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Large product containers and lightweight refill packaging reduce the overall quantity of packaging per unit of product, thus reducing our solid waste stream and pressure on landfills. Why then, doesn't a "green" company like Planet Inc. offer its products in large economical sizes or refill packages? |
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Environmentally "green" cleaners are not produced by major brand name companies with large promotional budgets. They are produced by smaller niche companies whose sales volumes and spending capabilities are much less than those of traditional mainstream brands. These niche companies, like Planet, must abide by different rules and limitations in order to survive in a marketplace that is dominated by the likes of Procter & Gamble and Arm & Hammer. Planet is a small independent company and we would incur major development and logistical costs if we tried to offer each of our products in various package sizes, or if we tried to adopt a few non-standard sizes. Worse, beyond the direct costs, there are serious doubts about how such strategies would be received in the marketplace. Something as simple as replacing smaller packaging with larger packaging is more easily said than done. One of the biggest hurdles is getting both consumers and retailers willing to accept the new larger packaging. When stocking their shelves, stores tend to place larger non-standard packages on more spacious bottom shelving. There, near the floor, products sit unnoticed by the general public except by informed, motivated customers. Consequently, sales for these products are low and the product fails to meet the store's turnover targets. Ultimately, the product is doomed to be discontinued, not because it was a bad product, but because it had non-standard packaging that caused it to receive bad shelf placement, which in turn led to poor sales performance. Marketing gambles like this are too risky for Planet, so we almost always choose to adopt industry standard packaging and sizing. Consumer price sensitivity is another factor in determining packaging sizes. On a per unit volume or per unit weight basis, larger bottles or cartons can be priced more cheaply than their smaller counterparts -- hence the term "economy size". Nonetheless, the fact remains that each larger bottle or carton is more expensive. And many people, when presented with a choice between infrequent large purchases and frequent small purchases, opt for the latter. They can save in the long run by buying in volume, however smaller packages represent a smaller immediate outlay. Frequently the short run "savings" mentality usually wins out. Customer convenience also figures into the relative market acceptance of different sizes of packaging. Larger sizes are sometimes not as easy or convenient to use. Many people find large bottles to be heavy, bulky and awkward to transport or handle. Also some people's homes are not large enough to accommodate large or "economy" sized products. To put this all in perspective, take our Ultra Liquid Laundry as an example. We originally bottled this detergent in 50oz. bottles because that was the standard size many years ago. The 50oz. size gave us our best chances for better consumer acceptance, favorable shelf placement, more frequent re-purchases, and higher turnover rates for the stores. In contrast, a larger 100oz. bottle would have been riskier because consumers need to buy 100oz. bottles half as often as 50oz., resulting in lower turnover rates. Products with lower turnover rates have a greater chance of being discontinued because stores assess products heavily on their turnover rates. So Ultra Liquid Laundry began its life in 50oz. bottles. But now, the marketplace has shifted predominantly to 100oz. liquid laundry bottles and the whole situation has flipped upside down. Why did the marketplace change? Because club stores, such as Costco, led a trend to larger sized packages. When the change to 100oz. liquid detergent bottles happened recently, Planet found itself under pressure from both consumers and stores to offer a 100oz. bottle as well. At that point, deciding whether to adopt a 100oz. bottle was no longer a choice between whether a 50oz. or 100oz. bottle would give us better placement and turnover in stores. It was a choice of survival, as many stores will no longer carry our 50oz. bottle. However in smaller markets, like health food stores, the smaller 50oz. bottle is still the preferred size because shelf space is limited. And so now our Ultra Liquid Laundry exists in two sizes, not because we felt the two different sizes were the best options for our consumers, but because unseen forces of the marketplace have basically dictated this situation for us. Simultaneously offering two sizes, or one regular size and a refill, seems like a good idea. How could giving the consumer more choice and more flexibility be a bad thing? The problem is not with the idea being good or bad, but rather with shelf real estate in stores being a very limited commodity and a commodity that stores are always looking to maximize profit from. When a single brand name tries to offer two sizes (or two "flavors" like scented or un-scented) of the same product, what happens is that total sales of that product splits between the two sizes. Stores view the two sizes of the same product as two different products (called a SKU). So in order for each of the SKUs to maintain the turnover rate that the product had before when it was only offered in one size, sales for that product must double. And because stores are always looking to discontinue products with low turnover rates with products with higher turnover rates, it's easy to see that dividing a strong selling product up into multiple less strong selling SKUs is not a good thing. For this reason, Planet almost always has just one size of any given product in a store because we cannot risk splitting sales up amongst several SKUs. We know that it is an apparent contradiction for a self-proclaimed "green" consumer products company to be shunning large containers and lightweight refill packaging when these packaging strategies clearly reduce the overall consumption of packaging materials. Ultimately though, as this essay has explained, there are many factors involved in the packaging issue. And what decisions we do make are really just reactions on our part to what has already been decided for us by consumer purchasing behaviors in stores and the buying decisions of the major grocery chains. Unfortunately, in the marketplace the environment does not always win out against convenience or lower prices. In order for us to keep our products on the shelves and available to you, we are sometimes forced to compromise. In an ideal world, yes we of course would like to be able to make our own packaging decisions independent of any marketplace forces and be able to offer the most environmentally sound product possible. However that is not the case. Despite some of the compromises that we must make in order to survive, we sincerely believe that it is far better to have environmentally friendly products like ours available with some excess packaging than not to have them available at all. The more awareness and visibility we can create in the marketplace for green products, the more influence and success green products will have in shaping that marketplace. The above arguments notwithstanding, Planet does want to eventually offer larger packages and refill options in our product line. As our sales and resources grow, we hope to gain the ability to introduce some larger economy sizes and refill packaging. This may initially occur through alternate distribution channels such as direct online ordering. Then you, our loyal customers, will have more choices and we can all score a small, but important, win for the environment! We hope that this has provided you with a new perspective to some of the packaging issues that we face as a small manufacturer. We thank you for taking the time to read this lengthy essay. If you've come this far, you obviously share an interest in this subject and are equally concerned about environmentally sound packaging strategies. The more people who understand how packaging decisions are made in the marketplace, the more we will all, as consumers, be able to make environmentally sound buying decisions. On a final note, keep in mind that we do make all of our bottles from a minimum of 25% post-consumer recycled HDPE plastic, which in turn can also be recycled. It is important to note that our bottles are indeed made from recycled material. Many brands label their plastic bottles as being "recyclable", however this just means that their bottles can be recycled. It doesn't necessarily mean that their bottles were actually made from recycled material. |
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