Gartner Notes Sustainable Packaging Shift in Manufacturers

Gartner, the American research and advisory company, forecasts that by 2028, a significant proportion of organisations will abandon voluntary sustainable packaging goals. Instead, these companies will align with regulations.

At the moment, many companies that promote their sustainable packaging products are exceeding government requirements by choice.

However, the strenuous demands of self-imposed targets could see many firms aligning with formal mandates.

Green initiatives under strain

Sustainable packaging adoption reached 50% in 2023, a rise from 36% in 2021.

Yet, companies face challenges in meeting green targets.

As governments internationally push for responsible packaging, like the EU rule that mandates all plastic packaging to be recyclable by 2030, companies are feeling the strain.

At the same time, global plastic production surpasses 400 million tonnes each year, yet only 9% gets recycled.

Major players like The Coca-Cola Company and PepsiCo are noted contributors to plastic waste, despite having set robust sustainability objectives.

Companies such as Walmart and Unilever cite insufficient infrastructure and consumer habits as barriers to meeting their sustainability goals.

"By the end of this year, Gartner predicts that 90% of public sustainable packaging commitments will remain unmet, as organisations continue to rely on plastics and single-use packaging," says John Blake, Senior Director Analyst in Gartner's Supply Chain practice.

He adds: "With packaging rules rapidly evolving, CSCOs must shift their focus to meeting extended producer responsibility (EPR) requirements, which will demand new investments in data management, package design and compliance resources."

These EPR policies place the onus of reducing environmental impact firmly on packaging producers, covering both financial and operational accountability.

In the US, 12 states will enact EPR legislation by 2025, with several bills already passed.

Many programmes urge manufacturers to align with a Producer Responsibility Organisation (PRO) to draft and support compliance plans.

In this system, manufacturers remit fees to PROs, which are allocated to meet legislative costs.

Cost implications and strategic preparations

Gartner highlights the need for leaders to ready profit and loss owners for increased expenses arising from EPR compliance.

Shifts in packaging legislation could escalate costs significantly for manufacturers.

Under EPR and PRO frameworks, companies must submit detailed data on packaging types, volumes and recyclability to ensure they meet jurisdictional mandates.

John Blake notes: "Many organisations are currently unprepared for these new requirements, lacking the data management tools and resources needed for compliance. Longer term, legislation can lead to significant costs for PRO fees and fines, alternative materials and supply chain adjustments.”

Consequently, design strategies are being renegotiated, focusing heavily on legislative compliance.

Strategic direction for industry leaders

Gartner outlines strategic steps for CSCOs and other industry executives to take in order to promote effective adaptation:

1. Education – Train all departments, including marketing, manufacturing and R&D, about EPR legislation risks and impacts.

2. Engagement – Establish collaborative networks across supply chains, fostering discussion on sustainable material sourcing and efficient return channels.

3. Legislative Consideration – Packaging laws must be integrated into broader strategies, influencing design, materials, and manufacturing decisions.

John concludes: "Organisations that fail to prioritise packaging legislation in their design and sourcing strategies risk losing market access and eroding margins as EPR fees rise."

Companies that successfully navigate and adapt their packaging strategies with an eye toward circularity and infrastructure-compatible materials may mitigate some short-term costs in exchange for improved long-term financial performance.