Wal-Mart yesterday announced the online rollout of a "green" ratingsystem for the packaging used by all of its product suppliers, onethat will eventually determine who can sell to the world's largest retailer.
About 2,000 private label suppliers to Wal-Mart began imputing dataon the packaging they use for their products into the groundbreakingsystem yesterday.
The creation of the packaging rating system is asignificant part of the bid by the retailer to become moreenvironmentally-friendly and meet the demands of its customers.
Amy Zettlemoyer, director of packaging for the company's Sam's Clubnetwork of stores told a packed audience here at PackExpo that othersuppliers will have to begin using the system later next year.
The company's "substainable scorecard" system is a bid by theretailer to push up to 60,000 of its suppliers worldwide to lower theamount of packaging they use by five per cent, use more renewablematerials and slash energy use.
Those that make efforts to change their packaging and productstowards meeting Wal-Mart's goals will be ranked at the top of the pileamong their competitors, making them the preferred supplier.
Those that do not, will face regulation to the lower ends of theranking and the possible possible loss of their business withWal-Mart.
Suppliers will move up or down the rank in their product categorydepending on any changes they make, or that their competitors makeahead of them.
Matt Kistler, Wal-Mart's vice president of package and productinnovations, said the move toward sustainable packaging marks asignificant change by the retailer away from choosing suppliers solelyon price.
Wal-Mart is selling the program to the suppliers, who will have nooption but to comply, by citing costs savings. The giant retailer saidit will save $3.4bn a year in costs if five per cent of packaging iscut out of the system.
A separate scorecard ranking system for packagers was also unveiledyesterday. Packagers will input their data and move up or down theranking in a similar manner to the rating system for Wal-Mart'ssuppliers.
The online system will then direct suppliers toward the top ratedpackagers who can help them meet Wal-Mart's targets.
Suppliers can take a peak at the beta version of the onlinescorecard system for their products at www.scorecardlibrary.com.Packagers can test out the system built for them atwww.marketgate.com/packaging.
The programme to cut five per cent out of its suppliers' packagingmaterials will stop millions of pounds of trash from reachinglandfills and reduce the amount of carbon dioxide entering theatmosphere by 667,000 metric tons, Wal-Mart calculates.
"This is equal to taking 213,000 trucks off the road annually, andsaving 323,800 tons of coal and 66.7 million gallons of diesel fuelfrom being burned," the retailer claimed earlier this year inoutlining the programme. "This initiative will also create $10.98billion in savings, just from a 5 percent reduction in 10 percent ofthe global packaging industry."
On February 1 next year the retailer will make the tools andprocesses available to all of its global suppliers.
The 12-month process will push suppliers toward sharing results.Beginning in 2008, Wal-Mart will measure its entire worldwide supplybase to gauge the progress they are making in meeting the five percent target, whether they are using more environmentally friendlymaterials in packaging, and whether they are sourcing their suchmaterials more efficiently.
Last year Wal-Mart tested the packaging reduction programme onsuppliers of its private label Kid Connection toy line. By reducingthe packaging on fewer than 300 toys, Wal-Mart estimates it saved3,425 tons of corrugated materials, 1,358 barrels of oil, 5,190 trees,727 shipping containers and $3.5m in transportation costs over theyear.
Wal-Mart plans to apply what it learned from the Kid Connectiontest and applying it to about 160,000 products that are seen globallyby 176 million customers each week.
About 200 packagers and other interested groups worldwide areco-operating with Wal-Mart on the project. The group also includesrepresentatives from government, non-governmental organisations,academia and industry.
In August this year Wal-Mart said it would begin using the MarineStewardship Council's (MSC) independent blue eco-label on ten fishproducts. The label would help consumers to identify seafood fromfisheries that meet the MSC's strict environmental standard.
In February 2006, Wal-Mart pledged to source all of its wild-caughtfresh and frozen fish for the North American market from fisheriesthat meet the MSC's independent environmental standard. The firstproducts arrived on Wal-Mart's shelves in April from Beaver StreetFisheries and AquaCuisine.