Sustainable packaging

With consumers paying more attention to the environmental footprint left by their favorite brands, many companies such as Coca-Cola have come out with pledges for various parts of their businesses. Green groups like Oceana are keeping a close watch on those commitments, and they are not afraid to call out CPG players they believe are not making enough progress.

Coca-Cola has struggled in recent years to make progress on its reusable packaging goal. Last year, its sustainability report found an estimated 14% of its total beverage volume was served in reusable packaging in 2022, a decline from 16% two years earlier.

“In light of this lack of progress and commitment by the company’s bottlers, Oceana is calling on Coca-Cola to disclose its plan for how the company will meet its reuse goal by its 2030 deadline,” the environmental group said.

Oceana estimated if Coca-Cola reaches its 25% reusable packaging commitment, it could avoid producing the equivalent of over 100 billion 500-milliliter single-use plastic bottles and cups. 

In response to Oceana’s report, a spokesperson with Atlanta-based Coca-Cola stated that “while sales of finished products served in reusable packaging increased by more than 100-million-unit cases [last year] compared to 2022, business growth outpaced our efforts to increase total beverage volume [of reusable packaging].”

The spokesperson noted that during the Olympic and Paralympic games in Paris, the maker of Diet Coke, BodyArmor and Dasani served its drinks, when possible, in reusable and returnable cups. In venues where it couldn’t have drink fountains, beverages were served from recycled plastic bottles or returnable glass bottles into reusable and returnable cups.

”We know more must be done, and we can’t achieve our goals alone,” the person said.

Coca-Cola has put in place other various packaging changes to make its offerings more environmentally friendly. It tested out a Sprite bottle without labels earlier this year to remove one step during the recycling process. Coca-Cola also announced two years ago it would change its famously green Sprite bottles to clear PET in North America, in a bid to increase its bottle-to-bottle circularity.

Americans purchase about 50 billion water bottles annually, averaging about 13 bottles per month for every person in the U.S., according to data from Grand View Research cited by EarthDay.org. 

A report released in 2022 by the Organization for Economic Cooperation and Development found the amount of plastic waste produced globally is on track to almost triple by 2060, with around half ending up in landfills and less than 20% recycled.

Other companies, including Coca-Cola’s archrival PepsiCo, also have struggled to advance their plastic sustainability goals. In 2023, the food and beverage company’s ESG report attributed its increased use of virgin plastic from nonrenewable sources, in part, to “limited availability and high cost of recycled content.”

When L.A. Libations CEO Danny Stepper started the beverage incubator in 2009, the company took on nearly any business it could get.

Today, the California-based group, renowned for identifying trends and supporting emerging brands, has become a partner for nascent beverage companies seeking to succeed in the competitive and unpredictable industry. L.A. Libations is now more discerning in choosing which companies to collaborate with, favoring those with receptive CEOs and innovative brands.

While L.A. Libations admits to its fair share of misses, the accelerator has proven to have a shrewd ability to identify up-and-coming brands — many of which have evolved into multi-billion dollar products. Several were eventually acquired by larger beverage manufacturers, including Body Armor and Zico by Coca-Cola, while others have attracted an investment, such as Zoa Energy from Molson Coors and Athletic Brewing from Keurig Dr Pepper.

L.A. Libations latest round of companies hoping to benefit from the beverage incubator include Arriba Chelada, a tomato-and-clam-juice drink made without artificial coloring, and Plezi, a company focusing on healthier food and beverage products for children co-founded by Michelle Obama.

With more than 98% of beverage brands failing to survive, L.A. Libations has proven to be a valuable resource for companies looking to increase their likelihood of success. In 2019, Molson Coors purchased a large stake in the nonalcoholic beverage incubator as the beer giant looked to diversify its portfolio beyond its signature brews. 

Stepper, who recently purchased the Beverage Forum, the industry’s annual gathering discussing the sector, talked to Food Dive about what L.A. Libations has learned since its founding, how companies can improve their outlook and where beverage innovation is heading.  

