Nestlé invests 2 billion Swiss francs in food-grade recycled plastics in huge circular economy boost

16 Jan 2020 --- Nestlé has announced an investment of up to 2 billion Swiss francs (US$2.08 billion) to pioneer the shift from virgin plastics to food-grade recycled plastics and accelerate the development of innovative sustainable packaging solutions. Building on its 2018 commitment to make 100 percent of its packaging recyclable or reusable by 2025, the food and beverage giant says it will reduce its use of virgin plastics by one third in the same period whilst working with others to advance the circular economy and clean up plastic waste from oceans, lakes and rivers.

Food quality and safety are paramount and packaging plays a major role in ensuring this and preventing food waste. Yet most plastics are difficult to recycle for food packaging, leading to a limited supply of food-grade recycled plastics.

To create a market, Nestlé is committed to sourcing up to 2 million metric tons of food-grade recycled plastics and allocating more than 1.5 billion Swiss francs (US$1.56 billion) to pay a premium for these materials between now and 2025. Nestlé will seek operational efficiencies to keep this initiative earnings neutral.

Richard Kirkman, Chief Technology & Innovation Officer at Veolia UK & Ireland, a leading waste management specialist, outlines the importance of driving market demand for recycled plastics in the overall packaging sustainability picture. “It’s a demand-led industry, so we do not produce more than we are asked to make.”

“There’s a bit of mythology around ‘there’s not enough capacity.’ When there was a [UK] tax imposed on landfill, people started building recycling centers and it is the same with rPET – Veolia will not just make it on the off chance that someone might use it, but if we can see that people will use it because of the regulatory changes, then we will invest the hundreds of millions in the packaging plants to produce the feedstock,” he tells PackagingInsights.

The path towards a waste-free future
Packaging innovation, including new materials, refill systems and recycling solutions, is another key challenge on the path towards a waste-free future. In addition to its significant in-house research through the Nestlé Institute of Packaging Sciences, the company will launch a 250 million Swiss franc (US$260 million) sustainable packaging venture fund to invest in start-up companies that focus on these areas.To drive market growth, Nestlé is committed to sourcing up to 2 million metric tons of food-grade recycled plastics between now and 2025.

These two initiatives come in addition to Nestlé's major ongoing efforts in research, sourcing and manufacturing to make its packaging recyclable or reusable and contribute to its goal to achieve zero net greenhouse gas emissions by 2050. As part of the company's packaging commitment and to increase transparency, Nestlé will continue to outline further initiatives and provide regular progress updates.

“No plastic should end up in landfill or as litter,” comments Mark Schneider, CEO of Nestlé. “Making recycled plastics safe for food is an enormous challenge for our industry. That is why in addition to minimizing plastics use and collecting waste, we want to close the loop and make more plastics infinitely recyclable. We are taking bold steps to create a wider market for food-grade recycled plastics and boost innovation in the packaging industry. We welcome others to join us on this journey.”

In 2019, Nestlé strengthened its commitment and leadership in tackling the issue of plastic waste by joining the New Plastics Economy as a core partner. Applying the principles of the circular economy, the initiative - led by the Ellen MacArthur Foundation - brings together key stakeholders to rethink and redesign the future of plastics, starting with packaging.

“We are pleased to see Nestlé commit a CHF 2 billion investment toward creating a circular economy for plastics, alongside a reduction of its use of virgin plastic in packaging by one third by 2025. By eliminating the plastics we don't need, innovating in areas like reuse models and new materials, and circulating the plastics we do need - also in more challenging food-grade applications - we can create an economy where plastic never becomes waste. Achieving the commitments announced today will significantly contribute towards realizing this vision,” says Andrew Morlet, CEO of the Ellen MacArthur Foundation.

Yesterday, the Ellen MacArthur Foundation has introduced Circulytics, a digital measuring tool that gives companies a fully comprehensive picture of their circularity across all operations. Developed and tested by more than 30 companies from the Ellen MacArthur Foundation’s network, Circulytics informs strategy, allows users to see where they lie in relation to their industry and provides quick understanding for those actively moving away from the current “take, make, waste” linear economy.

Circular economy dreams drive packaging innovation
Nestlé’s investment in packaging innovation and more sustainable waste management models continues to increase. In December, the company joined forces with Mars, recycling and recovery organization Citeo, international energy company Total and plastic recycling technology provider Recycling Technologies to develop an innovative industrial chemical recycling industry in France.Nestlé made a commitment in 2018 to make 100 percent of its packaging recyclable or reusable by 2025.

Understanding consumers’ desire for product traceability and transparency, Nestlé Waters North America (NWNA) introduced code tracking to its Poland Spring plastic bottle labels in November to create an interactive drinking experience. “The sustainability of NWNA’s products isn’t an afterthought when it comes to design – it’s something the company embeds in every stage of its product development. NWNA’s bottles were designed to be recycled and this platform allows the company to remind consumers to help do their part and recycle,” a spokesperson from NWNA tells PackagingInsights.

NWNA also unveiled in its third annual comprehensive national study that while most consumers agree that national plastic waste has gone overboard, nearly half of US citizens surveyed say it is easier to throw away plastic than to recycle it.

In further innovations, Nestlé’s YES! snack became “the first confectionery bar on the market” to be packaged in paper using a high-speed flow wrap technology in November. 

Despite continued investments, an October Break Free From Plastic report named Nestlé, along with Coca-Cola and PepsiCo, as the world’s “top polluting companies.”

“The latest Break Free From Plastic report highlights the continued challenges we face as a society. We know we have an important role to play in shaping sustainable solutions to tackle the issue of plastics waste,” a Nestlé spokesperson said at the time.

Nestlé’s 2 billion Swiss francs investment in food-grade recycled plastics and, in particular, its willingness to pay a premium for these materials between now and 2025, suggests that the Swiss conglomerate is prepared to invest heavily in tackling the global plastic pollution crisis.

By Joshua Poole