Wal-Mart puts pressure on suppliers to go green
have a gigantic ripple effect onprocessors, both in the packaging
and sourcing of their products.
This week the world's largest retailer said it would push its 60,000 suppliers worldwide to lowerthe amount of packaging they use by five per cent, start an aggressive program to require its fishsuppliers to use "sustainable" stocks, and slash energy use.
Wal-Mart is selling the program to the suppliers, who will have no option but to comply, byciting costs savings. The giant retailer said it will save $3.4bn a year in costs if five per centof packaging is cut out of the system.
"Packaging is where consumers and suppliers come together and can have a real impact both on business efficiency and environmental stewardship," said Wal-Martchief executive officer Lee Scott. "Even small changes to packaging have a significant ripple effect. Improved packaging means less waste, fewer materials used, and savings on transportation, manufacturing, shipping and storage."
Wal-Mart calculates the program will stop millions of pounds of trash from reaching landfills andreduce the amount of carbon dioxide entering the atmosphere by save 667,000 metric tons.
"This is equal to taking 213,000 trucks off the road annually, and saving 323,800 tons of coal and 66.7 million gallons of diesel fuel from beingburned," the retailer claimed. "This initiative will also create $10.98 billion in savings, just from a 5 percent reduction in 10 percent of the global packaging industry."
On November 1 this year Wal-Mart plans to introduce a packaging assessment programme to its 2,000 private label suppliers.The program will allow Wal-Mart buyers to be aware about packaging alternatives or more sustainable packaging materials, allowing them to make better purchasing decisions.
On February 1 next year the retailer will make the tools and processes available to all of its global suppliers.The 12 month process will push suppliers toward sharing results. Beginning in 2008, Wal-Mart will measureits entire worldwide supply base to gauge the progress they are making in meeting the five per centtarget, whether they are using more environmentally friendly materials in packaging, andwhether they are sourcing their such materials more efficiently.
"When you bring the capabilities of the entire supply chain together, the ability to make a difference reallypops," Scott stated in an announcement about the programme. "There's a multiplier effect. Instead of just looking at what Wal-Mart can do alone, we have the opportunity to inspire thousands of companies and millions of customers, as well."
Last year Wal-Mart tested the packaging reduction programme on suppliers of its private label Kid Connection toy line. By reducing the packaging on fewer than 300 toys, Wal-Martestimates it saved 3,425 tons of corrugated materials, 1,358 barrels of oil, 5,190 trees, 727 shipping containers and $3.5m in transportationcosts over the year.
Now Wal-Mart applying what it learned from the Kid Connection test and applying it to about 160,000 products that are seen globally by 176 million customers each week.
A group of 200 packagers worldwide is co-operating with Wal-Mart on the project. The group also includes representatives from government,non-governmental organisations, academia and industry.
Last month Wal-Mart said it would begin using the Marine Stewardship Council's (MSC) independent blue eco-label on ten fishproducts. The label would help consumers to identify seafood from fisheries that meet the MSC's strict environmentalstandard.
"We have set a goal to procure all wild-caught seafood for North America from fisheries certified by the MSC within the next three to five years and this is the first step toward thatgoal," the company stated on 31 August.
Rupert Howes, chief executive of MSC, said the Wal-Mart commitment was Stores as a major milestone in the company'sdrive to cater to customers who are environmentally conscious.
"The range and volume of MSC eco-labeled seafood products on Wal-Mart's shelves are set to increase significantly over the coming years as more suppliers meet our requirements for processing and handling sustainable seafood," said Howes. "Furthermore, Wal-Mart supply fisheries have begun to engage in the early stages of the MSC assessment process."
In February 2006, Wal-Mart pledged to source all of its wild-caught fresh and frozen fish for the North American market from fisheries that meet the MSC's independent environmental standard. The first productsarrived on Wal-Mart's shelves in April from Beaver Street Fisheries and AquaCuisine.
