(Editor’s note: Need help aligning your supply chain to Walmart’s sustainability goals? Our team helps you do it! Click here to schedule a free consultation.)
Walmart has once again cranked up its commitment to sustainability. In the recent WalStreet Fireside Chat, the discussion was not merely a broad look at the carbon footprint. Instead, it remained laser-focused on plastics in packaging in relation to Walmart, suppliers, and customers.
Through education, accountability, and innovation, Walmart has aggressive goals for itself over the next few years. In partnership with suppliers and a plan for customer education, the company aims to lead the way to an industry of zero plastic waste.
A Big Goal from an Important Source
Laura Phillips, SVP of Global Sustainability for Walmart, began the discussion with some background on the company’s sharpened focus. She explained the attention to plastic came from heightened demand from customers.
“Over the last year or so, we’ve really seen our customers’ interest rising on this issue of plastics and packaging,” Phillips began. “At Walmart, we’ve always had this ambition to create zero waste. Now we’re just extending that ambition into plastic. Our ambition is to create zero plastic waste.”
Phillips understands not only the importance of this goal, but also the difficulty of the journey toward it. She continued by acknowledging the industry’s reliance on plastic along with the issues it creates.
“Plastic in and of itself is a really important material,” she begins. “It’s lightweight, we value it for food safety, and it’s a great material in terms of innovation. The problem is only around 14% of plastic is being recovered and recycled. The rest, in many cases, is going into landfills and other places in the environment (oceans, rivers, lakes). The world’s ability to process and collect plastic isn’t keeping up with the demand. We believe that’s something we can do more about.”
Walmart Suppliers Held Sustainably Accountable
The concept of sustainability has changed over the last several years. As one participant noted, “Sustainability used to be good for your PR. Today, it’s good for your business!”
Why? Walmart has shown it all goes back to consumer demand. On one hand, the shopper is becoming more discretionary and less brand-loyal. Younger demographics gravitate toward products that align more to their personal values.
More sustainable packaging also translates to more sales. The fireside chat panel agreed that less packaging and plastic on a store item invited more customer interaction with that item. Great interaction at the store level is shown to lead to more purchases.
How serious is Walmart on helping suppliers become more sustainable? Part of Walmart buyers’ evaluations includes sustainability of their suppliers. All suppliers are encouraged to bring sustainability into their buyer conversations.
Reverse Logistics and the Internet of Waste
For all the good the internet has meant to retail, two waste factors continue to grow: reverse logistics and shipment packaging.
Reverse logistics in retail, simply put, is the return of merchandise back to the supplier or retailer for the purpose of disposal or recapturing value. Ann Starodaj, Senior Director of Sustainability for Optoro, weighed in on the impact of online shopping to the reverse logistics step in supply chain.
Starodaj illustrates that online shopping created a boom, but not a welcome one for reverse logistics. As she states, “Return rates for online shopping are up around 40%. Consumers often by three or four varieties of a product knowing they will only keep one.” The challenge for retailers is retaining more value and less waste on the growing returns.
Packing shipments for delivery is an area of retailer waste of great concern to customers. While the internet has connected customers to retailers, it has also connected customers to each other. Environmentally-conscious shoppers take to social media each day with photos of wasteful shipment packaging:
- A large box stuffed with filler to ship one small item
- Five small items from one retailer shipped in multiple boxes
- Layers of bubble wrap and padding on non-breakable items
The panel acknowledged customers are being heard. Innovation and technology will help in reverse logistics to reduce waste.
Tools for Suppliers and Customers Alike
Phillips committed that Walmart wants to lead the way in reducing plastic waste, but extends the partnership to suppliers and customers.
For suppliers, learning about and committing to Project Gigaton is a great way to join Walmart in reducing waste. Walmart has also developed the Recycling Playbook for suppliers to clarify expectations and best practices.
For customers, Phillips explained continued education on recycling was coming to stores and packaging itself.
“We’ve set our own goals,” she says. “We know our biggest footprint for plastics is packaging. In our own private brands, we’re going to lead the way. We want our private brands to be 100% recyclable, compostable, and reusable by 2025. We’ll also label all over our private brands with easy to understand consumer labeling so customers know if it’s recyclable and really clean up the recycling stream.”
Phillips added that Walmart was planning in-store events further teach customers how to recycle, look for recycling options, and buy “non-new” to promote reuse.
(For more insight from this event, check out our podcast, The 8th & Walton Conference Call, with guest Jeff Clapper.)