- Some global CPG firms are doubling down on waste-reduction efforts, with Nestlé establishing a packaging research institute to devise more environmentally friendly solutions and PepsiCo setting a goal of reducing the amount of virgin plastic by 35% in its beverage containers by 2025.
- During a recent tour of Nestlé's Institute of Packaging Sciences in Switzerland, CEO Mark Schneider told Reuters the company wants "to be in the driver's seat when it comes to developing solutions" to packaging challenges and has been pushing suppliers on the issue because "we have the feeling they have not really delivered."
- For PepsiCo, the new goal moves up its agenda to increase recycled content and alternative packaging materials for its Lifewtr, bubly and Aquafina brands. The company said in June it would produce Aquafina in aluminum cans starting in 2020 for foodservice outlets, switch bubly products to all cans, and move Lifewtr products to 100% recycled plastic by the end of next year.
If the sustainability efforts from these two major food and beverage companies are followed through and work out well, it could move the needle on sustainability for them and push others in the CPG industry to do the same. However, it's one thing to announce more environmentally conscious goals and newly enhanced recycling targets and another to walk the talk in tangible ways to help satisfy investors and consumers.
Nestlé was one of many CPG giants targeted this summer by a Greenpeace report as moving too slowly to phase out single-use plastics. Since the report came out, the Swiss firm started offering its Yes snack bars in recyclable paper wrappers. As a longer-term strategy, the company also set up the packaging research institute to develop its own solutions rather than rely on suppliers.
According to the company, it was able to come up with recycled paper packaging for the snack bars and for its Nesquik All Natural cocoa powder in less than a year. This ambitious timeline shows more progress toward sustainability is possible if sufficient resources and ambition are applied.
Nestlé hopes to capitalize on the packaging sciences institute by licensing technologies developed there to third parties, Reuters reported. Schneider told the news agency the company's upfront investment — whose size it declined to share — meant Nestlé would "ultimately want to see higher consumer sales or royalties."
It's understandable Nestlé wants to manage its own packaging solutions, and it no doubt has the money to make that happen. But the company could also gain more support from investors and the marketplace if the results bring in additional revenue. Accruing financial benefits from sustainability might also influence competitors to ramp up efforts toward reducing plastic packaging — as long as new solutions don't add too much to the cost of products at the retail level.
For PepsiCo, it could gain financially as well as environmentally and politically by reducing the amount of virgin plastic in its beverage containers between now and 2025. More sustainable packaging means eliminating more than 8,000 metric tons of new plastic and about 11,000 metric tons of greenhouse gas emissions, the company said in June.
Hitting those goals could elevate PepsiCo's profile and draw customers — if people are aware of the changes and care enough to patronize greener food and beverage companies. According to 2018 survey data from Nielsen, nearly half of U.S. consumers are likely to change their purchasing decisions to meet environmental standards.
CPG companies are increasingly monitored on who is doing what, so those sustainability pledges from the likes of Mars Wrigley, Unilever, General Mills, Kraft Heinz, Hershey and Mondelez aren't as likely to fall into the void and never be checked on again. The trick to success on these goals will likely be companies doing what they promise, since altering packaging operations can be cumbersome for larger food and beverage companies.
Smaller companies have moved faster on big sustainability efforts. Earlybirds, a London-based maker of breakfast drinks, plans to launch 100% plant-based compostable packaging with a lid made from sugar cane in October, according to Bakery and Snacks. This innovation is coming from a company founded last year and only brought its products to market in August. Meanwhile, Unilever, Nestlé and PepsiCo have agreed to phase in compostable, recyclable and biodegradable packaging by 2025 — although all have huge supply chains to accommodate compared to a tiny startup.
Still, large companies looking to differentiate themselves from the competition might want to take note of fledgling firms like Earlybirds. They might reap more consumer brand loyalty, boost bottom lines and turn their sustainability credentials a darker shade of green.