The PackIt Fresh team has been busy mining its grocer partner data over the past couple weeks. We’re seeking to quantify the answer to a single question: what kind of savings is the PackIt Fresh mobile refrigeration solution delivering to its current grocery partners? Given the broad impact PackIt Fresh freezable totes can have on the final mile of online grocery order delivery, the question is not a simple one to answer. We decided it best to tackle that single question from a few different angles, beginning with the pick and pack side of the business.
– Quentin Kluthe, CEO
The mission of the pick and pack, seems simple on its face. Don’t a few billion people across the globe shop for their own groceries every week? Walking the aisles with a cart or basket, opening refrigerator doors, pausing to examine produce, double-checking an expiration date, discovering a desired item is out-of-stock and finding a replacement, and soon rolling their groceries through the checkout line and on home. Sure, there are a few moments that rely on subjectivity or good commonsense, but those potential barriers are nowhere near insurmountable.
The seemingly simple task becomes exponentially more complex when order pickers are tasked with fulfilling multiple online orders at once. Picking and packing in a timely enough fashion to keep refrigerated and frozen items at or near temperature and precious produce unharmed has proven pretty labor intensive and that labor cost has added up quickly for grocers over the past few years. Layer onto that, the time it takes to then get these orders to their respective delivery addresses or into a refrigerated staging area for customer pick-up and minutes quickly become hours.
This is where the finance guy in me gets excited. PackIt Fresh totes eliminate the need for pickers to ferry items to and from three different temperature zones: ambient, refrigerated and frozen. The totes also enable one-loop pick-routing, meaning items are touched only once. Time case-studies show that pick-and-pack labor is reduced by at least 15%, enabling significant cost/order savings and higher throughput and revenues.
Higher throughput from existing store staff enables fulfillment of more online orders. Costs going down while margins go up means the return on the PackIt Fresh mobile refrigeration solution starts with the very first online order filled.
The PackIt Fresh benefits don’t stop with labor savings. Melissa and Todd will share more details on capital expenditure savings, the advantages of longer delivery routes, and good ol’ fashioned customer satisfaction in the coming weeks.
We encourage you to go to our Shop page to find the tote that works best for your business.
As always, let us know what you think or if you have questions.
]]>When the PackIt Fresh Innovations team commenced development on our commercial refrigeration system for online grocery order fulfillment back in 2018, we were eager to bring innovation to a then nascent yet estimated $20 Billion marketplace. That figure represented roughly 2.5% of the then $1 Trillion food and beverage retail market. Our team was excited about this new market opportunity and felt confident that our proven track record of innovation in direct-to-consumer, on-the-go cooling technologies could be leveled up and modified to meet the growing demands of a commercial enterprise.
– Melissa Kieling, President and Founder
Not unlike the impetus for our core PackIt line of products 13 years ago, the inspiration for PackIt Fresh started in my home. This time, identifying a need combined with a desire to “do it better” started in my garage instead of on my kitchen counter. As a busy mom, I was unpacking meals from online food delivery services at least once per week and the water bottles, ice-packs, plastic bags and corrugated boxes were piling up. I couldn’t help but wonder where all of this packaging would end up. This time, there simply had to be a better way.
The advent of online grocery ordering excited all of us right out of the gate. It really felt like a no-brainer to us. After a decade of developing our expertise in thermal engineering, and the development of new patented PackIt technologies in thermal performance it was obvious that we could revolutionize the way the grocery industry thinks about cold chain. Even more exciting was expanding our relationships with retail. Many of our PackIt grocer partners took us behind-the-scenes and shared their pain-points as they scrambled to meet increasing online orders. This resulted in numerous brainstorm sessions. It was staggering for all of us to see how the streamlining of their final mile fulfillment processes would result in mind-blowing cost-savings. Put simply, the customizable, collapsible, reusable design we now know as the PackIt Fresh EcoFreeze refrigeration system delivers efficiencies that ultimately result in profitability. New partners will see that our standard sizing options are compatible with many of their existing, in store carts and bins. With direct insights from warehouse and store workers, we achieved our goal of being a cost-effective plug-in solution for any online grocery order fulfillment strategy.
As we commence 2022, we are very much looking forward to rolling out across even more retail locations for our new and existing partners. In addition, we are seeing PackIt Fresh on the back of more bikes as more and more zero-emission, “instant” food delivery services like URB-E choose our EcoFreeze totes.
