business or leadership skills. The Sustainability Champions communicate broadly and organise teams to work on initiatives identified from within the business. Metcash has found this program to be more effective than their previously trialed Green Teams, because the people chosen are better placed to influence change in the organisation. Metcash delivered six projects in the last reporting year that impacted the distribution of waste generated and its disposal- significantly reducing landfill. The company has also reviewed a high percentage of new and existing products in the grocery business for recycled content. This was made possible through the design of a simpler form for suppliers which enabled higher quality conversations about packaging with these suppliers. In addition, Metcash donates food that is unsellable due to packaging imperfections to Foodbank, helping to feed Australians in need.
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Australian Packaging Covenant - AWARDS NIGHT 2014
McDonald’s utilises internal ‘tools’ to review new packaging formats, to ensure consistency with corporate values and sustainability goals. A portfolio assessment tool provides a baseline measure encompassing all packaging formats in the business. A number of on-site recovery initiatives were implemented in the reporting period, including recycling bulk outer cardboard, working with a waste contactor on a food waste trial, converting cooking oil into biodiesel and also pallet wrap recovery. One of the major challenges McDonald’s faces in achieving progress in this area is the large number of waste contractors currently engaged, which has led to a strategy of moving to state-based contracts. At the global level, McDonald’s is working on consistent definitions of landfill diversion and associated reporting requirements. A materials ‘hierarchy’ helps guide its packaging purchasing practices, taking into account factors such as recyclability, weight, certification, health, market infrastructure, and end-of-life options. During the reporting period, McDonald’s achieved its target of 100% of fibre for consumer packaging sourced from recycled or responsible virgin sources. In the supply chain, McDonald’s has a strong relationship with its global procurement partner, HAVI Global Solutions (HGS), whose staff are based in their head office and have become integrated in product development processes. HGS has helped in the development of an Australia and New Zealand packaging strategy that focuses on sustainable sourcing, risk management and portfolio improvement. McDonald’s actively helps its suppliers with their own certification journeys and hosts collaborative forums to communicate its APC Action Plan and enable best-practice sharing where practical.
Pharmacy and Personal Care Small Pharmacy and Personal Care
Medium Pharmacy and Personal Care
Winner: McGloins Pty Ltd
Winner: Jurlique International Pty Ltd
McGloins is a distributor of products to more than 4,000 pharmacies in Australia. Many of the products it distributes are owned and manufactured by third parties and influencing product design can be a challenge.
Jurlique’s skincare range boasts organic and biodynamic ingredients, which means that its customers are likely to be part of the demographic that expects and values a responsible approach to packaging and sustainability practices.
The company recently set up a cross-functional team to take responsibility for the design and implementation of its APC Action Plan and has modified business processes to ensure that the Sustainable Packaging Guidelines are applied in a business-as-usual way.
Contributing to their success is the inclusion of packaging considerations at the start of the product development cycle. A training program has been developed and updated to ensure the marketing team and designers clearly understand the Sustainable Packaging Guidelines.
A step forward involved conducting an in-house waste audit for the purpose of establishing baseline data to identify opportunities to improve packaging and recycling rates. A system is in place for used packaging to be collected by recycling contractors and timber pallets are returned for recycling, used for storage or utilised in onward stock movement. McGloins has an ongoing dialogue with brand owners and suppliers, including those offshore, to improve the design and increase the recyclability of packaging.
Several policies, processes and tools are utilised in packaging- including PIQET for packaging assessments, a procurement policy embedded in vendor management processes and supplier questionnaires and scorecards.
For one of its products, a vaporiser, McGloins established a return and reconditioning process. The used items are either reconditioned and used as demonstration models or disassembled for component re-use. Another product stewardship initiative saw it introduce QR codes on packaging to reduce printed materials.
