Eco-friendly Packaging Premium

CPGs design packaging to serve many functions; one critical role is to enhance consumer perception of product value. Typically, CPGs do this by using a bigger box or more expensive or flashier material than necessary. Yet, CPGs and retailers alike are under pressure to reduce this waste.

A new generation of biodegradable packaging by companies such as EarthShell and NatureWorks (a Cargill company) is emerging as a cost efficient alternative. While this is great news for the environment, it may be somewhat surprising to marketers that the benefits from biodegradable packaging may not stop there. Studies suggest that consumers may be willing to pay a premium for products that use these materials. Research conducted by Grapentine on behalf of NatureWorks found that “50% of those surveyed would pay 20 cents more for products” in NatureWorks’ biodegradable polylactide packages [made from corn starch] versus more traditional petroleum-based plastic containers. (“Marketers See ‘Green’ in Nature-Friendly Packages”, BrandWeek, April 3, 2006)

Moreover, eco-friendly labeling may serve as an essential point of differentiation for products, especially for those where biodegradable packaging becomes a tangible expression of a product’s brand promise. Biota Spring Water – sold in biodegradable containers – is one example (see video of bottle decomposition).

Lower cost, higher prices, differentiated brands…retailers ranging from Whole Foods to Wal-Mart are taking note…so should marketers.

9 thoughts on “Eco-friendly Packaging Premium

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