As market demands continue to grow and evolve, we’re now eager to serve a market that’s expected to reach nearly $150 Billion or 10% of the food and beverage retail market. PackIt and PackIt Fresh will continue to innovate to deliver fresh and cold every time.
]]>The PackIt leadership team closed 2021 with some fresh insights on the growing need for grocers to introduce efficiencies and scalability into the burgeoning online grocery orders marketplace. While meeting these two objectives is critical to every retailer’s success, their deep commitments to the planet are becoming an increasingly pressing matter.
– Todd Tingley, VP of Strategic Partnerships
More and more retailers are doubling down on their shared mission to protect our global environment. Meaningful action from major chains such as Kroger and WalMart are already serving to reduce waste along the product chain, as well as decarbonize day-to-day operations. The PackIt Fresh refrigeration solution is part and parcel of this mission.
PackIt was founded on a basic principle: keep food fresh and eliminate waste. For more than a decade, our innovative food storage designs have helped families across the globe decrease their carbon footprint. While we were proud of our market-leading sustainability position, we knew we could do even more for the environment and on a far greater scale. Enter PackIt Fresh.
Like our PackIt line of cooler bags and containers, the innovative PackIt Fresh refrigeration system is solution-based and serves a massive (and growing) market: online grocery order fulfillment. Patented EcoFreeze Technology is built into the walls of every reusable PackIt Fresh tote. Groceries are picked from store and warehouse shelves directly into the PackIt Fresh tote for online order pickup or delivery. EcoFreeze technology keeps perishables cold and food-safe for 15 hours.
PackIt Fresh totes also collapse to freeze overnight. Our partners have told us that the fifteen-hour food-safe temperatures our EcoFreeze totes deliver has led to a huge increase in hourly order fulfillment operations.
Now, ineffective frozen water bottles, ice-packs, plastic bags and corrugated boxes can be a thing of the past. Suddenly, retailers’ goals of transitioning to low-impact refrigerants for cooling in their stores, clubs, and distribution centers is possible. Their sustainability goals are well within reach.
As important as it is, PackIt’s commitment to conservation is simply part of the company’s DNA. I’m extremely proud to know our innovations are poised to advance many of our partners’ key business objectives in 2022 and beyond.
Later this week, our President and Founder Melissa Kieling will share more on PackIt’s history and the future of PackIt and PackIt Fresh.
]]>Grocers across the globe stretched to manage a 5X year-over-year increase in online orders in 2020. Part of this growth was fueled by customers’ need to navigate store closures during the global pandemic. Fast forward to the end of 2021 and the continued growth we are seeing in online orders is increasingly about convenience. Tens of millions of U.S. households now know first-hand that ordering their groceries online for pickup or delivery can free up several hours in their busy weeks! Retail experts universally view online grocery shopping as a growing lifestyle phenomenon.
– Melissa Kieling, President & Founder
The explosive growth in online grocery orders had grocers scrambling. Acquiring the customer and meeting customer demand quickly became a top priority. Finding a way to do it in a profitable way had to come later. Grocers deferred to what they knew: building out new, refrigerated staging areas and acquiring fleets of refrigerated delivery trucks. These efforts required major capital investments for retailers large and small and have resulted in unforeseen inefficiencies.
We designed the patented PackIt Fresh EcoFreeze™ refrigeration system with an understanding that the grocery industry needs to continue to be nimble and responsive given the pace at which online ordering is growing and changing. Grocers must be able to modify their various order fulfillment strategies, often times requiring a plug-in to their existing strategies. This calls for customization and scalability. PackIt Fresh EcoFreeze™ totes can be implemented quickly and at a low cost to retailers. Lower cost fulfillment means better margins on every order. Plus because PackIt Fresh EcoFreeze™ totes are, reusable, and collapsible, retailers can scale their refrigerated storage and order fulfillment capacity in a measured, strategic way.
