New packaging rules force more chain cooperation

New packaging rules force more chain cooperation

The government is introducing more and more laws and regulations to reduce the negative impact of packaging on the environment. What packaging information is needed to comply? And how should we exchange that information with each other? That business is struggling with these questions is evident from the enormous interest in GS1 Netherlands' information meeting on packaging information. The recurring message in all the lectures: we need more cooperation in the chain.

This article appeared earlier on www.duurzaam-ondernemen.nl.

There is a negative image around packaging. The general public only sees the mess and the mountain of waste that packaging causes, while the business community's first thought is of all the laws and regulations that packaging must comply with. Mirjam Karmiggelt, CEO of GS1 Netherlands, prefers to turn the image around. "Let's see this as an opportunity and together ensure that we recycle packaging more often, throw it away less and thereby make our world more sustainable," her appeal at the start of the meeting reads.

This requires a strong piece of rethinking. Michiel van Yperen, sustainability manager at GS1 Netherlands, points to the Dutch government's goal of reducing the amount of residual waste to thirty kilograms per person by 2025. "If we want to achieve that, we really need to start thinking differently about packaging. We all know the examples of products ordered online in a shipping box that is far too large. Or of bananas or avocados that have already been packaged very well by nature and are still put in plastic. All nonsense."

Pulling together and thinking around

Multiple packaging in particular is a thorn in Van Yperen's side. He shows the example of individually wrapped candies put together in a cheerful party package. "With that you can really stand out as a consumer, but you are left with a huge mountain of packaging. If we get out of our silos and work together with our partners in the circular chain, we can come up with alternative packaging that offers the same functionality while being a lot more sustainable."

Rethinking - "rethink" in English - tops the R ladder of strategies that contribute to a circular economy. Other strategies include reduce, reuse and recycle. "Reduce is about reducing packaging. The best is when we don't need any packaging at all, like with fruits and vegetables," Van Yperen said. "Examples of reuse we can see in supermarkets where people can fill their own packages with rice, grains or nuts from dumpsters. Recycle is almost at the bottom of the R ladder.

New European legislation

To encourage sustainability, the government is coming up with more and more policies for packaging. Think of the Ecodesign for Sustainable Product Regulation (ESPR) and the Packaging & Packaging Waste Regulation (PPWR). GS1 Netherlands, together with the Dutch Packaging Center (NVC), is forming a think tank to help businesses prepare for this legislation. "Among other things, this legislation deals with design principles for sustainable packaging, the use of harmful substances in it and the reusability and recyclability of packaging," says Jan Merckx, sustainability project leader at GS1 Netherlands.

An important question is what packaging information companies must provide to demonstrate compliance with the legislation. "On that front, the PPWR is leading," Merckx states. "The ESPR is only relevant if certain product groups with specific packaging require additional measures. For electronics, for example, an additional requirement regarding the ratio between the dimensions of the product and the packaging is likely to follow. In addition, the ESPR is not only about finished products, but also about intermediate products such as steel, paper and plastic. In that area, too, the ESPR may result in additional requirements.

Digital product passports

Another question is how industry should access that packaging information. The answer to that comes from the ESPR, which states that every product must have its own digital product passport. This should include packaging information. "Europe demands a fully interoperable system in that regard. That means that one passport must be able to talk to the other passport. GS1 has already developed the standards for that," Merckx says.

Director Michael Nieuwesteeg of the NVC reiterates the importance of packaging information. "With our packaging we create chaos. We don't know where our packaging stays and what happens to it. To create order out of the chaos, we desperately need that packaging information."

Reusable tray for plants

An example of a digital product passport comes from the flower and plant industry. Under the name Euro Plant Tray, thirty parties from six countries are working together to introduce a reusable tray for transporting plants. Until now, the industry has been using disposable trays for this purpose, an estimated 500 to 700 million per year. "We have now designed two trays, set up a rental model and issued a tender for a pool partner. By summer 2024, the first trays should be in circulation," explains Euro Plant Tray managing director Dirk Bansemer.

The tray features a GTIN and RFID tag, which are linked to the digital product passport developed by R-Cycle. "In the future, we will only need more data with a higher level of detail. Retrieving that data back in the chain is time-consuming and costly, in part because this process is not standardized. Digital product passports are the answer to that."

More capture at Waste Fund

One of the parties requiring more and more packaging information is the Waste Fund. This body carries out the obligation on behalf of industry to collect, transport and recycle packaging. Retailers must report to the Waste Fund how much packaging they put on the market and pay a waste management fee for it. The single use plastic (SUP) legislation has greatly expanded the number of packaging categories, making the declaration complex. "With the arrival of the PPWR, we will soon have to record even more information," foresees Paul Christiaens, senior business analyst at the Waste Fund.