The development of a seven-year roadmap for sustainable packaging transition sets targets for recycled components in each material type such as plastic bottles, HDPE tubing, pumps, and cartons. The Sustainable Packaging Guidelines and PIQET life cycle assessment tool were utilised in setting these targets. Quarterly meetings with their three main packaging suppliers foster collaboration and give suppliers an opportunity to preview new developments, and for Jurlique to outline its upcoming requirements. In terms of internal collaboration and implementation, a cross functional team with representatives from six key areas meets regularly to review data and reporting. Overall, Jurlique demonstrates commitment to APC requirements by making use of various tools and actively collaborating with supply chain members to identify ongoing improvements.
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Pharmacy and Personal Care Medium Pharmacy and Personal Care
Large Pharmacy and Personal Care
Winner: Blackmores Limited
Winner: Bristol-Myers Squibb Australia Pty Ltd
As one of Australia’s leading natural health brands, Blackmores seeks to “improve people’s lives” and their focus on sustainability can be traced back more than 80 years. At approximately 15% of production costs, packaging is an important consideration for Blackmores. Using the frameworks, processes and guidelines provided by the APC, Blackmores has delivered upon a major initiative to transform bulk deliveries of packaging components from suppliers and associated in-house processing by reducing excess packaging. It came with the extra challenge that re-usable tertiary packaging had to routinely go through a validated cleaning regime to ensure compliance with the responsibilities of good manufacturing practice under the directives of the Therapeutic Goods Administration. The new “Closed Loop” process drew on insights from employees as well as suppliers, and gave staff an opportunity to observe the broader way the business operates, gathering ideas and mapping out an ideal future to work towards. Brainstorming sessions and prototyping several possible solutions in parallel took place before a final solution was agreed. This initiative was rolled out across both Blackmores and their suppliers facility and is expected to significantly reduce plastic and cardboard waste. From a financial return perspective – the money spent on investigating and implementing the process is likely to be recovered in just over a year after its introduction. A general environment of innovation and collaboration at Blackmores has paid off in terms of packaging waste and sustainability, improvements to the bottom line, staff productivity and work health and safety. The next step is to improve primary consumer packaging with several projects well under way.
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Australian Packaging Covenant - AWARDS NIGHT 2014
Bristol-Myers Squibb (BMS) is a diversified specialty biopharma company with a longstanding commitment to reduce the environmental impacts of its products throughout their life cycle from design through manufacturing, distribution and use. BMS has mapped its own packaging design guidance to the APC’s Sustainable Packaging Guidelines to ensure consistency. BMS’s APC team is a ‘virtual’ team of local and global representatives covering packaging reviews at offshore manufacturing points and tertiary packaging with a local focus on cold-chain products. BMS Australia collaborated with logistics provider, DHL, to reduce packaging for medicines which must be transported within a controlled temperature range of +2 to +8C. The initial solution, re-usable coolers, achieved annualised packaging savings materials of more than 87 tonnes and 565 cubic metres of landfill. Recent innovation enables BMS – and other companies with cold chain supply needs – to utilise DHL Cool Green Cells. Reducing costs and landfill drove this innovation with product stewardship an added benefit. Globally, the packaging team reviewed secondary and tertiary packaging of existing products prioritising those with higher tonnage. As a result, one of the two projects implemented in the reporting period is on track to save 830 tonnes of packaging annually. Another local initiative tackled the packaging of sample medicines. These are supplied to doctors to test a new approach to patient treatment. BMS Australia reflected on feedback from its sales representatives about large boxes and space filler. Working with DHL, the boxes were instead wrapped around the packets, reducing volumes by 148 cubic metres and cardboard by 65%.
Hardware and Homewares Small Hardware and Homewares
Medium Hardware and Homewares
Winner: Fibrecycle Pty Ltd
Winner: ASSA ABLOY Australia Pty Ltd
Fibrecycle began as a processor of paper and cardboard for paper mills, and then developed technology to convert old newspapers (ONP) into absorbency products for domestic use. Today, it is the leading manufacturer of a cat litter product that is composed of more than 99% reused newspaper.