Image: Jesse Brothers, Sioux City Journal
In 2021, we saw our PackIt Fresh EcoFreeze™ totes in daily use at national and regional retailers and even local bodegas. It didn’t take long for a retailer to asses all of the efficiencies created with the use of our products. Prior to using PackIt Fresh EcoFreeze™ totes, our customers shuffled picked orders around in the back of their stores to get items into multiple, temperature-controlled locations. This proved to be completely inefficient. In addition, the risk of storing an order in more than one location often resulted in handing over an incomplete order to the customer. Picking orders directly into our temperature-safe totes and staging the entire order together means order items are touched once, reducing order staging and de-staging time by as much as 40% and greatly improving order accuracy to the customer. Simply said, we are helping retailers get more orders out every hour. With our major retail partners fulfilling online orders at a rate of 50 to 500 per day, that’s significant labor cost savings.
Across the board, our partners are reporting a reduction in overall online order fulfillment costs, an increase in revenue from online orders and improved customer satisfaction. We are thrilled to report that after initial tests, our national and regional chain store partners have been expanding their PackIt Fresh EcoFreeze™ tote use to all retail locations, as well as multiple of their order fulfillment strategies. PackIt Fresh is helping stores meet at-home delivery order needs, as well as the increasing number of online orders for customer pick-up at the store.
While the initial boom in online grocery orders may have taken retailers by surprise, PackIt Fresh has now delivered a scalable refrigeration system to support its continued growth. Retailers are now equipped to build much needed efficiencies into the final mile of online grocery orders. Good news for online grocery shoppers and retailers alike!
Stay tuned for PackIt Fresh Vice President of Sales Todd Tingley’s update on the PackIt Fresh commitment to FOOD SAFETY and SUSTAINABILITY.
]]>Online grocery ordering experienced another record year in 2021 and PackIt Fresh EcoFreeze™ totes were there! We rolled out pilot programs inside major grocery chains, as well as smaller retail operations both here in the U.S. and abroad. As we look ahead to 2022, a few members of the team and I thought it would be a good idea to share our perspectives on what these use cases have taught us and can teach our current and future PackIt Fresh partners. We’re planning to share a series of blog posts in the coming weeks. We hope you can find the time to read and share your own perspectives as we work together to increase efficiencies, sustainability and food safety in online grocery ordering. Let’s do this!
– Quentin Kluthe, CEO
Conservative estimates put today’s online grocery orders at $100B annually with growth targets of more than $200B by 2024. That is a massive volume of orders being fulfilled for store-pick-up and at-home delivery.
Our 2021 customer programs provided an intimate look at the role our PackIt Fresh EcoFreeze totes play through every step of online grocery order fulfillment. Our EcoFreeze totes aren’t simply a means of transporting perishables from the store to the customer at home – they serve as a refrigerated pick-and-pack AND storage solution, too. Many of our PackIt Fresh partners effectively utilize our totes as a portable, scalable refrigerator inside their stores, warehouses and fulfillment centers.
Because our patented EcoFreeze technology maintains the industry food-safe temperature of 41˚ F for up to 15 hours, they have this flexibility. This helps eliminate the capital expenses required to build out and run large, refrigerated staging areas to keep orders at temperature. That 15-hour, food-safe technology also helps eliminate the purchase of fleets of expensive refrigerator trucks that have been very difficult to secure of late.
Our partners are also reporting that orders are being fulfilled faster, saving them in labor costs while increasing the volume of orders they’re fulfilling every hour. These efficiencies have been very important to them this past year when staff was hard to hire. Pick-lap times are decreasing while order accuracy and overall quality are increasing. Holding an entire order together means far less risk of forgetting an item or even an entire bag when it comes time to deliver to the customer at home.
In short, the take-ways from our 2021 programs have been extremely validating. Reduced labor costs, reduced travel costs and reduced space costs are being further offset by increased order capacity. The PackIt Fresh refrigeration system is delivering on its promise to create EFFICIENCIES through every step of online grocery order fulfillment.
Stay tuned for PackIt and PackIt Fresh Founder and President Melissa Kieling’s update on the different ways PackIt’s Fresh is being integrated into retailers existing fulfillment and delivery strategies. CUSTOMIZATION and SCALABILITY are key!
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Whether you’re working in a warehouse, store or micro-fulfillment center, and whether you’re prepping orders for click-and-connect, curbside pickup or delivery somewhere else, one thing does not change: Cold items need to be kept cold. But the moment a perishable is picked from its cooler, the cold chain is broken.
PackIt Fresh EcoFreeze™ Totes changes that equation, providing a mobile, refrigerated environment for up to 15 hours. The totes freeze overnight and maintain food-safe temperatures from cooler to curb, throughout fulfillment and distribution.
