How can food CPGs be best-in-class in reducing waste in their finished goods packaging?


This article was written by Corey Chafin and Viraja Ramanujam. The original article was published by Kearney. You can find the article here.

The leaders design layers of protection with materials that are well-suited to the supply chain—from production all the way to the retail shelf.

Packaging is an important component of food products, serving both as a protector of product quality and a medium for brand expression. Effective packaging design ensures that the product survives the journey from production to the store shelf while balancing quality and cost. Once on the shelf, packaging can help attract consumers through both branding and visual appeal.

What’s less apparent is the waste that comes with that packaging. Packaging is meant to protect the food, but if the package is damaged, consumers doubt the quality of the product. Damaged packaging compromises product integrity and brand image, which impacts profitability—contributing to a 1.0 to 1.5 percent margin loss for food consumer packaged goods (CPG) companies.

What are the different layers of packaging?

Packaging waste can occur in all three layers. Primary packaging preserves food quality and improves consumer satisfaction. Most often, food products are sold in primary packaging with branding on it, such as a bag of chips. Secondary packaging adds a layer of protection to fragile food products, such as crackers, or is used to bundle units of an item, such as a box of chocolate bars. Tertiary packaging refers to pallet protectors, such as corrugate packaging and shrink wrap. Together, these three layers form a complex ecosystem that requires meticulous design to minimize waste.

Why is packaging waste a big problem for CPGs?

Despite its critical role, packaging is often overlooked during efforts to optimize costs, leading to waste from poorer-quality materials. Balancing cost reduction and waste management is paramount to mitigate losses and foster sustainability. Moreover, supply chains become more complex over time through organic and inorganic growth, and packaging is seldom revised to address this—for example, breaking down and rebuilding pallets at an additional distribution center node. Challenges also arise from the diversity of capabilities at internal and external manufacturing facilities, making standardization difficult.

What are the typical root causes of packaging waste?

Food packaging waste can occur in a variety of ways (see figure):

Primary packaging

  • Primary packaging failure is generally a result of secondary packaging failure that shifts stress to the primary pack, including sealing issues.

Secondary packaging 

  • Insufficient packaging protection. Fragile items such as cookies and chips lack adequate protective layers, or a subpar creative workaround leads to damage and crushed products.
  • Paperboard quality issues. Low-quality recycled paperboard struggles to maintain its shape and is susceptible to moisture damage, dents, and crushing under pressure.
  • Glue quality and quantity. Using poor glue quality to reduce costs, not placing glue in the correct places, and skimping on the amount of glue used in order to increase efficiency can all cause packaging to open, making the items unsellable.
  • Excess headspace in cartons. Extra space between the primary packaging and the top of the carton reduces structural integrity and causes packages to get crushed during transit.

Tertiary packaging 

  • Pallet patterns. Improper weight distribution on pallets puts excessive pressure on lower boxes, causing them to collapse. Overhang is also more likely to cause damage during handling and transport.
So what should food CPGs do?

Having durable packaging begins with identifying the layers of protection and determining their design, followed by selecting appropriate materials to address the complexity of the supply chain. Strategic structural packaging design improves not only durability and stackability, but also the cost efficiency and marketability of the product. First, an end-to-end assessment of the portfolio to uncover the root causes and pinpoint which problems are impacting which SKUs is crucial, as is designing an end-to-end packaging solution based on the supply chain flow from production to distribution and ultimately to retail shelves and consumption. Building a clear plan to address these issues, starting with the ones that occur across the most SKUs, will help with execution.

Next, set up a waste tracking dashboard to determine the impact of waste reduction initiatives. Collaborate with suppliers and equipment manufacturers to brainstorm practical solutions to combat packaging waste at your company—there is no “one size fits all” solution. Internally, partner with your operations team on changes to product handling and best practices to reduce damage.

Finally, prioritize technical adjustments to secondary and tertiary packaging to avoid delays in brand approval and disruptions in consumer experience. Food CPGs that take a proactive stance on packaging optimization can reduce their finished goods waste, thereby improving margins.

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