Summary
Health-minded consumers, especially Generation Z, value nutraceutical companies with sustainability embedded into their corporate philosophy – from product development to packaging. This article discusses how responsible companies are responding to the consumer call for greater sustainability by implementing environmentally friendly manufacturing practices that ultimately lead to waste reduction, improved supplier communications and lower supply chain risk. Those who have taken steps to demonstrate a genuine commitment to sustainability are standing out with improved outcomes for all.
Introduction
Driven by universal factors such as growing consumer awareness and a general sense of enthusiasm for improved health and preventative care, the rise in lifestyle-related issues such as insomnia, stress and anxiety, combined with consumer preference shifting to self-directed care, the global nutraceuticals market has experienced significant growth. Some industry sources suggest the nutraceuticals market value will continue to increase at an almost 10% CAGR between 2024 and 20301, which is close to double some growth projections for pharmaceuticals over the same time period.
People are becoming more health-conscious in general, and younger generations – in particular Generation Z (“Gen Z”) and Millennials, who collectively include those who are 12 to 43 – lead this movement. Artificial intelligence (AI) is expected to positively influence demand further by enabling personalized solutions to consumers based on their dietary and health data.
Both tech-savvy and well informed, these groups are more powerfully influenced by responsible stewardship and sustainability. According to a survey by the World Economic Forum, Gen Z is the most active group related to the planet’s well-being, and they often influence others to make “sustainability-first” buying decisions. To that end, approximately 75% of them prefer to buy sustainably rather than trust a brand name. 2
Additionally, Millennials and Gen Z are willing to put their money where their mouth is when it comes to sustainable living 3 making them attractive targets for companies that differentiate their products from a sustainability perspective.
Holistically Sustainable
Alongside legislative pressure and a general scarcity of supply, consumer pressure is one of the main drivers for nutraceutical companies to become more sustainable.4 By taking a holistic view of the full supply chain – including factors like supplier networks, raw materials and ingredients, manufacturing, and ethical standards – nutraceutical companies can ensure that they have considered every opportunity to make their products more sustainable (and even avoid negative attention that may otherwise compromise brand reputation for years to come).
Supply Chains
One of the most valuable lessons companies took from the COVID-19 pandemic was to look more deeply into their full supply chains, beyond simply their direct suppliers. At that time, it helped companies avoid supply risks like shortages due to travel restrictions and enhanced border controls. Now, responsible companies who retained that improved understanding of raw materials and general sourcing have a better grasp on the carbon footprint created and accumulated, from supply sourcing to point of use. They are also more mindful in choosing ingredient suppliers with robust supply models. With this increased awareness, manufacturers are better able (and more likely to be) selective in developing existing supplier relationships and bringing on new ones, choosing suppliers that help them meet their goals including those with sustainable agricultural or ocean harvest practices, and avoiding those who contribute to deforestation, use excessive water, or inadvertently ensnare marine animals.
To this end, nutraceutical manufacturers with global manufacturing and broad supply networks have been able to provide manufacturing and finished-goods locations that are closer to key raw ingredients, like excipients, significantly reducing or avoiding the need for lengthy shipping routes and thus minimizing environmental impact.
Sustainable Manufacturing & Packaging Practices
The manufacturing environment is a consideration in determining whether a product is “green” or not, yet historically, manufacturers have shared very little about their processes. However, that is changing, in nutraceutical companies specifically. Nutraceutical manufacturers have made great progress in reducing the impact on the environment in their manufacturing processes. They are also more willing to not only share news about their progress, but will generally make public commitments towards achieving sustainability goals.
In the manufacturing process itself, taking a circular approach to sustainability means that the use of energy and other important resources can be significantly reduced through careful stewardship. This includes simple initiatives like automatic lighting in areas that are sometimes not in use, reengineering processes to reduce water and gas consumption, and reusing water in production.
One company taking sustainability seriously is Colorcon. Take their recent acquisition of Airnov Healthcare Packaging, a controlled atmosphere packaging manufacturer who have actively embraced initiatives to convert secondary packaging from plastic to cardboard without sacrificing performance in any way. Traditional plastic containers are more difficult to recycle than carton boxes, chiefly because they are made from non-renewable polymer resins and are difficult to compact after use. Cardboard, on the other hand, is widely recognized as a recyclable material that naturally decomposes quickly.