In addition, the Waste Fund faces the task of making rates dependent on the extent to which packaging is recyclable. "What the European regulations will look like is still unknown," Christiaens explains. "But what is already certain is that we will have to register all packaging units. That could be a sales unit such as a bottle of soda, but that's not the only packaging. That bottle might be in a box and that box is again on a pallet. A total of thirty different packaging categories have been defined that must be registered separately. Next year, with in the Netherlands, we will already make a start with tariff differentiation. Those who want to qualify for this will then have to provide more data."

Apart team for packaging data

In particular, retailers are seeing a huge increase in the amount of packaging information. Because of the complexity, Albert Heijn has decided not to transfer responsibility for this to the existing product information team, but to set up a separate team. "We have expanded our central system for private label products to include data fields for packaging information. That enables us to make all kinds of analyses and identify which suppliers and which packaging we need to work with in order to achieve our targets," says Viktor Bos, responsible for product data within Albert Heijn.

It has taken Albert Heijn two years to capture almost all the packaging information of our 10,000 private label products. "This proves that this requires a huge investment in time and money, not only from us but also from our suppliers. To get the information in order, we had to contact our suppliers an average of seven times per product. With outliers of up to sixteen times," Bos states. He urges suppliers of the rest of the assortment to share packaging information as well. "Make as much use of GS1 Data Source for that as possible."

Cooperation and standardization

Capturing and providing packaging information is extra complex for companies that operate in different countries. HEMA has stores not only in the Netherlands, but also in Belgium, Germany, France and Luxembourg. "And everywhere we have to deal with different legislation," says category support manager Ingmar Hensbergen. "The pressure on us as retailers is growing. Cooperation and standardization is necessary to meet the obligations. Especially in the area of standardization, we as HEMA have to take a big step."

Until recently, HEMA mainly used Excel to record packaging information, but that is no longer doable with an assortment of 35,000 items. Meanwhile, the department store has implemented a product information system. "With this we can meet new needs for packaging information. We need to start recording data in a standardized way so that we can share that data more easily with the government and others. But we do notice that those standards within Europe are not yet fully aligned."

GS1 Data Source

GS1 Data Source is the platform that (packaging) suppliers and retailers can use to share the necessary packaging information with each other. "We have a data model, to which we added additional data fields in May, including for the percentage of recycled material and the use of single use plastics," says Jan Schimmel, project manager at GS1 Netherlands. "This data model follows developments. For example, we are currently investigating what the price differentiation of the Waste Fund and the introduction of the PPWR legislation means for our data model. Instructions and input examples are available on the website, so chain partners can get started exchanging packaging information."

Learning expedition

GS1 is doing more. In order for packaging information to be used for packaging recycling, the packaging itself must have a unique identifier (GTIN). GS1 has started a project where a GTIN is actually affixed to packaging. "We want to look at how that packaging and packaging information flows through the chain. Does it work? What are we running into? And what can we learn from it?" says Janneke van den Broek, sustainability program manager at GS1 Netherlands.

In addition, GS1 has set up a 'learning expedition' in which various chain parties exchange knowledge and experiences. Participants include packaging producer Hordijk and fruit packer Fruitmasters. "We already record information such as the type of material, color and weight. But a lot of data is still missing, such as the origin of raw materials, the share of recyclate and the CO2 footprint. Determining what data in what form we will need in the future is difficult," says Jochem Kuipers, buyer at Fruitmasters. Annelie Verstraaten, strategic marketing development manager at Hordijk: "The complexity is not only about data, but also about definitions. With plastic packaging, we are dealing with many different types of raw materials. We will have to make further agreements about how we register these."

Recording it right the first time

In her closing remarks, Karmiggelt reiterated the steps we need to take. First, we need to start thinking around introducing more sustainable packaging. Second, we need to collect and record information about that packaging. We can unlock that information from the source if we can unambiguously identify packaging. Through GS1 Data Source, we can share that data with customers, who can use it to prepare sustainability reports and file reports with the Waste Fund, among others.

"The main message from this meeting is that we need to cooperate more," Karmiggelt concludes. "The packaging information we need, we need to collect from partners back in the chain. If all goes well, that information is already known where the packaging is made. That information should not stay within the four walls of the packaging manufacturer. My dream is that we capture that information properly at once, so that we can share it with each other in the chain. Chain cooperation is the only way forward."