Packaging

In this topic

What it is | Why it matters | Who it matters most for | What you can do

How to know if it's working | What the jargon means | How to learn more

What it is

Boxes, bags, containers, tape: packaging turns up in almost every business, whether you're posting orders, serving takeaway, or bagging retail products. It’s what protects your goods in transit and gets them into your customer’s hands.

But not all packaging is equal. Some things pile up in bulk and go straight to landfill. Some can be returned, reused or repurposed. And some is streamlined, made with recycled paper, or can be put in your home compost bin.

This guide looks at the packaging you use to send finished products to market or your customers’ homes, like delivery parcels, bulk shipping, takeaway containers and shopping bags, and the practical steps you can take to choose better packaging. See also the how-to guide on products and sourcing.

Why it matters

Most packaging is used once and then discarded, often ending up in landfill or waterways, especially where proper waste management isn’t in place.

Plastic packaging in particular doesn’t break down, and even highly recyclable types like PET are not always recycled due to low demand for the material. The result is piles of plastic end up in our landfills or find their way into our environment and wildlife. Once in landfill, materials like cardboard and paper break down into a potent greenhouse gas, methane.

Producing packaging also uses energy and resources. That means all that excess bulk of packaging in the bin represents unnecessary trees cut down, oil turned into plastic, and energy use and pollution from manufacturing.

Small businesses generate a large share of takeaway and parcel packaging. On the positive side, they also have the flexibility to make changes quickly. Better packaging choices also reduce material costs, shipping costs and customer complaints and show you're taking action to be more responsible.

Source: OECD 2022, UNEP 2023, Minderoo Foundation 2023

Who it matters most for

Businesses that send lots of parcels, serve takeaway food or transport goods have the biggest impact. Packaging piles up fast when you have to protect your product as it’s moved from here to there.

Even if your business only uses a little, like shopping bags and gift wrap, you can still make better choices. Packaging is one of the most visible ways to show your customers you care about your impact on the world.

What you can do

Here are some practical and impactful ways you can address packaging issues in your business.

Understand sustainable packaging principles

Ecommerce and shipping

Transport and warehouse packaging

Takeaway food and drink packaging

Shopping bags and customer carry packaging

Product packaging

Understand sustainable packaging principles

It’s easy to be misled by vague claims about 'sustainable' or 'eco-friendly' packaging that aren't always better for the environment. So it's important to understand what to look for.

Sustainable packaging includes many different considerations but, at its simplest, it's about two things: materials and design. It’s about what materials you use in your packaging – like cardboard, plastic, tape and polystyrene – and what you do with them – such as minimise the amount or design them to be recycled or reused.

When it comes to materials, it's important to look for recycled or renewable materials. Given packaging is often short-lived, it's a perfect use for these materials, including making use of waste that would otherwise go to landfill and avoiding non-renewable virgin materials like plastic. Also avoid materials that are hard to recycle like plastic-lined paper, mixed materials, and polystyrene.

For design, the classic waste hierarchy is a good place to start: reduce the amount, recover and reuse what you can, and ensure the rest is recyclable or compostable. This applies to everything from boxes and bags to tape and filler.

If you’re unsure what counts as sustainable, check the label for Forest Stewardship Council (FSC) on paper and cardboard, bioplastics that are ‘home compostable’, or 100% post-consumer recycled content. And talk to your packaging supplier, as many now offer lower impact ranges and guidance on better design options.

Source: Environmental Paper Network Paper Calculator

Quick actions you can take:

• Check your current packaging materials and see whether they’re recycled, renewable, recyclable, or compostable
• Look for opportunities to reduce, reuse, and recycle your packaging, as well as use better materials

Ecommerce and shipping

If you send products direct to customers, your parcel packaging is a key part of their experience of your brand. Whether it's sustainable and considered with clear recycling instructions, or excessive and unrecyclable, your customers take note.

Right-size your packaging so you’re not shipping more box, filler and air than product. This saves on materials, reduces postage costs, and lowers your carbon footprint. If filler is needed, use shredded cardboard or corrugated wrap, even repurpose old packaging rather than use polystyrene and bubble wrap.

For both boxes and mailer bags, look for high recycled content, plant-based or home compostable options. Some businesses go a step further and offer reusable delivery packaging, like returnable mailers. This won’t suit everyone, but if your customers order regularly, it’s worth exploring.