Packaging sustainability as well as fulfilling the requirements of the APC is a point of differentiation for ASSA ABLOY in the homeware and hardware industry.
The basis for competition within cat litter varieties is primarily on price, odour control, and dust tracking. Anecdotally, the reused nature of Fibrecycle’s product and the ability to use it as a surface mulch after use is popular with consumers and retailers. ONP is a globally traded commodity sourced mainly from specialist suppliers. About 5% comes from community organisations such as scout and church groups. Their packaging is sourced from an Italian based supplier and is PEFC and FSC certified. It is recyclable, being made from renewable materials and vegetable based non-toxic inks. By working with logistics provider, Woolworths Primary Freight, transportation efficiencies have been generated, with larger and less frequent pickups reducing handling and transport costs. The company puts this example of continuous improvement down to the strong relationship and responsiveness of its partner. An internal innovation for feeding in bales of ONP has eliminated contamination at one of its sites. The process is currently being patented. Although the company is small relative to many other award winners, with 44 people employed in Australia, size hasn’t been a barrier to supply chain collaboration and innovative outcomes.
In 2013, ASSA ABLOY updated their new product gateway process and incorporated the Sustainable Packaging Guidelines as a mandatory element. This means that environmental issues relating to the product packaging are part of business as usual. This change to the process has started packaging conversations earlier on in the process, enabling and encouraging the teams to look wider and find alternatives when needed. Design of primary packaging is a collaborative activity within the company. Packaging engineers, product management and purchasing teams are key collaborators from the beginning. Locally based suppliers are also involved. A recent successful initiative was “Shelf Ready” product packaging, resulting in the consolidation of packaging elements. Working with their supplier, ASSA ABLOY coordinated a new packaging system, removing one layer of packaging in addition to separate shelf display boxes. At the point of purchase this initiative resulted in packaging material reductions and easier stock handling for the customer. The supplier also benefited through decreased costs in labeling and transport, and also in increased productivity. To succeed in implementing this change, ASSA ABLOY gained insight into the supplier process via photographs rather than onsite visits and used the APC guidelines to start the conversation with their supplier. A key factor behind this success was the communication of the Economies of Scale benefits to the supplier, both in the short and long term.
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Hardware and Homewares Large Hardware and Homewares Winner: OfficeMax Australia Ltd OfficeMax interacts with a large number of manufacturers both within Australia and overseas. Their focus on the environmental impact of packaging has become a commercial driver for the business. In the last year OfficeMax has demonstrated a strong focus on the design and review of processes supporting the Sustainable Packaging Guidelines. This has resulted in short term benefits, such as the use of icons on packaging encouraging correct disposal, as well as long term ones such as increased capability in the area of responsible packaging for large tenders. OfficeMax won the FSC Retailer of the Year in 2013 for the third year in a row. Their commitment to the use of recycled content products is demonstrated in their recent announcement of the Eco range of office products - office writing instruments and notebooks made from recycled PET bottles. The Eco range is to be launched in early 2014 in conjunction with the Toner Reuse Program where their toners – that already consist of 90% recycled parts - are further collected and recycled. Office Max has extended their pledge to sustainability by committing to move from paper to digital catalogues. OfficeMax attributes successful implementation of policies, processes and new products to their internal and external collaborations. Their “Connect” program involves 40 key suppliers and, as a group, they discuss best practices and share information about packaging and environmental performance. The forum is extended to a Connect Council meeting every quarter. The in-house APC team meets monthly and includes representation from across the business, such as manufacturing and administration. Having this structure in place has resulted in the implementation of new ideas and engaged employees in packaging initiatives.
