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How are CPG brands tackling sustainability?

Sustainability efforts and commitments by consumer-packaged goods (CPG) companies have been somewhat of a controversy over the years. However most recently, acceleration of sustainability efforts seems to have increased. This can be largely down to an increase in consumer awareness around the subject along with a generational shift in consumer demands.  

On the surface, meeting consumer expectations should be within a company’s best interests. However, there are several conflicts when it comes down to sustainability and CPG companies. In many cases, what’s good for investors isn’t always good for the planet, and whilst there is an increasing demand for sustainability amongst consumers, investors and executives are still trying to find the fine line between cost efficiency and meeting consumer expectations. New York University’s Stern Center for Sustainable Business may be able to shed some light on the topic, with the creation of the ‘sustainable share index (SSI)’. The SSI, published earlier this year, reviewed consumers purchasing habits from 2013-2018 and found that products marketed as sustainably packaged experienced 5.6x faster growth than those that weren’t, across 36 CPG categories. The research essentially concludes that sustainable products are a key driver for product sales and should provide a solid statistical foundation that CPG companies may use in their future strategies. Below, we outline some key policies and targets from some well-known CPG companies.  

Nestlé

After some heavy criticism in 2018, Nestlé have highlighted plastic as their key sustainability focus for the coming years. The company have stated that they will play an active role in the development of well-functioning collection, sorting and recycling schemes across the countries in which they operate, labeling of their products with clearer recycling information, promoting a market for recycled plastics by increasing the amount of recycled plastic in their packaging, and working with value chain partners and associations to explore different packaging solutions that reduce usage. Nestlé have committed to making 100% of its packaging recyclable or reusable by 2025. The company have also partnered with Danimer Scientific to develop a marine biodegradable and recyclable bottle.

Another commitment made in 2015 was that Nestlé would cut the amount of plastic used in their products by 140,000 tons by 2020—a target that they are on course to achieve.

Danone

Danone has received praise over the years for its proactive sustainability efforts. The company launched its refreshed logo and signature to state, ‘One Planet. One Health’ back in 2017, and has since made further commitments to helping the planet. Along with committing to become carbon neutral by 2050, Danone has highlighted the following as priorities for the business; offering superior food experiences and innovation, delivering stronger sustainable profitable growth, becoming a certified B corporation, and renewing the planets resources. It’s also worth noting that as a global company operating in 130 countries, Danone’s goals have all been developed in line with the United Nations Sustainable Development goals. 

PepsiCo

Earlier this year, PepsiCo released their sustainability report. The report highlights six key priority areas; next generation agriculture, positive water impact, circular future for packaging, improved choices across our portfolio, climate change mitigation, and people & prosperity. Some key metrics include, designing 100% of packaging to be recyclable, compostable or biodegradable by 2025, improving water-use efficiency by 15% in their agricultural supply chain and reducing their greenhouse gas emissions by 20% by 2030. It’s worth noting that PepsiCo also partnered with Danimer Scientific to develop a biodegradable film resin that meet the sustainable flexible-packaging requirements of the brand.

Mars

Mars has highlighted five key areas towards it’s ‘healthy planet’ efforts: climate action, water stewardship, land use, transparency and measurement, and packaging. The first part of their strategy includes a strict reduction in total greenhouse gas emissions, with targets set at 67% by 2050 and 27% by 2025 (from 2015 figures). The company strongly believe in science-based targets and have worked closely with the Science Based Target Initiative to calculate their share of the global carbon budget. Mars have even stated that they will refuse to work with any company not willing to adopt science-based targets. Another part of their strategy is to try and engage younger consumers by enabling them to make educated individual efforts to protect the planet. You can read more about the initiative on their website here.

 

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