Are food companies taking a more in-depth look at the full life cycle of their products in an effort to minimize returns, damages and ecological impact?
Absolutely. More companies are coming to the realization that if these concerns are not addressed, the impact on the environment is measurable and in some cases irreversible.
Based on interaction with various clients, we have seen increasing concern regarding the final disposition of product. Several clients who were averse to considering liquidation and/or donation options for various reasons in the past, have begun such programs or are looking at doing so.
Additionally, several clients are challenging us to develop alternative disposal solutions (recycling options and/or reuse options) for products that have traditionally been disposed of in the trash or via incineration. As well, clients are focusing on reducing damages during distribution, thus reducing the number of products that must be returned.
Many clients are also looking for ways to add to the lifecycle of the product. In the past, the reclamation/returns center was considered the grave. That is not the case anymore. Instead clients are using the reclamation/returns center to give new life or extend the life of the product.
With the majority of returns falling into the categories of discontinued or seasonal, there is an opportunity to give this product rebirth by either putting it back into the primary market or into the secondary markets. From a profitability and environmental sustainability standpoint, this is a win/win.
Trading partners are also working together to meet sustainability goals. For example, returned product that comes from a specific retailer is being reworked by the manufacturer and then returned to the same retailer. This collaborative approach eliminates touches, optimizes inventory and minimizes landfill.
Are there any impending federal or local regulations regarding sustainability that companies need to be aware of?
Companies must be aware of not only impending regulations, but also of current regulations. Some of the current regulations are Bioterrorism and DEA listed chemical and hazardous waste requirements. These certainly provide incentives for companies to identify opportunities to recycle/reuse, donate or sell to secondary markets. These regulations dictate what companies can and cannot do with their product and encourage companies to find environmentally friendly alternatives.
Impending regulations that companies should be aware of surround the potential for a carbon market. If legislation is passed that places caps on the amount of carbon that companies can produce, we may see a lot of companies taking a more in-depth look at their entire carbon footprint. Not just the manufacturing and distribution process, but the end of life of the product as well.
This will likely cause more companies to consider having more of their products recycled/reused, thus generating a continuous life cycle verses the traditional cycle that exists now. Rather than the cradle-to-grave traditional cycle, it becomes more of a cradle-to-cradle cycle.
Regulatory requirements are complicated and ever-changing. Because most tend to focus on the forward side of the supply chain, many times the reverse supply chain isn’t fully addressed. While there are similarities, there are also many unique features associated with the reverse logistics supply chain that result in some of the regulations being difficult to apply.
Therefore, it is extremely important for your returns operation to be fully staffed with a regulatory team that can stay abreast of the continuous regulatory changes and to also interpret the impact to the returns operation. It is important to be on top of this in order for companies to remain compliant as regulatory requirements evolve.