In an economy where demand is exceeding both supply and labor, streamlining the picking-and-packing process can mean the difference between accepting and rejecting orders — and profit. PackIt Fresh totes enable order and batch-order consolidation — reducing time and touch points and letting retailers get more orders out per hour, thereby satisfying customers and improving their bottom line.
PackIt Fresh freezable totes are with product pickers every step of the way. Workers pick and pack directly into the frozen tote, so the cold chain is never broken. They then bring the totes to any staging area — with no additional refrigeration needed, which means no expensive cooling systems or build-outs are needed either.
A worker or even a robot can pack items of any and every temperature into a PackIt Fresh frozen tote, where the entire order stays for the remainder of its journey. That may be to a staging area and the curb, that may be from a warehouse to a store, or in the case of a micro-fulfillment center or warehouse, that may mean it transfers to multiple locations’ staging areas and numerous trucks on its way to its final destination, be it store, locker or customer. All the while, the mobile refrigerated tote goes along for the ride, keeping products at food-safe temperatures. The totes are ideal for protecting precious perishables for hub-and-spoke models and long-haul routes with multiple stops, such as from a micro-fulfilment center, to a distribution center or store, to a happy customer.
At six to seven cents per use, PackIt Fresh also lets you scale refrigeration quickly, cheaply and easily. Seasonal surges no longer necessitate big investments in overhead that won’t be used the rest of the year. Planning for a fourth-of-July barbecue rush? You can build another walk-in freezer, rent some refrigerated trucks — or just put some more totes in your freezer. PackIt Fresh totes give retailers the ability to scale quickly — literally overnight — simply by freezing more totes. The totes collapse and store flat in compact and convenient racks, always standing by for your next surge in demand.
PackIt Fresh fully freezable totes change cold-chain picking and packing from an inefficient and expensive exercise to a productive, cost-effective process that streamlines fulfillment across applications.
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Retailers’ inability to keep perishables at food-safe temperatures from the minute they’re pulled from a temperature-controlled environment to when they’re collected by or delivered to customers results in a very inefficient and expensive cold last mile. Building refrigerated staging areas, buying and using refrigerated trucks (if you can find them), executing pick-and-pack workarounds when you’re dealing with multi-temperature foods — none of it is cheap or easy.
What if we could solve for refrigeration in a nimble, cost-effective, mobile way? What if, from the moment perishables are picked to the moment they are received by the customer, there were an easy way to control for the crazy-expensive refrigeration portion of the equation?
Well, we did, and there is.
PackIt Fresh EcoFreeze™ Totes are the mobile refrigeration solution to the final-mile cold-chain problem. From cooler to curb, PackIt’s freezable delivery totes keep perishables in a cold, food-safe environment for up to 15 hours. They maintain food-safe temperatures throughout fulfillment and distribution, ensuring the cold chain is never broken.
Consolidated order staging
With mobile refrigeration, retailers can pick and pack items of any temperature at the same time, into the same container. Currently, many retailers employ a pick-and-pack system that looks something like this:
That process takes a ton of time and has an awful lot of touch points. With PackIt Fresh freezable totes, the worker takes the refrigeration with them, placing items from all three temperatures directly into the frozen totes. Then they carry the full order to the back of the store and leave it in any ambient staging environment — no refrigerated staging area is necessary.
When the customer or transporter arrives to pick up the order, the worker doesn’t have to tun to three different areas to pull the various parts of the order. Time and touch points are reduced by consolidating and staging picked orders into what is, basically, a one-step process. The entire order is sitting in your (non-refrigerated) staging area, where it can be quickly and easily handed over to the customer or delivery driver.
Improved order accuracy
The practice of a full order being picked directly into one refrigerated bag is also a game-changer when it comes to getting your customers’ orders right. The exercise of pickers packing into multiple containers left in multiple locations just begs for mistakes to happen.
“Every error despatched from your warehouse has an impact on profitability,” writes Bryan Goodall, a storage-solutions sales manager in Australia. “Studies show that the average industry picking error rate is between 1% and 3%. While this sounds like a pretty good rate, it’s not until you look at the full cost of picking errors in your warehouse and understand the average cost per error is anywhere from $50 to $300 dollars or an 11%–13% drain on profitability.”
