The CPG procurement leader's 90-day agenda to reduce packaging cost and risk

by Julien Bitton, George Bradshaw-Smith

Packaging has become one of the most overlooked value levers in consumer packaged goods. For years, packaging discussions have centred on two priorities: reducing cost and improving sustainability. Those goals still matter, but they no longer capture the full value at stake. Packaging now sits at the intersection of margin protection, supply resilience, regulatory compliance, operational performance, logistics cost and customer experience.

Recent geopolitical volatility has made that impossible to ignore. Disruption can move quickly through energy, shipping, raw materials, and supplier cost assumptions. Regulatory requirements continue to evolve. Consumer expectations are changing. Together, these pressures mean packaging decisions increasingly determine whether organizations protect margin, maintain supply continuity and respond quickly to market change.  

For procurement leaders, the immediate question is not simply how to respond to the latest disruption or supplier price increase. It is whether packaging is being managed in a way that reflects its growing importance to the business. As packaging influences an increasing number of commercial and operational outcomes, procurement's role must extend beyond sourcing to managing cost, risk and value. 

One example from a recent client engagement illustrates the point. A US business that depended on paper supply could not access the material it needed on time. The disruption was severe enough that it had to produce books in China and ship them back to the US. That was not simply a paper issue. It was a supply continuity issue, a logistics issue, a service issue and a margin issue. 

The lesson for CPG companies is clear: if a business cannot access the packaging or material it needs, it may not be able to produce, ship or sell its products.  

Procurement cannot manage packaging strategically without understanding what it owns. Many organizations know what they spend on packaging, but not always what they are buying in enough detail. Procurement may understand suppliers, volumes, and prices, but have less visibility into specifications, material composition, recycled content, manufacturing locations, regulatory exposure, or alternative supply options. 

Without that visibility, teams risk optimizing the wrong thing. A pack that looks cheaper on a unit-price basis may increase freight costs, reduce production efficiency, increase inventory, or create additional compliance risk. 

Packaging cost is not the same as packaging price. The total cost also includes ordering behavior, tooling, line performance, warehousing, product damage, administration, EPR exposure and the cost of managing exceptions.  

Managing packaging strategically means treating complexity as a business decision, not simply an operational reality. Packaging complexity accumulates over time as new products launch, retailers request different formats, marketing introduces variation, and sustainability initiatives create new material choices. What often fails to happen is the systematic removal of legacy SKUs and specifications. 

The result is a fragmented packaging portfolio that weakens buying leverage, complicates planning, increases inventory and makes the supply chain harder to manage. Differentiation remains important for brands and consumers, but complexity should earn its place.  

Transactional procurement reacts to supplier price requests. Strategic procurement creates commercial mechanisms that allow both buyer and supplier to respond transparently to changing market conditions. 

Many procurement teams still believe they can consistently outperform volatile packaging markets through negotiation alone. Increasingly, that approach creates unnecessary friction. 

Indexation, transparent surcharge mechanisms and well-designed contracts are not about giving away commercial control. They are about creating commercial discipline. 

This is also where supplier relationships become strategically important. Packaging suppliers provide insight into material availability, regulatory developments, manufacturing constraints and innovation opportunities that procurement teams cannot always generate internally.

Packaging regulation is changing the role procurement plays in packaging decisions. 

Requirements such as Extended Producer Responsibility (EPR), the Packaging and Packaging Waste Regulation (PPWR),, recycled-content requirements, packaging taxes and country-specific rules are changing packaging decisions. These are no longer issues that can be left solely to sustainability or compliance teams.

For procurement leaders, the challenge is to ensure their teams can balance commercial, regulatory and operational considerations at the same time. The lowest-cost supplier may not provide the data needed on material composition to demonstrate compliance. A technically compliant supplier may affect availability, manufacturing performance, or product protection.  

Managing these trade-offs has become a core procurement capability, rather than a downstream compliance exercise.

Packaging decisions rarely affect just one part of the business. A change made to reduce material costs may increase logistics costs. Lightweighting may support sustainability objectives while creating new risks for product protection. A new packaging format may improve shelf impact but add manufacturing complexity or reduce buying leverage. 

Procurement is uniquely positioned to bring these competing priorities together. Rather than optimizing for unit price alone, procurement leaders should equip their teams to evaluate packaging decisions through a broader commercial lens that considers cost, resilience, compliance, operational performance and customer experience together. 

Doing so requires stronger collaboration across functions, but it also requires procurement to provide the data and commercial insight needed to make informed trade-offs. The objective is not to eliminate competing priorities, but to ensure decisions reflect the total value packaging creates for the business. 

The biggest misconception in packaging is that the main opportunity lies in negotiating a lower purchase price. It does not. 

Packaging influences manufacturing, logistics, inventory, compliance, sustainability, resilience, consumer experience, and ultimately margin. The CPG companies that create the greatest value will be those that manage packaging accordingly. They will be the organizations that build visibility before pursuing savings, remove unnecessary complexity, create transparent commercial structures, integrate regulatory considerations into sourcing decisions, and make packaging choices through a total-value lens. 

Packaging can no longer be treated as a transactional sourcing category. It needs to be managed as astrategic lever for margin protection, resilience, and long-term value creation. For CPOs and procurement leaders, the opportunity is not simply to negotiate better packaging contracts. It is to equip their teams with the capabilities, information and commercial disciplines needed to create lasting competitive advantage through packaging.