“P&G announces several majororganization changes with thecreation of category managementand a product supplysystem which integratespurchasing, manufacturing,engineering and distribution” P&G History
Before we explain the solution let’s first discuss plastic and why using it for packaging is harmful (Need to go more in depth)
Will find article for 2011Second bullet point -- not for heat, energy, and transportation used in making and selling – also, 4% is a lot in regards to the total used
Based on 2006 statistics
Starch based bioplastics are usually made from
Last bullet--Blends of starch and other plastics are
Presentation Topics• History• Background – Environmental • Impacts – Social • Stakeholders involved • Government policy – Economic • Corporate overview • Industry analysis• Solution – Environmental – Social – Economic• Challenges
History of P&G • October 31, 1837, Procter & Gamble was born – William Proctor, a candle maker from England, and James Gamble, a soap maker from Ireland • 1859 sales reached $1million • 1862 supplied Union Army with soap and candles • 1879 Ivory • 1919 P&G sells directly to retailers • 1920-1930 sponsor radio programs – “soap operas”http://www.pg.com/translations/history_pdf/english_history.pdf
History of P&G • 1930 acquire Thomas Hedley in England • 1931 Brand management is born • 1933 Synthetic detergent • 1946 Tide • 1947 Prell shampoo • 1955 Crest with fluoride • 1957 purchase Charmin • 1960 “Downy” fabric softener • 1972 “Bounce” fabric softener sheets • 1987 Celebrates 150th Year Anniversaryhttp://www.pg.com/translations/history_pdf/english_history.pdf
P&G 1987: Repositioning Lenor Fabric Softener Promised to reduce packaging on Lenor fabric softener by 85%• Tight guidelines on packaging Lenor West Germany• Environmentally friendly is the largest • 75% if West German and promotion• Retailers “10 commandments” Regulations Fabric fabric softener market in households line-dried their laundry• Government• Environmental Softener Europe • Lenor’s sales volume decline 7.5% annually and was predicted to continue • 4-from-one concentrate Lenor refill • Laminated cardboard carton (similar package to milk carton) • Stan-alone soft plastic package “doypack pouch” • Waste reductio • Less packaging • Reusable
Why?Environmental Social Economical• Shift from defensive • Understanding their • Stem eroding sales thinking towards customer’s needs volume and market proactive and successful • Taking all stakeholders share approaches into consideration
Once upon a time… Increasing waste outputsChernobylEnvironmental concerns spiked due to….. Dense population sizesScarce natural resources Limited lands
Lenors’s contribution to the problem• 5% Softening ingredients and 95% water• Packaging in hard, high density polyethylene plastic containers• Focus more on Price/Scent vs Environmental
Then the European Nation Took Action… 1986 survey of 11,8000 Western, 72% where concerned about problems such as acid, rain, landfill capacity, and the greenhouse effect Implemented Waste Avoidance Utilization, Avoidance, Utilization, and Disposal Act By 1985, West Germans recycled more than ⅓ of waste... The Blue Angel Program was implemented
Lenor in Response• Lenor applies refill pack• Receives great responses, however questions the popularity if implemented nationally….• Concentrate Exist Today
Economics: Lenor Packaging Case Proctor and Gamble
ECONOMIC PROBLEMBetween 1984 and 1986 Lenor’s sales volume fell 7.5% annually due to:1) Aggressive competitive pricing2) Eroding Brand Image3) Shrinking Market due to Environmental concerns.
