Packaging Brand Owners Rebalance Sustainability

Sustainability remains an important strategic priority for the brand owners we canvassed in our annual survey for 2024, with the majority remaining broadly positive about their ability to achieve sustainability targets. But economic pressures have taken their toll, and a rebalancing of priorities has seen brand owners looking to achieve sales growth and cost savings in tandem with progress on sustainability. The slow speed of regulatory change has been cited by some as a reason for the reduction in progress on sustainability, but economic pressures are proving to be the big issue for this evolving agenda.

Increasing spend on sustainability

The sustainability agenda is here to stay, and the brand owners we spoke to anticipate an increasing proportion of their expenditure to be dedicated to sustainable packaging. Much of this will be through changes to packaging materials and design (currently accounting for c.49% of sustainability spend), though developments in production processes with aims such as lowering carbon footprint are becoming increasingly important too, with c.35% of sustainability spend focused in this area in 2023 (see Figure 1).

Our survey shows brand owners currently spend an average of 35% of packaging outlay on sustainable packaging, and an increase is on the cards, with expenditure expected to grow to 43% by 2027. Many of those in our survey feel broadly positive about their focus on sustainability and their ability to progress in the near term against sustainability targets.  

These findings also reinforce evidence from our Global Consumer Sustainability Survey, which highlighted the growing impact of sustainability on consumer sentiment and behaviour, and the opportunity for companies and brands to drive value creation by pursuing sustainable practices.

Making a trade-off

While the overall news about sustainability’s mainstream importance is positive, under-pressure brand owners are increasingly looking to balance this approach with other commercial imperatives. Our packaging survey shows respondents taking an increasingly nuanced approach, with many placing greater emphasis on other competing priorities with the potential to overshadow sustainability goals.

Cost savings and aesthetic improvements are just two of the priorities jostling for position with sustainability (see Figure 2). 

Battling slow regulatory change

A significant 82% of the brand owners in our survey— particularly those from larger firms — identified ineffective and slow regulatory change as a key barrier to moving to sustainable packaging (see Figure 3).

The slow pace of regulatory change was considered the primary barrier to a move towards more sustainable packaging for c.28% of our sample. And the perceived ineffectiveness of regulation featured strongly with respondents too — however, while c.34% of brands cited this as a primary barrier to a move towards more sustainable packaging, it’s important to note that for c.39%, this was their least important factor.  

Looking beyond sustainable packaging materials

A small but important 8% of those taking part in our survey do not have access to sufficient quantities of sustainable packaging. Furthermore, c.5% of all respondents were considering investment into both collection and mechanical recycling capabilities in order to address this shortfall. This trend was more commonly reported by larger companies with annual revenues of €5 billion+, over-representing at c.25% compared to the sample spread of c.15%.

The Big Picture

This article focused on sustainability is the last of three articles in a series reporting the trends we uncovered in our recent survey of European brand owners. You can read our other summaries on demand trends and investment and innovation.

If you would like to talk with us about these topics or access the full survey results, please contact us.

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