Source: DS Smith 2023

Quick actions you can take:

• Source parcel boxes that better match your product size and avoid the need for void fill
• Look for content boxes and mailer bags that are 80% or higher recycled
• Replace bubble wrap with corrugated cardboard wrap
• Consider woollen insulation over expanded polystyrene for temperature-sensitive goods

Transport and warehouse packaging

If your business moves goods in bulk, whether pallets of stock or crates of produce, the packaging used behind the scenes can quickly add up.

Reusable options like crates, tubs or pallet nets help reduce waste and are often more cost-effective over time. Even if you don’t manage your own warehouse, you can still work with suppliers and logistics partners to avoid single-use plastic, minimise shrink wrap, and recover packaging for reuse.

Think about what arrives with your stock – things like boxes, strapping and pallets – and whether any of it can be returned or swapped for better alternatives.

Source: CHEP 2021

Quick actions you can take:

• Consider reusable nets and crates if you move a lot of goods
• Trial returnable tubs or crates for deliveries within your local area
• Ask suppliers if they’ll take back pallets, crates or packaging for reuse

Takeaway food and drink packaging

If you serve food or drinks to go, your packaging often ends up in the bin within minutes. That makes material choice and design extra important.

Compostable and recyclable containers are always better than polystyrene or plastic-lined paper. It's also worth considering what waste collection is available nearby. If your local council offers food and organic waste collection, compostable containers are ideal for food.

Better yet, consider offering reusables or incentives for BYO cups and containers. And don’t forget to reduce the amount of packaging, from extra layers around food and condiments to checking with your customers whether they need cutlery and napkins.

Source: Morales-Caselles, Viejo, et al, 2021 published in nature,com

Quick actions you can take:

• Swap plastic-lined or polystyrene containers for ones that are compostable or are recyclable in your area
• Offer a discount for customers who bring their own cup or container
• Check with your customers whether they need napkins, cutlery or straws before putting them in the bag

Shopping bags and customer carry packaging

Plastic bag bans are in place in many regions, but wasteful packaging habits still persist. Encouraging customers to bring their own bags is one of the easiest wins.

Reusable bags made from fabric, recycled plastic or repurposed materials are ideal. If you offer paper, make sure it’s recycled, certified from sustainable forests and uncoated. Avoid bags labelled ‘biodegradable’ unless they’re certified, as many simply break into microplastics.

You can also rethink what you send goods home with the customers in. Some stores reuse packaging from suppliers, such as cardboard boxes, or offer a return bin for clean bags. A little creativity goes a long way.

Source: NSW EPA 2016, National Retail Association 2019

Quick actions you can take:

• Put up signage at your entrance and checkout to remind customers to bring their own bag and offer a discount
• Switch to 80% or more recycled, uncoated, FSC-certified paper bags or reusable options
• Provide a box of reused bags for customers who forget theirs

Product packaging

If you sell products under your own brand, how you package them is just as important as how you ship or serve them.

Product packaging is covered in the how-to guide on products and sourcing, which covers design, material selection, and working with suppliers. But the same principles apply as with other packaging: avoid excess, choose better materials, and design for reuse or recycling.

Think about what goes around your product, from bottles and jars to labels and seals. Can you make it lighter, simpler or easier to recycle? Could you eliminate an extra layer, incorporate recycled content in the material, or switch to a plant-based one? Could you make it refillable? These choices reduce bulky waste in your customer's bin and demonstrate your commitment to the planet.

Source: Eurostat 2023

Quick actions you can take:

• Remove unnecessary layers, inserts and weight from your product packaging
• Incorporate recycled content or plant-based materials
• Add clear recycling or disposal instructions to your packaging

How to know if it's working

To track your progress, start by measuring how much packaging you use and how much waste you’re avoiding or recycling. Keep it simple: focus on the types of packaging you control.

Some common metrics include:

• Total packaging used: The weight of different materials used across all packaging
• % recycled content: The percentage of packaging made from recycled materials
• % recyclable: The percentage of packaging that is recyclable locally in household kerbside bins
• Recovery rate: The percentage of packaging that is recovered from customers for reuse

Common targets include reducing packaging weight by a certain percentage, shifting to 100% recyclable or compostable packaging, or increasing use of recycled materials.

Small businesses can also set action targets, like trialling an alternative mailer bag or contacting a supplier to look for a right-sized alternative.