Who Must Bear The Cost Of Bio Degradable Packaging
- Eco Friendly Products
- January 6, 2020
Many companies in the food service industry have made an effort to become more environmentally friendly, also known as “going green.” Reasons for going green can include achieving better public relations, tapping into the growing green market or even because the company may simply feel it is the right thing to do to help protect the environment. Becoming an eco friendly company can involve changes to lessen greenhouse gas emissions, use bio degradable packaging, protect ecosystems, or all of the above. However, there can be a number of disadvantages to going green for corporations.
Going green can help protect the earth’s natural systems. For businesses however, it often means bearing extra costs that can be quite difficult to absorb. It can be particularly difficult for a company to go green initially. For example, the switch to Bio Degradable packaging for a small restaurant or caterer will increase the cost of packaging by 10%. This essentially means that the companies would be paying more than what they were paying for packaging previously. If the restaurant compensates for this by increasing the price of their products, this could in turn result in loss of Sales. Therefore passing on the costs to the consumer is not the best option.
This brings us to our question. Who must bear the cost of becoming Eco-Friendly or Is “Going Green” even worth it?
The first part of the question is a bit difficult to answer. While a majority of the people do care about this initiative, the question is, are they willing to pay for it? In majority of the cases, the answer is ’NO’.
We conducted a survey in Ireland with 1000 consumers who frequented certain restaurants and take-outs that were still using single use plastic packaging. Off the 1000 people who participated in the survey, 70% of the people were of the view that these restaurants needed to start using eco-friendly packaging. The remaining 30% were indifferent to the whole cause. However when faced with the fact that this could result in Increased prices, a staggering 30% of people changed their mind.
So now the onus is on the corporation to absorb the costs of going green. In our experience of dealing with businesses, not too many companies are willing to accept these additional costs.
However the costs are not too significant if we do the math.
A Plastic container would cost 10.8 cents on average in the current market. A similar sized Bio degradable container would cost 11.8 Cents per container. So if we look at the increasing cost on a “container by container” basis the costs are not too significant since an average meal in one of these containers would cost around €9.99 for the customer. So a 1 cent does not affect the budget a whole lot. However it is quite difficult to explain this to a business owner as everyone is looking to save a cent.
While there are a lot of government programmes to promote Green packaging, there is not enough incentive for anybody to really go through this process. At this moment the costs remain too high in the opinion of business owners to make the switch.
Then there remains this issue of causing irreversible damage to the environment.