Sealed Air CEO (bubble wrap) on material gains in a resource-challenged world | Fortune

I'll send you a little kit which is for officers when you're stressed, you can play with those things. So yeah, I confirmed we still there. It's the inventor of bubble wrap. And when this article in the Wall Street Journal on the first page, to my big surprise, has appeared, I received a huge number of emails, text messages, letters from people all around the world saying, 'You can't do that.' And even my son, who works in London, sent me a text saying, 'I've got 50 of my Facebook friends who are telling me whether I can do something to stop that.' But the sustainability issue out of this future generation bubble wrap is absolutely extraordinary. The principle is that we are going to launch this new type of protective material which is going to be inflated on site at the customer site. The sustainability story is amazing because one truck of this bubble wrap is equivalent to 47 trucks of the old bubble wrap. So we're going to take 46 trucks out of the road just by doing this. I think it's extraordinary. And that brings me to the purpose of this company, which started as a protective packaging company, and now a new vision is we create a better way for life.

So when I arrived in 2012, everybody was telling me, 'Oh, you're joining Sealed Air, that's a great company.' And actually it's a company which had extraordinary market shares, but I found very quickly that what it was lacking was a sense of purpose which was really putting the glue in all of those three divisions. And this is how we rebranded it, you say, and I think it's a very good word because that's what we did. But we did that for ourselves first, to explain to ourselves why we exist and what is the purpose of Sealed Air. And when you look at our three divisions, we are in fact a waste buster and a hygiene enhancer. That's who we are. And why is that? We're the world leader of protein packaging. And believe it or not, there are four billion dollars of protein meat, or so red meat, chicken, pork, etc., or cheese, which are just in the U.S., four billion dollars which are thrown away from farm to the retailer of poultry food, poultry meat a year in the U.S. only. And there are nine billion dollars of poultry meat which is thrown out of our fridges every year by us. That's terrible. This planet is choking and we don't have the sense of urgency to do better on things which are so easy. So what is our job? Our job in protein is to reduce waste by offering an improved shelf life. And we're doing this with all the retailers of the world, with all the larger meat producers of the world, because we can increase shelf life for pennies, for nothing, by 10 days, two weeks, three weeks, two months. How do you think that lamb from New Zealand arrives in Europe fresh and not deep frozen after 75 days of transit because they come by boat? Because of high barrier, quality type of materials. So what we are developing is those kinds of packaging which are vacuum packed, which increase shelf life. So here we are, and we can dramatically impact the food waste, the meat reduction, by things like this which exist today. And if I would tell you, if you would have asked yesterday the CEO of Whole Foods how much fruits and vegetables does he throw away, and I'm not going to speak for him because I don't know, but the retail industry throws away about seven to ten percent of their fruits. The retailer, the meat losses out of a retailer is about four to eight percent. And when I say the losses, I mean what is thrown away or what is not sold at its originally intended price. That is huge.

It's not easy. Actually, you got to choose your customers. It is common wisdom that customers choose their suppliers. Well, actually, it's not one way. I want our people to choose their customers. You're going to have some people who only want to compare like for like, and those people, to make their purchasing decisions, and those people are people who in fact lose the big picture. Because I understand when I go and meet customers, I just tell them, 'I understand you want to make more money,' and they all nod. And I say, 'Well, by the way, I never met a company who wants to make less money. So by definition, you want to make more money. But if in order for you to make one more dollar you have to take it from our pocket, there is no deal here. But if you want to work with us, we will not make you one dollar, we will make you three, five, and ten.' Let me give you just one example. In our hygiene division, we are operating in quick service restaurants, in hotels, in hospitals, and all of this by selling, by invoicing detergents or anti-infection products or floor equipment, etc., etc. And we also sell laundry professional laundry products. So one way of looking at us would be, 'Well, you sell professional laundry products.' No, we don't. No, we don't. What we do sell are products which extend the shelf life of the linen. And when we work with hotel chains around the world and we develop the right type of product with the right type of detergent with the right type of water that they have locally, etc., we extend the shelf life of their linen by about a third. So no, we don't sell laundry products, we sell shelf life extension and hygiene increase. In our original division, like product care, product packaging, it's not about bubble wrap or a form or whatever. The companies have four cash costs when they talk about protective packaging or about shipping something: it is the cost of the packaging, it is the cost of labor to pack, it is the cost of the freight, and it is the cost of the damage. So the old generation purchasing people will want to say, 'No, no, no, no, I want to talk to you about the cost of your packaging.' No, it is not about that. This is how we're going to make you five cents, not how we're going to make you five dollars. And when you look at all of those cash costs which you can quantify, the waste is enormous. It's zillions. Just give you an example on e-commerce. On e-commerce, no, actually on damage. Damage, there are nine billion dollars of damage every year in the U.S. of goods which are broken in transit. Bad packaging. Because of people say, 'Well, it's because of mishandling,' and then the transport company is saying, 'Well, that's not me,' and so everybody's pointing fingers. Most of the time, you can easily actually look at the statistics and say, 'Well, what is your damage rate?' And you know what? You have a packaging problem. So who of you did not receive at home a package through e-commerce where you saw a box big like this and a product big like this? Does this resonate? All right. What a waste. It's not waste, it's a crime. It's a crime because that huge box has been traveling for miles and miles and miles, and it's waste of fuel, waste of too much package, etc. The solutions are so easy, so easy. So these are the people we want to work with, those people who say, 'Yes, I do recognize I have those four cash costs, and yes, come and help me.' Actually, yesterday I was having dinner with Jeff at Dell. We're going to talk there, you go, this mushroom thing from us. So anyway.

Actually, it's a very good question, and you're serving us as our new auditors. Thank you for doing this, and keep doing a great job. The repurposing and giving a purpose of actually, I was just in the company. I have, we have an executive join us, and one of her first questions was, 'Why are we existing?' And that was the beginning of a very good question. So it's first for internal reasons. You have to explain to your people that we are not here only just to make money. Actually, it is so disappointing. It's just like if you're in love with money, you're never going to be happy because you're never going to have enough of it. So what you have to have is a very strong purpose which bonds your employees. And when we did the first employee survey, we had, the scores were so-so. And every single year we're seeing them going up and up and up because people buy and understand what we're really doing. What we're really doing is we are putting to bed this concept that sustainability is the new quality, provided you are not a tree hugger and that you realize that sustainability has to be tied with product or solutions performance and cost competitiveness. Which is why we have this Trillian, which is a pompous way of calling it a triangle, but it's fine, it's nice. Sustainability is the new quality.