This interview has been edited for brevity and clarity.

FOOD DIVE: What’s your take on the beverage space today?

DANNY STEPPER: The good news, if you're a guy or gal starting a brand in your garage right now, is the consumer is incredibly promiscuous and wants to try new things. Fifty percent of the growth is coming from brands and categories that didn't exist five years ago. So that is a very important statistic. Think about it, if you're a retailer, you have to grow your category, right? That's the lifeblood of your business. And your job is to grow your category. Well, 50% of the growth is coming from new things. Retailers have to be in new things to grow. That's the good news for all the entrepreneurs and founders that are starting new things.

The bad news is, there's a 98% infant mortality rate. So only 2% of brands get to 10 million in revenue. That is the conundrum that everyone's trying to solve. And that's really our "reason to be" for L.A. Libations. We still get it wrong but our batting average is a lot better than 2%. Retailers depend heavily on us for what they should bring in. That’s a huge responsibility for us because if we start becoming 2% correct, they don't need us anymore.

So we've overthought and over-investigated and overstudied what makes brands work. It's ultimately about the founder, but there's a lot of other factors. Before even getting to the liquid in the brand and trademark, it's access to capital. It's total addressable market. But really it's about the founder, and the founders have to have this crazy combination, which very few people do, of being innovative, yet coachable. There's a lot that are innovative, and there are a lot that are coachable, but there's very few that are both.

The reason why you have to be coachable is because there are so many just industry things that if you've never done it before, there's so many pitfalls and it's so hard. If you don't know where the bodies are buried, then you'll fail, no matter how innovative you are. And if you're just coachable and not innovative, the world doesn't need you. So that's really kind of our opportunity and our reason to be. 

Why is there a significant amount of growth and innovation in beverages today? How did it all start?

STEPPER: It started with Whole Foods, like in 2011 when Whole Foods started just exploding, and, you know, they really focused on clean Whole Foods-compliant, organic, functional beverages. And so we went through this period of time where everyone's holding their nose and drinking terrible-tasting kombucha. That was very weird.

Then what happened was the consumer demanded more. The consumer still wanted that functionality, but they demanded great taste. And the sweetener systems and technology has come so far that you can make things taste great and still be healthy, where you couldn't do that in the 70s 80s and even 90s. I think what's happened is the democratization of Whole Foods. Now you'll find healthy, great-tasting products at Walmart, at Kroger. You see these big, scalable traditional retailers going earlier than they ever had with emerging brands.

That's really created this opportunity for founders. There were huge barriers to entry before. Coke and Pepsi just dominated it. They had the entire shelf, and there were a lot of one-player categories like Gatorade, that was basically a one-player category.

What we've seen in hydration over the last two years has been incredible. Brands like Electrolit and Prime and BodyArmor really have come in and taken huge market share. But ultimately the category is actually healthier than it ever was. Gatorade is actually growing. It's just brought more attention and more light to the category and challenged them to not sit on their laurels and innovate. I mean Gatorade, has so many new products now.

There are two other trends that we happen to sit in the middle of. We didn't plan it this way, but this whole creator economy and talent and celebrities and influencers that have brands. When we launched Zoa with The Rock, something happened. Now, every celebrity wants to do a drink with me. ... We spend our lives trying to create awareness and therefore trial for our beverages because you may have a great brand, it doesn't matter if no one knows about it ... Consumers don't want to be told what to drink. They want to discover it. They want to see someone they trust. Consumers don't trust big companies anymore. They trust people, friends, influencers or creators.

And the other trend, which we sit in the middle of, is that every alcohol company wants to be a non-alc company, and vice versa. ... We brought Coke into alcohol. It's Topo Chico Hard Seltzer. We put the deal together between Coke and Molson, and they had a baby and that was Topo Chico Hard Seltzer, which lead to Simply Spiked and other Coke brands jumping to Alcohol. 

How influential have these startup brands been in spurring innovation at the big beverage companies?

