Packaging Pains: The Costly Challenge of eGrocery Delivery

Last week, Amazon announced yet another potentially game-changing move (and we're not even talking about their new line of grocery stores): Amazon Day. This is their response to the packaging pains that retailers face as they strive to offer fast, efficient delivery: by asking Prime members to choose one day a week to receive all their orders, Amazon plans to optimize delivery routes and cut down on packaging, helping them create a more sustainable business model.

When it comes to packaging, grocers face their own set of obstacles, especially when it comes to home delivery: meat must stay frozen; eggs must stay intact; lettuce must stay cool but not wilt – even while sitting on a customer's doorstep on a 100-degree day – for reasons of food safety as much as customer satisfaction.

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Home delivery poses its own set of challenges, but it's not the only channel in which packaging is a problem. According to CNBC, "23% of landfill waste comes from containers and packaging, a huge problem for supermarket operators." Waste costs grocers an estimated $18.2 billion a year. Grocers today are scrambling to meet the demands of customers, who are calling for increased sustainability and efforts to reduce their carbon footprint.

"Consumers want to know whether brands are ‘doing the right thing’, and will shop accordingly," writes Inside Logistics. "Avoidance of single-use plastic and awareness of the circular economy will continue to increase pressure for sustainable packing alternatives. Recycling will become ever-more important."

This trend is especially evident in meal kit services, who use a variety of materials - from cardboard to Rubbermaid to computerized coolers - to deliver the goods. HelloFresh, for instance, uses  "paper bags [that] are recyclable and compostable, and 100% low-density chipboard [which is] 100% approved for curbside recycling." Ice packs can be disposed by "[using] scissors to cut a small corner and empty gel contents into the trash before recycling this #4 plastic pack." Much of it can be recycled, yet that leaves the burden on the customer to actually do the recycling, which is no guarantee.

In 2015, a New York Times article drew attention to the wasteful packaging of most meal delivery services. That same year, the EPA reported that only half of containers and packaging products were recycled. The rest – over 29 million tons – went to landfills.

Since then, businesses have responded to the demand for reduced waste, working to ensure sustainability without relying on the customer. FreshRealm, a  perishable food delivery platform, has created the Vessel, a shipping container designed to hold a consistent temperature no matter the weather conditions. It’s reusable, and it’s actually reused - FreshRealm picks it up from the doorstep the next day, refills it with food, and delivers it to another waiting customer.

A prototype of the Dynosafe smart safe that secures to your porch

A prototype of the Dynosafe smart safe that secures to your porch

Dynosafe provides similar temperature-controlled technology, and goes a step further. Through an app, customers can program Dynosafe packaging to a specific temperature, and then get a notification when it’s delivered. This is useful in cases of medication, electronics, cosmetics, and flower delivery, any of which might require a specific temperature.

Pick-up lockers, too, have stepped up their game to compete. Companies such as Southwest Solutions and Parcel Pending provide refrigerated and freezer lockers accessible by personalized codes. These businesses partner with apartment buildings, universities, and other population-dense areas to set up courier-agnostic home deliveries, eliminating the need for extra packaging.

Small-format entrepreneurs have answered the call to reduce waste as well. In 2018, two waste-free groceries stores opened in New York City: The Wally Shop and Precycle, both of which source from farmers markets to offer customers package-less groceries. Keeping those stores company are the Zero Market in Denver and the Nada Grocery in Vancouver, Original Unverpackt in Berlin, Earth Food Love in the UK, and a handful of other small-format zero-waste stores.

The fight against packaging waste isn't just coming from entrepreneurs and boutique stores. In 2016, California banned the use of plastic bags, and a similar law might pass soon in New York State. ALDI, Sam's Club, and Costco do not provide free plastic bags. Publix and Sprouts have poured resources into minimizing packaging.

The Good Side of Packaging

And yet, retailers like packaging. It helps stores sell items, with eye-catching designs and information about the product. It keeps produce and CPGs fresh. It can help regulate amounts sold, helping stores predict sales and track inventory with more accuracy. In fact, according to Packaging Strategies, "demand for produce packaging in the U.S. forecast has been rising about 3.2 percent per year and is expected to hit $6 billion in 2019."

Also, some say it might not the worst culprit, environmentally speaking. According to Professor Scott Matthews of Carnegie Mellon University, "online shopping has a better effect on the environment than the waste that comes from gasoline and other emissions if you drive to the store instead."

In fact, packaging can even be good for the environment, says the study How Packaging Contributes to Food Waste Prevention. According to Carole Zweep, NSF Canada's manager of packaging, "proper packaging results in less greenhouse gas emissions. Although more packaging is used, less food is wasted leading to a lower overall carbon footprint."

Hence the need for smart packaging.

According to Packaging Digest, smart packaging has two categories: active packaging, which provides a necessary service such as temperature control, and intelligent packaging, which uses digital technology to help track delivery progress and provide other information while the package travels from warehouse to doorstep.

Smart packaging is predicted to become the norm in e-commerce. Alexandre Carvalho, the Global Marketing Services Director of Tetra Pak, expects that as much as 80% of consumer-packaged goods companies will adopt the smart packaging model by 2025. Food Ingredients First writes that "smart packaging will enable suppliers to utilize digitalization technologies to respond to some of the largest trends shaping online and physical grocery, such as sustainability, personalization and convenience."

Locai will keep an eye on the new developments in this field, so be sure to sign up for our newsletter to stay in the loop. To learn how we can help your grocery business stay on top of the latest trends and offer your customers a streamlined, end-to-end service, click here.