Rwanda | July – December 2024 | Case Study
The Opportunity
How a Chili Sauces Manufacturer Switched to a Sustainable Packaging Option
The sustainable packaging industry is rapidly evolving due to rising consumer demand for eco-friendly products, regulatory pressures, and corporate responsibility initiatives. In Africa alone, the market is projected to grow from $292.71 billion in 2024 to $423.56 billion by 2029, with a CAGR of 7.67%. This growth comes along with potential benefits such as waste reduction, resource conservation, and less landfill waste. Reflecting on the market drivers, and given the significant packaging used in consumer products, it’s no surprise that food processing companies gain a growing interest. However, changing packaging portfolios can easily disrupt supply chains and cause inefficiencies across production, driving-up investment and operational costs. Yet, in consideration of adapting adequate industry modules, it can lead to long-term savings through reduced material usage, improved energy efficiency, tax incentives, and streamlined supply chains.
Our client, a Rwandan manufacturer and supplier of chili sauces across East Africa, planned to expand into a premium market but faced regulations from the Rwanda Environment Management Authority (REMA), including a ban on non-recyclable single-use plastic containers. Trapped in this dilemma, our client required cost-efficient, reliable, and sustainable packaging, that upgraded product characteristics and manufacturing efficiency.
The Solution
Leading the Charge in Green Packaging
To find further insight and accelerate the process, our client, with Stepchange Africa’s help, developed a sustainable packaging roadmap assessing compliance, product compatibility, initial investment costs, supply chain and factory integration, and operational costs. The result was a cost-optimized packaging solution roadmap, identifying alternative, qualified A-grade suppliers and packaging options that maintain product quality and appeal, ensuring a smooth transition into factory operations.
A significant part of the work involved testing and validating materials to ensure they did not diminish shelf-life or cause unforeseen reactions (alcohol, gases, acids) that could lead to reputation-damaging and expensive recalls. Agreements on packaging design aimed to prevent cost increases along the supply chain, production, and emissions. The results pinpointed where reductions could be made, yielding spectacular improvements in manufacturing output and costs.
Stepchange Africa’s vast network of suppliers helped identify those with the best cost-benefit ratio, piloting chosen packaging options and refining product line integration. Future product variances were considered, with suppliers shortlisted for their ability to test adjustments and scale.
The Impact
Pioneering Sustainable Growth and Compliance
Securing factory health, material supply, and REMA compliance enabled our client to achieve market expansion while keeping investment costs moderate. This also allowed for the assessment of a crucial part of the product portfolio for future references.
Considering Rwanda’s sustainability targets, further research identified biodegradable films from renewable resources or bacterial fermentation. Stepchange Africa provided a legal framework to ensure compliance with national standards for environmental sustainability and waste management, including recycling, composting, and waste conversion guidelines.
Finally, steps were taken to transform packaging across other business units: Wholesalers (50% of the business) and Retailers (20%).
Success Metrics
- Cost Reduction: Achieved a 15% reduction in packaging costs through optimized material usage and supplier selection.
- Waste Reduction: Decreased packaging waste by 20%, contributing to lower landfill volumes.
- Energy Efficiency: Improved energy efficiency by 10% in the packaging process, reducing overall carbon footprint.
- Compliance: Met all REMA regulations, ensuring full compliance with environmental standards.