With a full order in one bag from pick to pickup, order accuracy — and profit — increases.
Batched orders
The same principle applies with batched orders. Without the need to pick items from different temperatures separately, the efficient process of batched orders becomes even more efficient. Workers can pick all the orders in a batch directly into individual frozen bags. No need to sort into separate orders later, no running back and forth to store refrigerated or frozen goods. By carrying the refrigeration with them, workers can pick more orders at once, saving both time and money.
Longer delivery routes, more deliveries per driver
For oh so many reasons, we want to eliminate the use of expensive, environmentally unfriendly refrigerated trucks. But if your truck is not refrigerated, you’re left with a van with no refrigeration, which necessitates shorter routes with fewer deliveries to ensure your customer’s milk isn’t spoiled when they receive it.
Mobile frozen totes let drivers do longer routes with more deliveries per route, bringing the cost per drop way down. You can send a driver out for several hours on an efficient loop route, where they can drop off six to eight orders. At the end of that route, they loop back to the retailer and drop off the totes to be refrozen again for the next day.
Improved customer experience
What customer is happy finding melted ice cream at their door? Keeping your customers’ perishables at the right temperature from the moment they’re picked ensures customers receive accurate, complete, fresh food orders. Since the orders can be packed in the retailers’ own bags right inside the refrigerated tote, handoff is quick, easy — and branded. The driver hands over the bag and brings back the tote to be refrozen.
Additionally, for membership or subscription programs, including meal-kit deliveries, drivers can even leave the PackIt tote with the customer and pick it up during the next delivery. You’d be surprised how excited customers get when they find a special silver tote waiting on their doorstep.
At six to seven cents per use, PackIt Fresh freezable totes decrease the cost and increase the efficiencies of final-mile deliveries, all while ensuring the cold chain is never broken.
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The sustainability issue in last-mile delivery has finally been solved! URB-E and PackIt Fresh freezable totes, on bikes, are now providing delivery of fresh, cold food with zero emissions!
URB-E announced its choice of PackIt Fresh as its preferred final-mile refrigeration provider on June 1, 2021. When you pair PackIt Fresh innovative, reusable, freezable totes with URB-E’s containers, you get a zero-emission, low-congestion, low-cost replacement for refrigerated trucks and vans that can save companies hundreds of thousands of dollars per year and up to 11 metric tons of CO2 per vehicle.
Now, perishables can be kept at food-safe temperatures for up to 24 hours without the need for added ice packs, dry ice or active cooling. This is a boon for food and grocery delivery providers looking to reduce expenses in an industry with notoriously narrow margins, plus it meets the sustainability demands of consumers.
“With the increase in online sales resulting from the pandemic, we saw a way to provide an ecofriendly solution to deliver cold goods using a service that is able to move food and other temperature-sensitive products. This made URB-E a natural partner for PackIt Fresh to help safely deliver perishable items and save the environment from emissions and cooling trucks and vans,” says Melissa Kieling, CEO of PackIt Fresh.
“We know the final mile of the supply chain is the most expensive, and because our totes keep groceries cold, URB-E now can use longer routes with more deliveries per route, bringing down the cost per delivery. PackIt Fresh puts profit back into the delivery of perishable items.”
]]>Like so many people these days, I love the convenience of having meal kits and groceries delivered to my home. But when a trash heap filled with cardboard boxes, gel packs and insulation began to accumulate in my garage, I started thinking about how many food deliveries are made during any given week in America. And it scared me.
It also opened my eyes to the environmental cost and impact of the ever-expanding food-delivery industry. Hello Fresh, the largest meal-kit delivery company in the U.S., delivered 63 million meal kits in the second quarter of 2020. That’s one company in one quarter.
The meal-kit delivery service market is expected to reach nearly $20 billion by 2027, a compound growth rate of nearly 13%, according to Grand View Research. It makes me feel guilty thinking about how much cardboard and plastic packaging waste will be produced as this sector continues to grow.
Recycling isn’t enough, and it isn’t the answer
Many well-meaning grocery and meal-kit delivery companies tout their eco-friendliness by saying they use recyclable materials. That’s nice, but only a fraction of recyclable materials ever actually get recycled. According to the Environmental Protection Agency, the total amount of municipal solid waste — various items consumers throw away after they are used — in the United States in 2018 was 292.4 million tons. Of that, approximately 69 million tons were recycled.