By switching to carton-based secondary packaging, this new division of Colorcon, called Functional Packaging, will be able to pull hundreds of tons of plastic out of its operational processes every year. In addition, by exploring cardboard alternatives – which are Forest Stewardship Council (FSC) certified, sourced from local forests, and are lighter in weight and therefore more space efficient – Colorcon is optimizing their transportation and storage practices, too. These initiatives aim to reduce transportation emissions by using double-stackable cartons, which are designed to be more durable than standard cardboard, allowing pallets to be double stacked with 50% more material in the same footprint as a single pallet.
By adopting these storage and transport containers, Colorcon facilities are helping customers reduce freight costs, reduce waste, and lower carbon emissions.
Ingredient Labels
Informed consumers are more likely than ever to read and understand ingredient labels and will often look for more sustainable, clean label sources. They may also look for certifications that conform,
for example, with lifestyle choices or religious practices. These may include vegan or organic certifications. But nutraceutical manufacturers and excipient suppliers like Colorcon need to assure reliable supply too, often leading to difficult decisions unless a strategic solution can be found.
For example, the Roundtable on Sustainable Palm Oil (RSPO), a global non-profit organization with voluntary members, provides certification for palm oil that conforms to certain standards of sustainability, environmental impact, and protection for workers’ rights; but with global demand for palm oil remaining high, it is very difficult to source RSPO-certified oil from its volunteer members.
To avoid trading reliability with sustainable supply, Colorcon has instead reformulated one of their organic film coatings to use sunflower oil instead of palm oil, thus avoiding the potential for sustainability to be compromised should demand for certified palm oil outstrip supply.
When it comes to making environmental claims on goods and services, there are important principles to consider. These principles help businesses comply with consumer protection laws and ensure that environmental claims are accurate and transparent.
Claims should be:
- Truthful and Accurate: Businesses should make truthful and accurate environmental claims about their products and Misleading consumers is not only prohibited in most markets, but it also puts a company at risk of damaging trust in its brand.
- Clear and Unambiguous: Environmental claims must be clear and easy for consumers to understand, avoiding vague or confusing language.
- Full Life Cycle Consideration: When making claims, the full life cycle of the product or service should be considered. This includes production, use, and disposal.
- Substantiated Claims: Claims should be backed by evidence. If you claim a product is environmentally friendly, you should be able to prove that These principles protect both consumers and businesses, creating a level playing field for genuinely eco-friendly products.
Ethics
A company’s ethics underwrite its actions and arguably, have never been so visible to consumers across all markets, including nutraceuticals. But ethical practices make good business sense too and companies that prioritize workers’ conditions, equality, education and development are more resilient, with reduced time lost due to accidents and improved efficiency and productivity overall.
In 2022, Colorcon began using the EcoVadis Corporate Social Responsibility (CSR) methodology to measure the quality of its CSR through multiple facets, from policies and actions to company results. EcoVadis scores the company across four broad areas that reach deep into the business including environmental, labor and human rights, ethics, and sustainable procurement. With consumers’ increasingly aware of companies’ attempts to gain advantage through ‘greenwashing’, establishing an independent benchmark of performance should provide people from outside of the organization with assurance that Colorcon is making a genuine, deep commitment to meeting their sustainability goals, and demonstrating a willingness to share long-term progress.
In closing, I think we can all agree that a commitment to sustainability is not just good for the planet; it’s good for businesses, too. By embedding sustainable practices deep into an organization, like Colorcon has, companies are able to create long-term value for stakeholders and ensure that it will thrive for years to come.
References
- grandviewresearch.com
- How Gen Z’s sustainability concerns are influencing others | World…….. https://www.weforum.org/agenda/2022/03/generation-z-sustainability-lifestyle-buying-decisions/
- Nutraceuticals Industry ESG Study, Challenges & Policies Report. https://astra.grandviewresearch.com/nutraceuticals-industry-esg-outlook
- How to position your sustainable nutrition product in a cost-of-living……… https://www.nutraceuticalbusinessreview.com/news/article_page/How_to_position_your_sustainable_nutrition_product_in_a_cost-of-living_crisis/207511
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