OM in the News: Corporate Footprint Grows for Sustainable Packaging

Operations managers need to better understand modern consumer trends relating to sustainable products and packaging. According to McKinsey & Company (March 1, 2022), consumers believe that brands have as much responsibility as governments to create positive environmental change.

Over the past five years, there has been a 71% rise in online searches for sustainable goods globally, according to The Economist. Consumers are engaging with sustainable businesses in ways that they previously ignored. This trend isn’t just in first-world countries, please click on the graphic. Consumer satisfaction in developing and emerging economies is also tied to concerns around climate change, and many want businesses to commit to protecting nature and natural systems.

According to  McKinsey:

• Consumers often consider a company’s environmental footprint before purchasing products.
• 77% of the public thinks plastic is the least environmentally responsible type of packaging. Paper was deemed the most environmentally safe material.
• 66% of the public (and 75% of millennials) say that they consider sustainability when they make a purchase.

Customers now align themselves with brands that are compatible with their values and priorities. With environmental stability as a high priority for many people, it’s important that operations managers do their part to lower their carbon footprint. “The shift in consumer buying, with more consumers willing to pay extra for environmentally friendly products, reinforces the need for companies to increase their commitments to responsible business practices,” said the head of sustainability at a large consulting firm.

Industries and companies are listening to their consumers about what they want. Over 50% of C-level executives in the fashion and textile industry have claimed that consumer demand is driving their brands to create sustainable products and best practices. Many of these companies have been sourcing sustainably produced raw materials to create their apparel. The trend of sourcing organic and sustainable materials has also been seen in the food, cosmetic and pharmaceutical sectors. These industries have been making a concerted effort to use sustainable materials.

Classroom discussion questions:

1. What are some examples of successful product designs that are sustainable? (Hint: see pages 197-8 of your Heizer/Render/Munson text).
2. Why is corporate social responsibility becoming more broadly accepted in C-suites?