STEPPER: This emerging brand ecosystem is actually making the big guys better and sharper and quicker. Still not fast but faster. They have to evolve or they're just gonna get eaten away from all sides. So that's definitely going on. 

Despite growing demand from consumers and retailers for new beverages, why is the failure rate still so high?

STEPPER: I've seen this movie a million times. What happens is a guy or gal has an idea. They think it's the greatest idea in the world. It's usually not, and they borrow friends and family money. And they go and do their first production run. And it comes out, and it's probably not great on the first production run. 

So they're sitting with a garage and a couple of Public Storage units full of product, and this product has date codes, so the clock starts ticking and they have to get it out there and they have no idea how to do that. They try to get a hold of retailers who are super busy because everyone's calling them trying to get meetings. They're very hard to get. And if you're fortunate enough to get a meeting with the retailer and the retailer actually likes it, usually not, and says I want it, how are you going to get to my store, then the founder has to go figure out distribution and all that and by the time all this stuff happens, usually the products out of code, and their friends and family are mad at them and they go back and get a day job. That happens a lot, a lot to skew that number.

If you’re a startup company faced with all these challenges and obstacles that you’ve never faced before, what do you do?

STEPPER: That's why we created SIP, our SoCal Incubation Program, to solve this exact problem. Founders can come and work for hire or pay us to get them on the shelves and prove their concept because we're meeting with the buyers every single week. We have our own distributor here in L.A. so we have our own route to market and we can solve that for them.

We take a lot of the friction out of it, and they can see what they actually got a lot faster. So, the problem is time, time is money because you're burning through capital in the beginning. Usually, you quit your job so you're not paying yourself if you're a founder, you can only do that for so long, especially if you’ve got a family. Time is critical and what we offer, and there are a few others out there that can do it, you get an advisor or someone that's done it before that can coach you. That's where the coachability factor comes in.

You mentioned your success rate is higher than the average across the industry. How are you doing?

STEPPER: It’s much better than [the 2% success rate across the industry.] We’re actually getting better for a couple of reasons. We continue to get smarter and understand more what we think will work. We've been doing this, we’re in year 15. We still don't have all the answers. I promise you that we still fail a lot, but it's getting better. It's getting much better and we're becoming much pickier, like so many brands want to get into SIP whereas when we were building the company, we needed just to make revenue and we would kind of, anybody that wanted to hire us can hire us. That's not the case anymore. If we're gonna go and tell the retailers to bring something in, we have to really, really believe in it.

Within beverages, where is growth the largest?

STEPPER: Hydration is massive. Hydration is really a category on the move and it's interesting because for forever, Gatorade had a 90 share and Powerade had a 10 share, that's Coke and Pepsi. And no one could break through. No one. When BodyArmor ... broke through, it showed that it could be done and now we've had brands like Electrolit and like Prime and now Ghost coming out with their hydration. ... There's a lot of entrepreneurial energy coming in for hydration. Consumers want more hydration as well.

Energy just continues to defy gravity. It’s huge and profitable. Usually things that are huge are not profitable. Healthy energy, plant-based energy, people upgrading Monster and Red Bull, Celsius. There's a lot of others that are starting to, Ghost has been a phenomenon, C4, Zoa is starting to make some inroads. There’s still room in energy. Those two categories are really fascinating right now.

What have you learned during the last 15 years in beverages and running L.A. Libations?

STEPPER: One hundred percent that the founder is the most important thing when it comes to these things that work. It's no coincidence that a lot of the guys that have done it, are doing again, Mike Repole, Lance Collins, Seth Goldman. They're incredible founders. Also, access to capital, we're able to help brands raise capital now. That's a new muscle that we built because every brand needs capital. It doesn't matter how great it is, it needs capital. [When a brand works with us,] we give investors confidence, they're more inclined to write checks to those brands. And you need that oxygen.

