Wal-Mart’s Scorecard Drives Sustainable Packaging

It’s been eight months since Wal-Mart Stores Inc. (www.walmartstores.com), Bentonville, Ark., officially launched the Wal-Mart Packaging Scorecard, a software tool that grades packages on their environmental friendliness. The scorecard is part of Wal-Mart’s broader, corporation-wide sustainability initiative.

Buyers at Wal-Mart and the company’s Sam’s Club (www.samsclub.com) division have begun using the scorecard to help make purchasing decisions for the foods, beverages and other products the stores stock. That means packaging, especially the environmental aspects, is becoming just as important as the product that’s inside. And, at least at face value, is a consideration ranking somewhere up there with price.

As Wal-Mart continues to move upscale (as at this Orlando, Fla., supercenter) price alone is less of a consideration. Packaging sustainability, in theory, will be an important consideration for suppliers.

“On Feb. 1, 2008, the online scorecard was made available to all of our buyers to use as a tool to make more informed purchasing decisions, and buyers may show preference to those suppliers who have demonstrated a commitment to producing more sustainable packaging,” said Wal-Mart spokeswoman Shannon Frederick. The company’s objective is to reduce packaging in its supply chain by 5 percent by 2013.

Wal-Mart suppliers can use the scorecard to measure how their packaging helps the retailer achieve its goals to be supplied 100 percent by renewable energy, create zero waste and sell sustainable products. The package receives a grade based on the results of the scorecard, and suppliers gain insight into how they can improve their packaging.

As of August, 8,199 unique vendors had accessed the Packaging Scorecard Web site, and more than 170,000 items had been entered into the system. 

Introduced initially for suppliers to U.S. Wal-Mart and Sam’s Club stores, the scorecard eventually will be available to companies that supply stores and clubs in other parts of the world. The scorecard currently is rolling out in Canada, and Latin American and European versions are in development. Insiders expect the international versions to roll out in the next two years.

Having up-to-date materials data in the scorecard is important — assuming your new data is more environmentally favorable than your old data in the scorecard — because packaging materials play such an important role in a package’s performance on the scorecard.

Specifically, the nine metrics that form the foundation of the scorecard are:

• Greenhouse gas emissions created during package production, with a weight of 15 percent.
• The packaging material’s sustainability, weighted 15 percent.
• Average distance the material is transported, 10 percent.
• Package-to-product ratio, 15 percent.
• Cube utilization, 15 percent.
• Recycled content, 10 percent.
• Recovery value, 10 percent.
• Renewable energy use, 5 percent.
• Innovation, 5 percent.

In other developments, Wal-Mart is creating updated reports to make it easier to compare packages provided by individual suppliers and those from competitive suppliers within product categories.

“All the raw data in the scores has been entered. Now [Wal-Mart is] trying to take that data and make interpretations and do comparative analysis,” says Drew Gilchrist, business development manager for Wal-Mart and Sam's Club for Vanguard Packaging & Display (www.vanguardpkg.com), Kansas City, Mo. That focus is “helping lead into further dialogue and discussions with the suppliers of Wal-Mart.”

The proof is in the packaging

The fruits of Wal-Mart’s drive for sustainability are apparent in the surge of environmentally friendly packages for food and other consumer goods on its shelves.

No longer a heavily discounted haven for private labels, Wal-Mart is moving swiftly into higher-end grocery products, such as organic dairy from the leading manufacturers.

Earlier this year, Superior Dairy Inc. (www.superiordairy.com), Canton, Ohio, began supplying Sam’s Club stores in several states with a new, boxy milk jug in place of traditional milk jugs.

The new package, which is more space efficient and stackable than traditional jugs, can be packed onto trucks more efficiently. And the new package, unlike the one it replaces, requires no crates for product protection. The square-profile, flat-top jugs are stacked with corrugated trays between each layer, and the stack is shrink wrapped.