There’s a pattern I’ve seen play out at every company I’ve worked with: when times get tight, sustainability initiatives are the first thing leadership puts on the chopping block. “We’ll get back to that when things stabilize,” they say. It’s understandable. When you’re staring at a P&L that needs improvement by next quarter, worrying about packaging materials feels like a luxury.

But here’s what a decade in operations has taught me: sustainability isn’t separate from operational excellence. They’re the same thing wearing different hats.

A new report from Bain & Company confirms what I’ve been telling clients for years. According to their January 2026 analysis of the paper and packaging industry, companies that abandon sustainability efforts are making “a serious strategic miscalculation.” And the data backs them up: 59% of packaging customers surveyed said they would switch suppliers within three years if sustainability metrics weren’t being met.

That’s not a PR problem. That’s a revenue problem.

The Real Cost of “We’ll Get Back to That Later”

I remember walking a warehouse floor at Emerson a few years back, trying to figure out why our inventory carrying costs were so high despite decent turnover numbers. The answer, it turned out, had nothing to do with demand forecasting or safety stock calculations. It was packaging.

We were storing products in oversized packaging because “that’s how the supplier shipped them.” Nobody had questioned it because questioning it would mean redesigning inbound logistics, renegotiating with suppliers, maybe even rethinking how we picked and packed. It was easier to just rent more warehouse space.

Here’s the thing: right-sizing that packaging would have reduced our environmental footprint. It also would have cut our warehousing costs by double digits. Sustainability and efficiency weren’t competing priorities—they were the same priority, approached from different angles.

The Bain report notes that regulation is “now shaping economics at scale.” This is the part that should wake up every operations leader. Five years ago, you could treat sustainability as a marketing initiative—nice to have, good for the annual report, but not operationally critical. Today, regulatory requirements are creating real cost implications. Companies that built sustainable practices into their operations early are now operating at a competitive advantage. Those who didn’t are scrambling to catch up, often at significantly higher cost.

What the Data Actually Says

Let’s look at what Bain found, because the numbers tell a story that goes beyond feel-good messaging.

First, the market reality: Bain estimates there are approximately 8 trillion units of consumer packaging globally. About 60% of that is plastic, while 20% is fiber. Both consumers and regulators are pushing hard for shifts to more sustainable options. Cups, lids, containers, boxes, and clamshells are the categories where plastic currently dominates but faces the most regulatory pressure.

Second, the customer reality: When surveyed, U.S. consumers showed a clear preference for non-plastic substrates for grocery store packaging. Paper and glass ranked highest. But here’s the nuance that matters for operations planning— “plastic-free” actually ranked lower in importance than recyclability. Consumers care most about whether something can be recycled, followed by whether it contains recycled content. This is actionable intelligence for anyone managing packaging decisions.

Third, the supply constraint: There’s a potential 30-40% gap in supply and demand for recycled plastic for certain resins by 2030. If your operations depend on recycled content to meet sustainability commitments—or to meet customer requirements—you need to be thinking about this supply chain risk now, not in 2028.

The Operational Translation

So, what does this mean for a mid-market manufacturer or distributor? How do you translate industry research into operational decisions?

Start with visibility. Most companies I work with can’t answer basic questions about their packaging: What does it cost? What’s the environmental profile? What are the alternatives? You can’t optimize what you can’t see. Before making any sustainability-related decisions, get your data in order. This might mean adding packaging as a tracked dimension in your ERP or building a simple dashboard that shows packaging costs as a percentage of COGS.

At Torelo, we built predictive analytics that improved inventory forecasting by 15% and reduced stockouts by 22%. The same analytical approach applies to packaging. When you can see what you’re actually using, you can start asking smarter questions: Why are we using this material? What would switching cost? What would staying cost if regulations change?

Then look at your supply chain holistically. Substrate switches—moving from plastic to fiber, for example—remain a leading strategy for sustainability, according to Bain. But a substrate switch isn’t just a purchasing decision. It affects warehousing (different storage requirements), logistics (different weight and cube), production (different handling), and potentially product quality (different barrier properties). You need someone who can see across all those functions, not just someone negotiating with packaging suppliers.

This is where the operational perspective matters. I’ve seen companies switch to “sustainable” packaging that actually increased their total environmental footprint because the new material required more protective packaging, more frequent damage replacements, or different logistics that increased miles traveled. The sustainability calculation has to include the whole system, not just the material spec sheet.

The Quiet Majority

One of the most interesting findings in the Bain report is the gap between public messaging and actual practice. Many companies have “toned down” their sustainability messaging—probably in response to ESG backlash and the current political climate—but they’re still investing in sustainability initiatives behind the scenes.

This is smart. It’s also instructive.

These companies understand that sustainability isn’t a branding exercise—it’s an operational hedge. They’re preparing for regulatory changes, customer requirement shifts, and supply constraints whether or not they’re putting out press releases about it. They’re building optionality into their operations.

The report puts it well: “The era of setting ambitions is over, and the hard work has just begun. Five years ago, targets were enough to earn credibility. Today, packaging customers are falling behind in their sustainability commitments.”

In other words, the companies that set aggressive sustainability targets in 2020 are now being held accountable for actually achieving them. And 59% of their customers are watching.

What I’d Do If I Were You

If you’re running operations at a mid-market company and wondering how this applies to you, here’s what I’d be thinking about:

First, audit your packaging situation. Not just costs, but materials, suppliers, regulatory exposure, and customer requirements. You might be surprised by what you find. Most companies are sitting on optimization opportunities they don’t even know about because nobody has looked at packaging as a strategic category.

Second, talk to your customers. Not about sustainability in the abstract, but about their specific requirements. Are they tracking supplier sustainability metrics? What are their timelines? What would cause them to switch suppliers? The 59% number in the Bain report is an industry average—your specific customers might be more or less sensitive to these issues.

Third, build flexibility into your supply chain. The companies that will thrive are the ones who can adapt quickly when regulations change, or customer requirements shift. That means understanding your alternatives, building relationships with multiple suppliers, and designing processes that can accommodate different materials without major retooling.

Fourth, look for the wins that serve multiple masters. The best operational improvements are the ones where sustainability, cost reduction, and customer satisfaction all point in the same direction. Right-sizing packaging, reducing waste, optimizing logistics to cut miles traveled—these aren’t just good for the environment. They’re good for your margins.

The Bottom Line

Bain is right: abandoning sustainability is a strategic miscalculation. But not because of PR or brand perception—because of operational reality. Customers are demanding it. Regulations are requiring it. And the companies that build sustainable practices into their operations now will have a structural cost advantage over those who have to retrofit later.

The question isn’t whether sustainability matters. It’s whether you’re treating it as a checkbox exercise or as an operational transformation opportunity.

From where I sit, the answer should be obvious.

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Sources

Pyzyk, Katie. “Abandoning packaging sustainability a ‘serious strategic miscalculation’: Bain.” Supply Chain Dive, January 16, 2026.

Bain & Company. “2026 Paper and Packaging Outlook Report.” January 8, 2026.