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Australian Packaging Covenant - AWARDS NIGHT 2014
Communications and Electronics Small-Medium Communications and Electronics Winner: Fuji Xerox Australia Pty Limited Fuji Xerox has a strong ethos of sustainable packaging and this award reflects leadership shown in taking on challenges. Packaging innovations are part of the business optimisation process at Fuji Xerox Australia. An online audit tool was built specifically for the reporting requirements of the APC, which has made information available to all staff involved in the packaging process. The company has been working with their suppliers- also members of the APC- with the same requirement to improve the level of data integration and to help identify new sources of innovation. Upon joining the APC in 2009, Fuji Xerox’s initial focus was on consumer products (paper) and assessing suppliers’ products. It has since moved its focus on to B2B products, such as multifunction printing devices, and the Eco Manufacturing Centre (EMC), where packaging guidelines have become an innovation tool.
Another project – Project Refresh – was formed due to falling margins in the printing equipment market and higher handling costs. The first win in this initiative was the halving of cardboard packaging for their multifunction device side trays and annual cost savings of $57,155, along with carbon emission, volume and raw materials savings. For on-site waste, business processes have been linked with environmental software. Recycling has been measured at 90% in the reporting period. The collection and integration of data, such as waste volumes and 15 different recycle streams, has helped improve management practices and reduce compliance burdens. For example, treated pallets from China were previously going to landfill and this process led to them being recycled into chipboard to be used in furniture. The business has undergone significant change and now outsources most of its logistics functions. In the process, it requires that providers achieve and maintain the ISO 14001 standard at locations involving Fuji Xerox goods.
Fuji Xerox actively seeks out its own parts, consumables and sub-assembly products for recycling or for remanufacture and re-use by customers. This is performed at the EMC in Rosehill, Sydney. During the year it collaborated with the APC to examine a closed loop system for one of its packaging lines. The analysis included a time and productivity component to ensure that the labour aspects of the process are easily carried out and cost effective. Since the opening of the original EMC in the year 2000 it has returned approximately 11 times its original $22 million investment, making a compelling business case for the initiative. A visit to the site is part of the employee induction process and reinforces the sustainability culture. The EMC building has recently achieved a 5 star Green Star rating under the Office Interiors tool.
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Communications and Electronics Large Communications and Electronics Winner: Nokia Australia Pty Ltd The collection and collation of data to help inform and drive decision-making is one thing that stands out when reviewing Nokia’s approach to packaging sustainability. This is attributable to the company’s strong sustainability culture and a head office team based in Finland that facilitates data processes. While its global packaging guidelines conform to a raft of environment standards that are consistent with the Sustainable Packaging Guidelines, the key to implementing its policies lies in the effectiveness of its cross-functional support and working teams. Nokia’s global structure requires design, sustainability, marketing and logistics to work together towards common goals. Large gains have been made in overall use of recycled materials, such as plastics used for packaging now have up to 90% recycled contents and 69% of retail packaging is now made from recycled wood fibres. Whilst eliminating the use of virgin fibres is desirable, Nokia has found that sourcing a small portion of FSC and/or PEFC accredited local virgin fibres from locations where recycled wood fibres are not available has a lower environmental impact compared to importing recycled materials over long distance. Modularity considerations of the product package resulted in the use of a standard ‘master carton’ which then allows different products to be shipped in the same pallet. This resulted in 25% more products that could be shipped per pallet. Nokia is in a position where the low-hanging fruit has been harvested and further large gains will be harder to generate. It is now turning its focus towards the usage of more sustainable materials in its packaging. Leadership in product stewardship is evident globally, and locally, via its foundation support of the MobileMuster Program, a prominent mobile phone industry take-back scheme.
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Australian Packaging Covenant - AWARDS NIGHT 2014
Clothing, Footwear and Fashion Small Clothing, Footwear and Fashion Winner: Birkenstock Australia Pty Ltd As a private family company with German heritage, Birkenstock has a strong commitment to sustainability that is valued by its target market. It is currently enjoying an upswing in demand for its footwear products. All primary and most of its secondary packaging originates from Germany and contains the maximum amount of recycled content, whilst retaining an acceptable level of packaging strength. Working with a new warehouse has improved packaging and recycling outcomes, with incoming cartons being re-used and shortfalls met with recycled content product. Their logistics partner has also been able to re-use the lightweight presswood pallets that airfreight incoming goods in onward distribution. Birkenstock has eliminated the use of disposable bags in its own stores, replacing them with calico bags at cost price. Consumers are increasingly taking shoes away in the box without a bag. Rapid growth in online sales has presented a packaging challenge because plastic satchels are used for order fulfilment. The company is seeking out a reusable solution aligned to the values of Birkenstock’s brand and is drawing on the creativity of its own employees in that process.