I think the other thing is the idea of continuous improvement is a really important thing. You're never done. You’re constantly tinkering. You're constantly getting consumer, customer, distributor feedback and you're incorporating that in and you're making changes on every next production run. You show me a founder that thinks they've got a perfect product, I'll show you a founder that's going out of business. Whether it's your liquid, your branding or supply chain, you're always continuously improving it. You have to have that mindset.

Cannes Lions, which wrapped Friday, is an annual gathering honoring the best in advertising, effectively serving as the industry’s Oscars. PepsiCo this year used the event to preview new experiments that meld marketing, design and technology, with a focus on leveling up personalization. 

Gatorade’s AI Hydration Coach taps into the tech of the moment — and talk of the festival — applying AI to educate users about the best ways to stay hydrated through an assistant that draws on decades of historical data from the sport beverage brand’s research institute. The concept leans into the idea that AI has the power to democratize services that were once exclusive, giving everyday consumers the type of expert guidance usually reserved for elite athletes.

At Cannes Lions, Anna was available via a touch screen interface and presented as a virtual avatar wearing a shirt and blazer. Users could ask specific questions related to their hydration needs but also more lighthearted ones, like what Anna’s favorite flavor of Gatorade is. The AI Hydration Coach is aiming for a pilot in a small number of markets in either late 2024 or early 2025, with the goal of eventually engaging consumers at different online and physical touchpoints like in-store displays, a spokesperson said.  

Sister brand Pepsi’s innovation toyed with the iconography of the soda can, reinventing it as an “interactive portal” equipped with digital screens, cutting-edge sound technology and motion sensors. The marketer positioned the Smart Can — which, despite its shape, does not contain soda — as a way to deliver personalized experiences to fans and potentially send exclusive assets, such as access codes.

Smart Cans will factor into future Pepsi promotions with creators around gaming, sports and more, though they are not currently available to purchase at retail. The timeline of the Smart Can marketing efforts wasn’t immediately clear beyond Pepsi having more to share in the coming months. 

Pepsi trying to push the envelope on consumer tech comes as it recently lost a long-held spot as the No. 2 soda brand in the U.S. to Dr Pepper. Marketing chief Todd Kaplan, a company veteran, departed the brand earlier in June.

Mondelēz is pledging to reduce its use of virgin plastic in rigid plastic packaging by at least 25%, or by 5% in its overall plastic packaging portfolio by 2025, according to a statement. It aims to reach its target by eliminating plastic material, increasing its use of recycled content and adopting reuse models for its product portfolio. This goal expanded on the company's promise to become more eco-friendly.

The company has also called for a "reasonable" federal recycling scheme in the United States for flexible plastic films and other plastics. Mondelēz uses the lightweight plastic to lower its environmental footprint, but believes that recycling infrastructure improvements are needed for flexible films.

The snack giant invests more than $30 million each year in technology, resources and recycling infrastructure. Between 2019 and 2025, it expects to spend about $300 million toward plastic sustainability efforts. Although there is no federal framework for plastics recycling, Mondelēz's efforts could greatly benefit from one.

The company is close to hitting its earlier goal to use 5% recycled content by weight in all of its plastic packaging and to design all packaging for recyclability by 2025. According to Mondelēz, 94% of its packaging is already designed to be recycled. But targeting its use of new plastic puts it in step with announcements by other large food and beverage manufacturers. Coca-Cola also rolled out a goal to reduce its use of new plastic by 20% compared to 2018, and Nestlé is spending $2.1 billion to shift from virgin plastic packaging to food-grade recycled products. 

Using recyclable or compostable goods isn't the only way to reduce packaging waste. In recent years, technologies have been introduced to completely do away with some parts of packaging. Südpack, a German company, found a way to get rid of the tray commonly used in meat products and developed a plastic seal that uses 40% less plastic than the film that is currently used to keep meat fresh. General Mills' Nature Valley brand unveiled a recyclable wrapper and has chosen not to patent the material. As a snack company producing treats like Ritz crackers and Oreos, Mondelēz could adapt the wrapper to fit its needs. 