I did the math: Less than a quarter of the trash we produce is being recycled. The vast majority of single-use packaging materials wind up in a landfill: Supply Chain Solutions Center reports that 91% of packaging waste is sent to landfills or is in the environment. The environmental cost of that amount of waste is staggering.
The truth about choices
I knew there had to be a better way. Why do consumers even have to make a choice between convenience and the planet?
The truth? We don’t. Fully reusable packaging materials, such as PackIt Fresh Freezable Grocery Delivery Totes, let us have both. The totes are reusable, freezable and efficient containers for transporting perishable food. They offer an easy, cost-efficient alternative to single-use packaging, and a simple yet super-cool way to keep food cold and fresh during final-mile deliveries. Quite simply, they lower the true cost of convenience for consumers.
Even HelloFresh is hopping on the reusability train in their sustainability efforts; they are testing out a reusable HelloFresh box in the Netherlands and Australia. The box is not recycled; it is picked up by their delivery service and used again for another shipment. Kudos to them! I hope others will follow their lead.
If packaging materials can be reused, they won’t have a negative impact on the planet. It’s food-delivery companies that need to make a choice to give their customers what they want — the convenience they crave and a safer planet — without a side dish of guilt.
– Melissa Kieling, CEO
Environmentally minded Americans thought they were doing the right thing. For decades, they diligently separated their garbage into appropriate recycling bins, with visions of the plastic and paper they collected being carted off to recycling centers to begin new lives as something else. But the truth is out, and the picture is not so pretty.
In the early 1990s, the U.S. started offshoring many of its “contaminated” — or dirty — recyclables to China. According to Sierra, China dumped much of the haul into rivers that fed oceans of pollution. At the same time, Americans became lax in their sorting, cleaning and recycling, thinking China was doing the job.
But even China started cracking down on pollution and, in 2018, began banning imports of plastics, as well as some types of cardboard, paper and glass. Lacking appropriate infrastructure to handle the recycling of such a huge amount of garbage, the United States found itself in a recycling crisis. Some communities started sending their recyclables to landfills, and with prices now soaring for recycling programs, some just stopped such programs altogether.
Consumers focus on the second R
“Reduce, reuse and recycle” are often referred to as the “three R’s” of sustainability. With the reality about recycling laid bare, consumers now know recycling was never the full solution, and they are turning their sustainability focus to the second R: reuse.
“Recycling has been over-praised through the years,” Jonathon Engels writes for OneGreenPlanet. “While it’s great that we have found ways to break down our waste and create something else (or the same thing) with the recycled materials, it still requires a lot of energy. What’s more is that, if we simply recycle everything, we are likely using new resources each time we buy that item again. In other words, it’s better than sending things to the landfill, but recycling should hardly be our first thought on helping the environment.
“For those of us looking to care for the planet, we need to get back to reusing. Recycling should be a last option, just before the garbage can.”
Customers demand reusability practices
As sustainability-minded consumers align their consumption with reusability principles, they expect the companies with which they do business to do the same. This shift coincides with a n exponential, pandemic-induced increase in online shopping, especially in the areas of grocery and meal-kit delivery, which necessitates more and more packaging.
Armed with the knowledge that single-use packaging, including plastics and corrugated cardboard, likely won’t have an admirable afterlife, customers are demanding reusable packaging. Smart brands are re-examining their packaging through a reusability lens and are turning to innovative, sustainable alternatives, such as PackIt Fresh totes. Fully freezable PackIt Fresh totes are completely reusable, so there’s no unnecessary contributions to landfills or our oceans.
Consumers are considering true sustainability more than ever in their buying decisions, and brands that offer reusable products and packaging are taking their rightful place at the top of shopping lists.
]]>Pandemic-induced buying has fueled crazy growth in e-commerce, and with that comes an exponential increase in the packaging that carries those orders. Nine months into this new reality, consumers are taking a moment to breathe and assess what their new shopping habits are doing to the world around them. And many are not liking what they see.
McKinsey & Co. recently published results of a global survey that looked at consumers’ attitudes toward sustainable packaging: 55% of U.S survey respondents reported they are extremely or very concerned about the environmental impact of product packaging.