Clothing, Footwear and Fashion Large Clothing, Footwear and Fashion Winner: Kathmandu Pty Ltd Kathmandu’s consistently high scores across all KPIs helped it take out the clothing, footwear and fashion category award. Although it only joined the APC fairly recently, Kathmandu’s APC Action Plan has become the catalyst for design, recycling and stewardship outcomes. The impetus for change came from the establishment of a cross-divisional packaging committee. Before that, packaging was the realm of the design process. Across the stakeholders within the business, many felt strongly about packaging, however it hadn’t always been framed in the right language. For example, linking packaging with freight optimisation was key to engaging the logistics team. Collecting data and improving management information systems has also been high on Kathmandu’s agenda. They found that cardboard usage was high and layers were sometimes redundant in certain product lines such as camping tables. Apart from appealing to the efficiency imperative of the logistics team, reduced packaging also simplifies the process for store managers and appeals to the merchandising team from a visual perspective. Their cross-divisional committee was an important element in bringing these ideas together where they may have previously gone undiscovered. Attention to APC commitments led to a new footwear box design with 97.5% less ink usage and a 17% decrease in packaging materials. The Sustainability and Community manager at Kathmandu describes its association with the APC as providing a new lens through which to drive innovation. The theme of unnecessary packaging arose in a review of its 40 styles of drink bottles. More than 250,000 swing tags were being added for the main purpose of including a bar code.
Adding the bar code on the base of the bottle eliminated the need for swing tags - a feature that is likely to be rolled out to other products. The Design team’s pursuit of data about its swing tags helped drive this outcome and highlights a departure from business-as-usual. Collaboration with suppliers was evident in a review of a staple store item, thermals. Whilst Kathmandu would ultimately like to eliminate boxes for these items, an interim step of obtaining FSC certification and using soy-based inks was put in place for 100% of packaging. After finding a supplier of FSC-certified cardboard in China, they were faced with another challenge: the FSC Chain of Custody certification required every part of the supply chain to be accredited in order to promote it on packaging. The raw material was covered, however the die-cutting and printing process was not. The supplier was encouraged to obtain certification on the basis that it would help differentiate and boost their business, and it was achieved within six months. From an on-site perspective, a waste management and recycling audit was performed on the entire network, uncovering not only gaps in recycling capabilities but also significant opportunities for cost reductions. In some extreme cases, stores were unable to take deliveries through their back entrance because of piled up cardboard. The audit has led to the optimisation of waste in the network and bottom line improvements. Kathmandu works very closely with other outdoor brands through industry bodies such as the Outdoor Industry Association and Sustainable Apparel Coalition. In fact, they have put several of their internal innovations down to shared experiences and insights gained from those forums. At the retail counter, plastic bags have been eliminated from stores. Customers are charged a small fee for FSC certified paper bags with the proceeds directed towards its community partners. Kathmandu is a good case study of higher standards in driving innovation in its business and its social agenda of sustainable packaging driving productivity outcomes.
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Packaging Manufacturer Small - Medium Packaging Manufacturer
Large Packaging Manufacturer
Winner: CHEP Australia Pty Ltd
Huhtamaki is a Finland-based company that manufacturers a range of consumer and specialty packaging products. It has expertise in foodservice packaging, molded fiber packaging, flexible packaging and films.