Companies' new initiatives aimed at reducing their impact on the environment have a promising future. Consumers are more interested in reducing the use of plastics, with a 2019 poll from PBS NewsHour showing that 24% of adults in the U.S. are willing to pay 5% more in order to have more eco-friendly everyday plastics available for use.

However, manufacturers' commitments to use recyclable packaging is just one piece of the puzzle. Developing a recycling framework for plastic packaging is another. 

"Increasing recyclability of materials is a great start, but we need actual recycling rates of various materials to increase," Christine Montenegro McGrath, vice president and chief of impact for Mondelēz, said in a statement. "Compared to rigid plastics like PET, flexible plastic films, like the flow wraps we use on our snacks, are still difficult to collect, sort and reprocess economically, because the infrastructure doesn’t exist yet for this to be done at scale."

While there is not currently a federal program in place to support recycling food packaging waste, something may be coming down the pipeline. As a presidential candidate, Joe Biden said that the United States should phase out the use of plastic shopping bags, and community and environmental groups have pushed him to take actions to reduce plastic packaging entering the waste stream. 

Mondelēz's goal came as investors are also putting pressure on Big Food and other companies to limit single-use plastic packaging after the United States failed to sign a 2018 agreement with other G7 countries limiting the use of single-use plastics by 2040. 

The snack giant's stepped-up efforts on plastic packaging could get a needed boost by a greater federal commitment toward recycling and sustainability.

Nature Valley Crunchy granola bars got the first fully recyclable plastic wrappers in early 2021, a first for the category. The new wrappers are a step toward the General Mills brand's goal of having 100% recyclable packaging by 2025.

The wrappers are made with an advanced processing technology that uses unique polyethylene polymers. General Mills did not patent the wrapper and "is welcoming other food brands to apply the technology to their product portfolios," according to a press release.

Single-use plastics, like the kind commonly used to wrap snacks, are an increasing environmental problem, especially because most cannot be recycled. In 2018, discarded packaging made up 82.2 million tons of waste — 28.1% of all waste that year, according to the U.S. Environmental Protection Agency. In that year, 14.5 million tons of plastic packaging was made, and 10 million tons ended up in landfills.

A recyclable snack wrapper could be a game changer for sustainability. And if this one truly is effective, it could help General Mills and several other CPGs meet their environmental commitments.

"As the creator and share leader of the [granola] bar category, we feel a responsibility to continue innovating and encouraging future solutions that could make recycling wrappers even easier,” Brian Higgins, General Mills grain snacks business unit director said in a written statement.

These wrappers can be recycled by dropping them off at How2Recycle centers in grocery stores nationwide. The plastic itself can be turned into synthetic lumber and decking equipment, according to General Mills. And there's adequate notice to consumers that they can recycle the wrappers: Messaging on the box and on each individual wrapper explains that the packaging can be recycled at grocery store drop-offs.

The wrappers themselves have a slightly different look and feel than the single-use ones they are replacing, but nothing that consumers are likely to notice. These are not like the compostable packaging PepsiCo debuted for its SunChips snacks in 2010, which was changed after consumers complained it was too noisy. According to General Mills, the new wrappers still provide the necessary barrier to preserve the product's freshness and do not impact its shelf life. 

While the recyclable wrappers can do the same job as their predecessors, General Mills still faces some challenges to truly making a difference with the new packaging. A recyclable wrapper is useless if it isn't actually recycled. According to statistics from the Hartman Group’s Sustainability 2019 report cited by General Mills, 70% people in the U.S. want to decrease plastic waste but don’t know how. 

In 2017, How2Recycle said more than 225 million pounds of material were recycled through store drop off, and a report on plastic recycling done for the American Chemistry Council says the How2Recycle label has helped people become aware of plastic recycling. General Mills noted more than 90% of people in the United States are within 10 miles of a store drop-off recycling location.

