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How Packaging Compliance helps businesses to be more profitable and efficient as well as being green
Increase profitability and efficiency as well as becoming greener through complying with the Packaging Regulations. The Regulations force businesses who handle goods surrounded by packaging to pay a green tax, which is used to fund recycling of packaging waste. The short term costs of Compliance are apparent, but what can sometimes be overlooked are the long term positive effects.
Compliance and Regulations are often met with resistance, however embracing these issues head on can have underling benefits to a companies finances and efficiency, as well as their environmental stance. One of the most overlooked legislations within the UK is compliance with the “Packaging Regulations”. Although the infrastructure for complying to the Packaging Regulations can be questioned, its overall intentions are clearly positive and have real benefits to our environment.
A deliberate benefit that has arisen from complying with the Packaging Regulations is that more thought is now being given into the amount of packaging that companies are introducing to the UK system. In the past many organisation’s have leant towards over packing goods to ensure that they minimise damage in transit, or to improve presentation. Now, knowing that they themselves will have to bear the cost of recycling, they think twice about the implications of over-packing.
Profitability & Efficiency
An understandable concern for many businesses when having to comply with the Packaging Regulations can be costs and the effect that it will have on profitability; however these costs can be outweighed by the long term benefits.
Due to the nature of the Regulations, businesses are required to assess the amount of packaging that they are handling. Under the Regulations the more packaging the business introduces into the UK system, the more of a levy they will have to pay. This has given businesses the opportunity to examine their packaging usage. By imposing a financial incentive, companies such as Heinz and Marks & Spencer’s have used the Regulations to reduce the amount of packaging they use.
Heinz wanted to reduce the amount of steel packaging they used for their baked bean cans. By redesigning their packaging they were able to reduce 1,400 tonnes of steel used. This not only reduced their compliance costs but also global production costs of approximately £500,000.
There are other factors that strengthen profitability. Taking into consideration the supply chain for the production of packaging products, the use of recycled materials will help to reduce the raw material costs used in the manufacture of packaging. These cost savings can be reaped by businesses along the supply chain.
Approaching the Regulations head-on can also benefit a business in the eyes of their customers. Companies that have an environmental policy or go as far as being accredited for environmental management, i.e. ISO 14001, place themselves in a prime position for business growth by leveraging their green credentials.
Compliance also aids in increasing efficiencies within a business. Northern Foods found that by redesigning the packaging around its Goodfella’s pizza range it was able to reduce 4,000 tonnes of transit packaging. This subsequently allowed the company to reduce its transport miles and also lead to a reduction in damages by 75%. (DEFRA, 2009)
Redesigning packaging to be environmentally friendly has been a key feature for Kite Packaging. Kite have helped businesses to not only reduce their environmental impact, but also make cost savings in the thousands through its innovations. A prime example of this is the Enviro-box range which uses less paper and allows twice the amount of cartons per pallets. This equates to 8.5 million tonnes of paper and pulp saved, 2.9 million tonnes of timber saved and 3,835 trucks being taken off the road! Another environmental benefit gained includes a 30% reduction of co2 emissions.
The Green Tax
As much as profitability and improving efficiencies is high on the agenda to businesses, the primary aim of the Packaging Regulations is environmental sustainability sustainability.
The Packaging Recovery Note (PRN) system is a key feature of reducing the amount of packaging waste within the UK. Complying with the Regulations instructs companies to purchase PRNs, depending on the amount and types of packaging materials that they handle. The arrangement of the PRN market allows for the cost of recycling to be funded by businesses based on how they handle packaging. Unlike other “taxes” that business will pay, PRNs directly fund the waste infrastructure to increase the amount of recycling and recovery that is taking place in the UK.
The initial negativity surrounding Compliance is often founded on preconceptions regarding cost and inconvenience. However, there are many direct benefits that businesses can experience through Compliance. One being the creation of opportunity for production innovation and smoothing out inefficiency within your business. Environmental concerns can also be positively impacted. Although there are costs to begin with they can be repaid in the long term if businesses embrace Packaging Compliance face on.