The CGS 2019 U.S. Consumer Sustainability Survey revealed that more than two-thirds of respondents consider sustainability when making a purchase and are willing to pay more for sustainable products. Gen Z shoppers led the way, being more likely to purchase, pay more and stay loyal to brands with sustainable options.
And a Nielsen study done in 2018 found that nearly half of U.S. consumers would definitely or probably change their consumption habits to reduce their environmental impact. Nielson predicted these sustainability minded shoppers would increase their spending by $14 million–$22 million by 2021 — a prediction made before the pandemic raised the roof on e-commerce.
“End consumers have made their voices heard and have demanded that providers focus on waste and recyclability of the e-commerce packages they receive,” Alicemarie Geoffrion, vice president of packaging operations for DHL Supply Chain, North America, writes for Logistics Management. “Ship your product in a box that seems too big, and you’re sure to hear about it from customers on social media. … Move to a poly bag solution to reduce shipping costs, and face criticism not only from end consumers for using non-recyclable materials, but also from in-house marketers for diminishing their brand image. … It is no surprise why providers and retailers feel like they are facing a no-win situation when considering changes to e-commerce packaging.”
In the trip from no-win to win-win, sustainable packaging is a key force driving a supply-chain redux.
But what, exactly, is meant by “sustainable packaging”? The Sustainable Packaging Coalition defines the term with eight criteria. Sustainable packaging:
1. Is beneficial, safe and healthy for individuals and communities throughout its lifecycle
2. Meets market criteria for performance and cost
3. Is sourced, manufactured, transported and recycled using renewable energy
4. Optimizes the use of renewable or recycled source materials
5. Is manufactured using clean production technologies and best practices
6. Is made from materials healthy throughout the lifecycle
7. Is physically designed to optimize materials and energy
8. Is effectively recovered and utilized in biological and/or industrial closed-loop cycles
“As the waste from more and more deliveries continues to increase, climbing alongside the guilt felt by sustainability-minded Americans, shippers need to adapt,” says Melissa Keiling, founder of PackIt Fresh reusable, freezable totes. “It’s crystal-clear: Companies that take the lead in addressing these environmental issues will attract customers who care about the planet.”
With that number of caring customers growing by the minute, companies can’t afford to ignore them.
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Few of us prize a garage full of garbage. And even fewer people like a landfill. Consumers are making their likes and dislikes known, and public sentiment around single-use packaging waste is driving real change — and growth! — in consumer-goods packaging.
More than half of the respondents to a 2020 McKinsey & Co. study say they are extremely or very concerned about the environmental impact of product packaging. What’s more, those same consumers are willing to put their money where their mouths are: The survey also found that 60%–70% would pay more for sustainable packaging.
The 2020 Global Buying Green Report, conducted by the Boston Consulting Group for packaging company Trivium, provided even stronger findings: “Environmentally friendly, recyclable packaging is important to more than two of three consumers.” They found 74% of respondents in the U.S., Europe and South America were willing to pay more for sustainable packaging, with 25% willing to pay an additional 10% or more.” The numbers don’t lie:
53% of respondents are actively looking for recycling or sustainability information on packaging.
59% are less likely to buy a product in harmful packaging.
47% won’t buy products in packaging that is harmful to the environment.
With so much data supporting sustainable practices, no business can afford to ignore their increasing impact on your bottom line.
Sustainability drives sales
In case you think employing such sustainable practices will slow sales, the NYU Stern Center for Sustainable Business (CSB) begs to differ. Its 2020 Sustainable Share Market Index™ found that sustainability-marketed products are responsible for more than half of the growth in consumer packaged goods (CPGs) from 2015 to 2019, and that this growth has continued despite the COVID-19 pandemic.
“Our analysis demonstrates that sustainability-marketed products enjoy a hefty premium, continue to grow faster than their conventional counterparts and contribute to over half of the growth to overall CPG. It’s clear that brand managers who are not pursuing sustainability strategies will be increasingly left behind,” said Randi Kronthal-Sacco, senior scholar, marketing and corporate outreach, at the NYU Stern CSB, who led the research initiative.
Who wants to be left behind? No one, that’s who.
Where packaging fits in
You can hardly employ a sustainability-based sales and marketing strategy without employing sustainable packaging. Single-use packaging is driving us toward an environmental cliff, and consumers are demanding the companies from which they purchase put on the brakes now.