CHEP pallets are well embedded in the supply chain of many commercial processes and the company believes in being proactive in sustainability issues, including packaging. Policies are integrated in the business with the Sustainable Packaging Guidelines adapted and applied in their Stage Gate process. A major innovation since last year has been a new version of the display and beverage tray system - effectively creating the store display at the bottling plant. It is estimated to have removed 2.6 million cardboard boxes from the supply chain. Developed in conjunction with manufacturers and retailers, the smaller size of the pallets and their structure means that they can be stacked to increase transport volumes. Benefits are numerous in terms of waste reduction, decreased handling and lower transportation emissions. A target of achieving a 100% FSC Chain of Custody certification for timber purchased for pooled pallets is likely to be achieved earlier than planned. CHEP has worked upstream with its suppliers, providing financial and technical support, to achieve their own individual certifications in this process. The company sees it as a risk mitigation strategy; certification being one of the best ways to highlight its credentials to stakeholders. CHEP is prepared to invest in longer-term product stewardship strategies. A NSW Government program sees it working with neighbouring industries to explore the use of waste timber as an input for biochar production. The project looks promising, however the timeframe is realistically five years plus.
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Australian Packaging Covenant - AWARDS NIGHT 2014
Winner: Huhtamaki Australia Pty Limited
It has a group environment framework that covers most aspects of the Sustainable Packaging Guidelines, and sustainable design is incorporated into all new product development. For example, a new egg carton design has been developed using this process and will be launched in 2014. Huhtamaki’s Foodservice unit has purchased all carton from recycled material and 90% of its paper board is sourced from PEFC Chain of Custody certified suppliers. In terms of onsite recovery, Huhtamaki has achieved paper and plastics recycling rates in excess of 90%. Its Molded Fiber unit achieved full recycling of packaging materials and a 5% reduction in landfill in the reporting period and further progress has been made since. As a supplier to brand owners, a key engagement activity undertaken by the company is participation in trade events. It has also invested in new technology and presented a number of light-weighting options to its customers, such as its improved hot cup product. Huhtamaki’s Foodservice unit achieved PEFC Chain of Custody certification during 2013, and its Windsor site has developed procedures that help it in managing various elements of this process.
Recovery and Recycling Recovery and Recycling Winner: Veolia Environmental Services (Australia) Pty Ltd As a waste, water and energy solutions business, Veolia’s focus is on working with clients to provide practical options relevant to their businesses. Examples of Veolia’s waste recovery efforts include a closed loop waste recovery solution for KFC, working with the Southern Sydney Regional Organisation of Councils to treat residual household waste and to recover both recyclable and compostable waste, and the implementation of a groundbreaking landfill to kiln process that turns waste to energy which is then used to make bricks. These solutions not only satisfy the need to recycle and divert waste – they are cost effective and in some cases offer up savings for the businesses involved. Veolia’s business is bolstered by its Sustainability Champions – an internal network of professionals that distribute knowledge and drive projects across the business. Veolia recognises that, as a global business, visibility of shared problems can encourage innovation and drive new sustainability projects and solutions. The Sustainability Champions are supported by Green Teams to assist in the implementation of internal efficiency projects. Internal engagement around sustainability is also supported through their intranet, a quarterly publication, and the company’s Sustainability Project Innovation award. Veolia also aligns internal campaigns with community projects. The key to Veolia’s success in innovative waste solutions is its worldwide investment in research and development and its ability to then distribute knowledge within the company and to its clients.