While 225 million pounds of recycled plastic waste in a year through How2Recycle is commendable, it's a drop in the bucket compared to the total annual waste that comes from plastic packaging. As Nature Valley — and other snack brands — roll out recyclable wrappers, it's incumbent on them to also promote and educate consumers on how to recycle them. As a major player in the granola bar space, Nature Valley already has the megaphone to start this initiative. The brand is working with nongovernmental organizations The Recycling Partnership and the Wrap Recycling Action Program, and created a multichannel educational campaign.

If it can successfully promote the packaging and how to recycle it, General Mills is likely to reap the benefits — both in terms of its sustainability reports and in sales. According to a study done during the pandemic by Schorr Packaging, 58% of consumers said they were likely or very likely to purchase food products in packaging that clearly states it is reusable or recyclable. In a separate study, Kearney found the number of consumers who take the environment into consideration when buying food has been on the rise, especially during the pandemic. In 2020, 83% of consumers said they felt that way, up from 71% in 2019. 

Poppi is currently facing  a class action lawsuit for  promising gut claims. The company advertises their drinks as “gut healthy”  — a slogan they’ve since removed from their site.

Top Class Actions reports that the plaintiff claims Poppi drinks are falsely advertised as good for consumers’ gut health, when really they contain minimal prebiotics and too much sugar. Poppi did not respond to Food Dive’s request for comment in time for publication, but in earlier coverage, a spokesperson said the company “stands behind our products and that it believes the lawsuit is baseless, and we will vigorously defend against these allegations.”

The popular soft drink’s sales passed the $100 million mark thanks, in part, to distribution at more than 120 retailers, and its success reflects a rising interest among consumers who want to integrate holistic health into their diets through food and beverage. 

The functional beverage market is valued at over $13 billion, data provider SPINS shared with Food Dive, while kombucha and wellness shot markets are each valued at roughly 1.3 billion. But the recent lawsuit has consumers and companies asking what exactly makes a product “gut healthy” and when is it appropriate to label a product with such buzz words? Turns out, it’s complicated.

Defining “gut-healthy”

The U.S. Food and Drug Administration (FDA) requires clear labeling, and avoiding misleading claims for supplement-based products.

Dr. Kelly Swanson, Director of the Division of Nutritional Sciences at the University of Illinois, authored a trial that found 7.5 grams of agave inulin, a popular ingredient in these types of sodas and waters, might soften stools or increase the number of bowel movements a person has each week. 

Yet, many of these drinks, including Poppi, have less than that, clocking in at around 2 grams. This study and others are becoming important standards in this trial, and the regulation of prebiotic drinks at large. But, like with many health-related concerns, Swanson told Food Dive that it’s not one-size-fits-all solution.

“It depends on the prebiotic in question and the person consuming the food/beverage — their age, body weight, health status, diet, gut microbiota populations, etc. — but most people would require at least 5 grams a day to notice a response. Because the effects/responses will gradually occur with increasing dosages, I am not sure what dose is needed in a product in order to make the regulatory claim [such as] ‘support gut health.’”   

Building consumer trust

Brands hoping to succeed in the prebiotic beverage market should follow guidelines to establish credibility with consumers, according to Ben Goodwin, co-founder, CEO and formulator of OLIPOP. 

“OLIPOP was founded on a commitment to setting a high standard in functional soda. Each 12 oz can meets the FDA's requirements for an excellent source of fiber, and contains three sources of fiber: cassava root, Jerusalem artichoke and chicory root.” 

Goodwin added that the company has completed third-party in-vitro research at Purdue University which indicates that their prebiotic fiber blend benefits multiple gut health-related measures. 

“We are also the first beverage company to earn the NutraStrong Prebiotic-Verified Product Certification, which independently validates the quantity and potency of prebiotics, as well as prebiotic efficacy and stability data.”

Dr. Jenelle Kim, board-certified in Herbology, Oriental Medicine, and Acupuncture from San Diego recommended in an interview with Food Dive that brands prioritize transparency in labeling, using ingredients backed by scientific research, engaging in third-party testing, providing consumers with comprehensive information and adhering to regulations.  

