• Brandweek , Wednesday, December 3, 2008 10:45 AM

Packaged goods companies can expect a reduction of anywhere from 13% to 31% in earnings by 2013, and from 19% to 47% in 2018, if adequate sustainability measures are not taken, according to A.T. Kearney in a report wrapped within the catchy title, "Rattling Supply Chains: The Effect of Environmental Trends on Input Costs to the Fast Moving Consumer Goods Industry."

Assuming commodity costs hit an all-time high, "half of current profits will be erased" if companies continue standing by a "business-as-usual" approach, says Daniel Mahler, partner and global leader for sustainability practice at Kearney's New York office. Companies that can reduce their reliance on materials like plastic or paper can cut costs when economic pressures cause price increases, Mahler says.

Companies such as Procter & Gamble and Nestle have already implemented sustainability strategies, Elaine Wong writes. Nestle is placing more emphasis on sourcing materials locally to cut down on transportation. P&G is sharing knowledge across different brand categories. For instance, a brand manager on Pantene might consult with a colleague on Tide about packaging that requires less plastic.

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