FMCG giants shift gears in sustainable packaging, finds GlobalData

Fast-moving consumer goods (FMCG) companies are increasingly pledging to bring the environmental, social and governance (ESG) element into packaging with an aim to address various environmental challenges. Amid mounting pressure from customers, investors, and governments, they are making forward-thinking moves to improve the world by offering ethical, sustainable purchase choices to consumers, says GlobalData, a leading data and analytics company.

GlobalData’s poll conducted in April 2022 highlights that nearly 35% of companies have changed their behavior in the last 12 months to achieve ESG goals.

Kiran Raj, Practice Head of Disruptive Tech at GlobalData, comments: “As we step into a post-COVID-19 pandemic world, consumers are reassessing their purchases and manufacturers are aligning their products to the 4Rs of sustainability–Reduce, Reuse, Recycle, and Recover–given the target date for various ESG standards edge closer. Sustainability seems to have outgrown corporate social responsibility (CSR) tokenism to stand at the top of manufacturers’ business agenda, thus accelerating the shift towards a circular economy.”

Shagun Sachdeva, Project Manager of Disruptive Tech at GlobalData, comments: “Although recycling is a step that companies are heading in the right direction, it is not the ultimate solution to sustainability as many recyclable plastics are simply not recycled and considerable energy is required to turn those used products into new ones. As plastics remain in circulation and recycling waste ends up in landfills, the focus is shifting more towards green packaging materials.”

GlobalData’s Disruptor Intelligence Center highlights some of the recent moves and product launches by various companies that make positive impact on their ESG credentials.

Coca-Cola UNITED partnered with O-I Glass, Inc. to recycle glass bottles in May 2022. The Coca-Cola Company collaborated with Graphic Packaging International to launch United States’ first KeelClip paperboard packaging for multipack cans in June 2022 and with e-commerce retailer Inc to support China’s circular economy in January 2022.

Nestle SA invested around $ 5 million in the Italian venture capital fund Eureka! Fund this January to accelerate the research of innovative packaging solutions, improve the quality of collection and recycling processes, and increase the adoption of recycled food-grade plastics.

PepsiCo inked a deal with Carlsberg Group early this year to minimize its reliance on single-use packaging. It also partnered with blockchain firm Security Matters in June for plastic recycling.

Danone SA moved the entire PS (polystyrene) cups portfolio in the UK to PET cups and launched PET & rPET cups in France, Spain, and Belgium last year. It invested around $6.2 million in Bailleul, France to transform three out of six production lines into PET, and the cups contain 30% recycled PET.

Sachdeva concludes: “Even though key FMCG players have sustainable goals in place for the next 5-8 years, there are still complexities in terms of scaling, long-term planning, and slow market adoption, making it hard for them to execute the sustainability promise with ease. However, in the long run, it will be interesting to watch how companies will make impactful changes on a global scale in the sustainability game.”

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