Monetizing “healthy” sodas, carefully

“Consumers are savvier than ever and are looking for convenience, so an on-the-go beverage that tastes good and is healthy in a category they understand — soda — makes sense. It meets the consumer where they are,” said Richard Laver, CEO and founder of Lucky Beverage and Kate Farms in Santa Barbara, Calif. 

“What better place to innovate than soda?  Millions of Americans in schools and lunch spots reach for the cooler, and if they can grab a cleaner soda with enough probiotics, then it just seems practical and tastier.” But, he said, companies shouldn’t bank on a single nutritional feature. “In the food & beverage companies I started, I never leaned into a hero or one individual ingredient. The collection of my ingredients was/is the secret sauce.”

“Healthy” soda companies, our experts agree, should emphasize the soda replacement aspect rather than making true medical claims

Mars Wrigley plans to implement biodegradable wrappers for Skittles as part of a two-year partnership between the confectioner and Danimer Scientific. The partnership was announced in March 2021.

Danimer Scientific is working toward making these packages with its biodegradable material called Nodax polyhydroxyalkanoate (PHA). This material is produced through natural fermentation processes using plant oils including soy and canola. Mars Wrigley and Danimer are currently working together to develop the package. A Mars Wrigley spokesperson said the company's top goal is product quality, and it is working on robust testing. The companies had no target date for when the packages may appear on shelves.

Unlike many of the new eco-friendly packaging plans different manufacturers have put forward, this initiative from Mars Wrigley doesn't require much effort on the part of the consumer to help the planet.

Mars Wrigley has decided to start this initiative small — literally — by making packaging that it said is more likely to become litter rather than be recycled. 

Danimer Scientific is no stranger to working with food and beverage companies. In recent years, it has partnered with several CPG companies to provide them with biodegradable plastic. It signed on to make Nestlé's water bottles biodegradable in 2019. It's working to make biodegradable plastic for Bacardi, which has pledged to make all of its bottles with the material by 2023. And Danimer Scientific is working with QSR supplier Eagle BeveIt also is hiring the expertise to work on all of these projects. Last month, Danimer Scientific hired PepsiCo packaging veteran Brad Rodgers as its new vice president of technology development R&D.rage to make biodegradable plastic straws. 

According to Plastics Today, through existing contracts and agreements, the biodegradable plastics company was at capacity in its Kentucky manufacturing facility at the end of last year.

The packaging company quickly raised capital when it went public through a deal with a special purpose acquisition company on Dec. 30. The IPO raised about $380 million, which the company plans to spend on expanding its manufacturing capacity, according to Packaging Insights.

An analysis of Danimer Scientific by business and finance website Grizzle praised it as a wise investment. The company plans to sell its packaging material at roughly twice the price of petrochemical competitors — about $2 per pound, compared to $1 per pound for traditional plastic — but Grizzle analysts say consumers are willing to pay a premium for sustainable plastic packaging.

Danimer Scientific also is the only company that is close to having a product that's available to go on the market, the analysts say, and the potential for growth is great.

Danimer Scientific CEO Stephen Croskrey told Packaging Insights in January that only 10% of plastic is recycled — and almost a third becomes litter. He sees that as Danimer's biggest opportunity.

“Our specific focus is on single-use plastics, which is where we can add the most value because not only are we renewable but the material goes away," he told the trade publication. "Snack food packaging, straws, cutlery, plates, take-home boxes, these are the kind of things that find their way into the environment and only used for a very short period of time, in some cases just minutes.”

Mars Wrigley has a goal of making 100% of its packaging reusable, recyclable or compostable by 2025. The Skittles wrapper is a good start toward that goal. The technology also could easily expand to other plastic-wrapped confections in Mars Wrigley's portfolio. Once Danimer Scientific has been able to perfect this wrapping, it could be adopted by other CPG companies that rely on flexible plastic packaging. 

The biggest hurdle this agreement seems to face at this point is whether Danimer Scientific will be able to meet its myriad of manufacturing and R&D commitments.