Right-sizing packages is a smart way for companies to start their sustainability efforts. “The No. 1 customer complaint about e-commerce and internet retail customers is excessive packaging,” Hanko Kiessner, CEO of Packsize International, says. “It is not a secret anymore that 26% of the corrugated used in packaging today is unnecessary. There are 5.8 million tons of paper that are used to make boxes too large.”
But even right-sized packages are, by and large, single-use vehicles. Why not give up the corrugated cardboard altogether? Reusable shipping containers are taking their rightful place in the supply chain, enabling retailers to save money and please customers at the same time. In the exponentially growing world of meal kit delivery, for example, eco-friendly PackIt Fresh totes are setting the food-delivery segment on its head by offering reusable, fully freezable packaging that drastically reduces the amount of waste associated with these deliveries.
Consumers are sending a loud-and-clear message regarding sustainable practices, including packaging. As McKinsey writes: “Going forward, FMCG (fast-moving consumer goods, another term for CPG) companies and retailers will have to become more aggressive in their approach to addressing sustainable packaging in response to growing consumer awareness and increasing regulatory requirements.”
]]>As demand for delivered groceries keeps rising, and e-commerce continues to be the purchasing mode of choice, retailers need innovative, cost-effective practices to maintain their supply chain from beginning to end. A colder last mile is just what the shipper ordered.
Pandemic-induced chills
Is it Monday or Thursday? Is this breakfast or dinner? The pain of managing work, school and home, when all three have combined around your dining table, is real. And the ability to get actual food on that table is proving to be more challenging than ever. One of many COVID-related changes, families are eating more meals at home, and it’s beginning to seem like mealtime all day, every day. This waxing demand for good family meals is colliding with waning time and energy on the part of crazy-busy parents. All this is driving more consumers to rely on grocery and meal-kit delivery.
U.S. online grocery spending has tripled, rising to 10–15% of total grocery sales in early May, according to Bain & Co. Lest you think things will change back any time soon, in June, consulting company NEXT found that 59% of online grocery shoppers plan to continue at the same level, and 28% of online grocery shoppers plan to shop online for groceries more than they did during the stay-at-home period.
With consumers increasingly ordering their food — including frozen and perishable items — online, there’s a conundrum: How do you keep food cold and fresh from cooler to curb?
The growing market at the end of the chain
“Despite being the most important leg of the supply chain, [the last mile is] the most inefficient. Just the last mile of the entire supply-chain adds up to about 30% of the cost,” Jungle Works reports.
According to NACS, a global trade association for convenience and fuel retailers, on CSPDailyNews.com, last-mile delivery was a $31.2 billion market in 2018, and it is projected to grow to $50 billion in 2022. Keep in mind: Those numbers do not include the products, only the deliveries, themselves.
“We’re going to see this market continue to evolve and grow, as more and more retailers bring solutions to their shoppers through last mile,” says NACS’ vice president of research, Lori Buss Stillman, who predicts that 17 million households will be new users of last-mile fulfillment once the pandemic subsides.
There is no shortage of providers selling refrigerated staging areas or fleets of refrigerated trucks to try to address this opportunity. But for many grocery and meal-kit e-tailers, those just aren’t cost-efficient ways to maintain cold-chain integrity for last-mile deliveries.
Cool efficiency for the last mile
It’s a problem Melissa Keiling has solved before. Long story short, Keiling just wanted her kids’ lunches to stay cool and fresh through lunchtime, so she invented a completely freezable lunch tote called PackIt.
“It dawned on me that we’ve been solving the final-mile cold chain for 10 years — just from the kitchen refrigerator to the school or office lunch table,” Keiling says. PackIt recently hatched a commercial sibling: PackIt Fresh freezable totes, which maintain cold storage on their own for 15 hours.
Developing affordable, efficient best practices for final-mile deliveries is the key to gaining and keeping e-customers. And with enhanced safety practices on everybody’s mind, it’s even more essential to ensure perishables are properly shipped. If you’re not transporting them correctly, you also run the risk that perishable food items will develop bacteria. There’s no room for that, especially at a time like this.
These uncertain times don’t seem to be abating any time soon, and everyone is searching for certainty wherever they can find it. Both consumers and retailers need to be certain their fresh and frozen food arrives at its destination with cool confidence.
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