Lenor in East Germany• Dominated East Germany with 37% Market Share• Selling Lenor’s Iconic Blue 4 liter Bottle• Consumers Differentiate product on Price/Scent• Price Wars drove average profit margin from 12.7% in 1984 to just 2.5% in 1986• 98% store penetration by 1987
Rethinking a Titan• New Packaging vital for P&G’s Bottom line• Must become more environmentally sensitive in order to appeal to the East German Market• Implications for their 5 Billion Consumers worldwide
Plastics • Moldable type of organic polymer • Petroleum based • Two types: – Thermoplastics • Become a liquid when heated • Can be molded & cooled many times with no degradation • Softer than thermo-set • Easier to recycle than thermo-set – Thermo-set plastics • Can only be molded once • Bulky short molecules • Decomposes after being re-heatedhttp://www.wpi.edu/Pubs/E-project/Available/E-project-031609-205515/unrestricted/bioplastics.pdf
Manufacturing Plastics Environment • In 2007: – 92,835 million pounds - thermoplastic – 4,838 million pounds – thermoset • Energy: – Oil used to make plastics is 4% of total oil consumption (87.2 million barrels a day) – 4% only accounts for plastic feedstock selling plasticshttp://www.wpi.edu/Pubs/E-project/Available/E-project-031609-205515/unrestricted/bioplastics.pdf
Manufacturing Plastics Environment • Energy: – Plastics industry in the United States consumes about 6% of all the energy used by American industries – In 1998, rubber and plastics product manufacturers used 320 trillion Btu – 320 trillion Btu is approximately $3.5 billion • Co2 Emissions: – In 1994, U.S. plastics industry was responsible for 4.7 million metric tons of carbon dioxide emissions.http://www.wpi.edu/Pubs/E-project/Available/E-project-031609-205515/unrestricted/bioplastics.pdf
Manufacturing Plastics Economic • Plastics facilities in the U.S. 18,585 • Employees of the plastics industry 1,130,300 – Worker wages of the plastics industry $28,356,100,000 • U.S. plastic sales $378,830,000,000 • Exports from the U.S. $43,040,000,000 • Imports to the U.S. $37,580,000,000http://www.wpi.edu/Pubs/E-project/Available/E-project-031609-205515/unrestricted/bioplastics.pdf
Manufacturing Plastics Social • Health risks associated with plastics do not come from plastics themselves but from additives like plasticizers – Certain plasticizers have found to be both carcinogenichttp://www.wpi.edu/Pubs/E-project/Available/E-project-031609-205515/unrestricted/bioplastics.pdf
What are they made of? • Bioplastics are plastics made out of biopolymers – biopolymers are polymers that come from a biological source. • Bioplastics can be made using plant, animal, or bacterial sources: – wheat, corn, rice, potatoes, barley, and sorghum. – Natural oils from soy and palm – Bacteria – Genetically engineered organismshttp://www.wpi.edu/Pubs/E-project/Available/E-project-031609-205515/unrestricted/bioplastics.pdf
Starch Based Bioplastics • Account for 80% of the bioplastics market – Pure starch can absorb water from the air and degrade. – Organisms can also metabolize pure starch, as it is a carbohydrate. – The fact that starch disintegrates in liquids makes it ideal for drug capsules. – Used to make: • plant pots • drinking cups • disposable shopping bags • Cutlery • coated cardboard • diaper foil.http://www.wpi.edu/Pubs/E-project/Available/E-project-031609-205515/unrestricted/bioplastics.pdf
Environmental Implication of BioplasticStrengths Weakness• Cheaper than plastic productions • P&G products are not well known for• Emits less carbon dioxide. having green laundry products. Rusty• Easily recycled since the 90s BioplasticsOpportunities Threats• New green perception from customers • Gets contaminated when petro plastic mix• Will becoming a major well known in pioneer for using biodegradables • Has potential to effect food supply
Can a Packaging shift appease the economicsegment of the Triple bottom line?THE ECONOMICS OF BIOPLASTICS
Current Realities• 3.49 million barrels of oil a day are converted into plastics.• 99% of plastics come petroleum. Ethylene, propylene and Styrene are extracted directly from crude oil.• Current rigid plastic containers such as the Lenor 4 li. and 1 li. Concentrate will take millions of years to biodegrade.
Economic Uncertainty• Yet the environmental and social benefits are meaningless if bio plastics are economically unfeasible.• PLV is 20% more expensive than current petroleum based plastics.
• How will bioplastics impact dependence on and consumption of fossil fuels?• How will a switch to bio plastics negatively effect primary commodity markets?
• In 2009 the United States Generated 30 million tons of plastic waste.• 11 million tons was durable plastic such as that used in the packaging for Lenor’s 4li and 1li. Fabric Softener.• Only 7% of all plastic waste was recovered for recycling.