Transport, Fuel and Tobacco Transport, Fuel and Tobacco Winner: Philip Morris Limited Packaging at Philip Morris (PML) demands a lot of attention due to the required level of compliance, and the influence of external factors that not only affect packaging design but also the ability to recycle and re-use. As a result, the company took a different approach to innovation and sustainability in 2013 with respect to its APC commitments with a deliberate focus on product stewardship and recycling initiatives. Many of the company’s suppliers are overseas. A partnership with one key supplier involved an on-site presence at Philip Morris to form a better understanding of business needs and how they can work together. Other external collaboration activities include working with their national waste contractor to identify and maximise opportunities for recycling and re-using nonquarantine items. Internally, the business empowers its employees to drive efficiency improvements. Crossfunctional workgroups meet daily to update each other on activities and talk about ideas for improvements. The internal recovery and recycling of waste is a key focus of these groups and they are empowered to drive change from within, supported by management. From an external perspective, ongoing relationships with federal agencies such as the Department of Agriculture has helped with the evaluation of stakeholder perspectives and collaborative problem solving. TerraCycle approached PML in 2013 to address the recycling of cigarette butts and litter reduction. TerraCycle’s traditional model of working exclusively with one company within any region was not going to reap benefits for all parties, so looking at the big picture, PML partnered with industry peers to form a tobacco industry product stewardship group.
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Most Improved Most Improved Winner: Murray Goulburn Co-Operative Co Limited To win the title of Most Improved, Murray Goulburn Co-Operative Co. Limited achieved significantly higher scores across the board than in their previous submission, especially in product stewardship outcomes. Whilst continuous improvement played a role, a transformational change project based on the two pillars of operational excellence and innovation, enabled many of these outcomes. The Co-Operative fosters idea generation sessions and has introduced structures to ensure the right ‘wiring’ exists in the organisation. Overall these sessions deliver sustained benefits by embedding activities into people’s daily routines. Because of the nature of its products, packaging can be a substantial cost component and therefore a potential for value adding or cost savings. The Co-operative has used a simple value/ease matrix to prioritise and resource 24 ideas that have delivered significant benefits during the reporting period. From a policy perspective, three key documents provide a strong and coordinated approach to meeting APC goals and KPIs, pertaining to company-wide procurement, a master supply agreement with specific clauses relating to APC commitments, and the use of a sustainable procurement questionnaire that triggers the use of the Sustainable Packaging Guidelines (SPG). Suppliers have been supportive of the commitment to more sustainable packaging.
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Australian Packaging Covenant - AWARDS NIGHT 2014
A new steering committee was formed in order to take a more targeted approach to APC requirements, formally checking in on challenges and opportunities relevant to the environmental, packaging and procurement teams. It has shifted the role that the APC requirements play in the Cooperative’s operations from a compliance activity to a source of continuous improvement. New products developed since March 2013 have been assessed against the SPG and the review process is embedded in their online workflow tool. Baseline data for on-site waste and recyclable packaging is inconsistently recorded across different sites, and so Murray Goulburn is in the process of partnering with a waste service provider to improve data and become a catalyst for cost-reduction opportunities. Furthermore, the company engaged with Sustainability Victoria to confirm best practice in waste management before entering into the tender process. Packaging suppliers are well placed to introduce the latest ideas in new packaging formats and improvements. Drawing on strong relationships with packaging suppliers has led to positive commercial outcomes such as with a key supplier of UHT packaging resulting in FSC certification and a closed loop UHT paper waste solution. The closed loop solution resulted in significant reduction in landfill paper waste.
Contact APC Postal Address
GPO Box 4216 Sydney NSW 2001
Head Office
Suite 1205, 3 Spring St Sydney NSW 2000
Phone
02 8249 4080
apc@packagingcovenant.org.au
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AUSTRALIAN PACKAGING COVENANT AWARDS NIGHT CLARENDON ROOM Melbourne Convention and Exhibition Centre. 1 Convention Centre Pl. South Wharf VIC 3006
ESTABLISHMENT Level 3, 252 George Street Sydney NSW 2000
6PM Tuesday 15 July 2014
6PM Wednesday 23 July 2014
This work is copyright. Apart from any use permitted under the Copyright Act 1968, no part may be reproduced without written permission of the Australian Packaging Covenant. Requests and enquiries concerning reproduction and rights should be directed to the Chief Executive Officer, Australian Packaging Covenant, GPO Box 4216 Sydney NSW 2001, or via apc@packagingcovenant.org.au Š Australian Packaging Covenant 2014