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March 7, 2022updated 23 Mar 2022 2:42pm

The food industry needs to be more proactive on plastic

The time is now for CPG companies to get out in front, set the agenda and lead on the problem of single-use plastic food and beverage packaging, writes Victor Martino.

By Victor Martino

Food and beverage companies, particularly the majors, need to get more proactive in setting the agenda for – and moving forward on – eliminating non-sustainable packaging, particularly the use of virgin and non-recyclable plastic.

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What’s the forecast for the food and grocery industry?

The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sector’s subsequent necessity, panic-induced bulk purchasing, and spending more time at home. The market has grown as a result of inflation. Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. As consumer behavior changes, we consume more food and drink at home, and inflation increases basket sizes. GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. This is true despite the fact that the food and grocery sector's share of overall retail will decline from its peak in 2020. This report will discuss market forecasts and key themes in the global food & grocery industry in 2022 and beyond. It covers:
  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
by GlobalData
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A number of the largest companies, including Nestlé, Unilever, Kraft Heinz, PepsiCo and Coca-Cola are making progress, albeit slowly, on the goal of using more sustainable packaging as part of their corporate ESG goals.

However, the reality is these initiatives are primarily reactive – responding to government mandates, consumer movements and, more significantly, activist groups like Berkeley, California-based As You Sow, which has made the elimination of virgin plastic and non-recyclable plastic food and beverage packaging by CPG companies one of its central missions.

The CPG industry and packaged food and drink companies are at the tip of the spear when it comes to the issue of non-sustainable, single-use, plastic packaging because of the nature of the business.

Being reactive – allowing others to set the agenda for the elimination of these plastic packaging materials – rather than proactive is a prescription for disaster for the industry as a whole and for individual companies. In life, as in politics and business, those who set the agenda and follow through on it tend to be the ones who come out on top across the board. Conversely, let others set the agenda for you and you’re forever leading from behind.

As You Sow, which seeks to promote environmental and social corporate responsibility through shareholder advocacy, coalition building and innovative legal strategies, reached an agreement with Coca-Cola. The deal that resulted in the drinks giant’s announcement that it will significantly boost its use of reusable packaging, with a goal of having at least 25% of all the beverages it produces and sells in refillable/returnable glass or plastic bottles. The move would likely not have been made now without the pressure from the advocacy group.

Kraft Heinz, the third-largest food-and-beverage company in North America, has agreed to set a goal to reduce total virgin plastic use, following the filing of a shareholder proposal spearheaded by As You Sow and discussion with leaders of the environmental and corporate responsibility organisation.

These are positive moves by Coca-Cola and Kraft Heinz towards what needs to be the overall industry goal of eventually eliminating the use of virgin plastics and non-reusable plastics for food and beverage packaging – but they’re reactive rather than proactive, which isn’t unusual in the interplay of corporate and environmental issues and concerns in the US. My argument though is that it’s time for the CPG industry and packaged food and drink companies to change this paradigm and go on the offensive, setting their own agenda and then walking the talk when it comes to moving towards 100% sustainable packaging.

Doing this is, of course, easier said than done, something I understand first-hand because I work day-to-day in the consumer packaged goods industry. Plastic packaging, for example, particularly since the start of the pandemic, is in many cases the food and drink packaging that consumers love to hate. They hate its environmental impact but often privately love it for its perceived food safety attributes.

And many, if not most, consumers don’t differentiate if the plastic packaging is made from virgin or reusable plastic, although this is increasingly changing as consumers elevate sustainability near the top of their concerns when it comes to the food and beverage brands they purchase.

To walk my own talk (or words) about being proactive, these are five agenda items I suggest packaged food and drink companies do today in order to get out in front in the movement to reduce and ultimately eliminate single-use plastic packaging. The first three are for CPG companies. The last two are industry-wide initiatives.

  • Set a goal to immediately reduce the use of virgin and non-reusable plastic in food and beverage packaging across all brands by a realistic percentage and make that goal public. Don’t wait for government mandates, stakeholder filings or external pressure from individuals or groups to do it.
  • Adopt a policy of switching to non-plastic biodegradable and/or compostable packaging for existing packaged food products whenever doing so is possible. Make these more sustainable packaging options an even greater priority for new brands and products. When not possible, pledge not to use non-reusable plastic packaging only. There are many sustainable food packaging alternatives being developed, including new packaging innovations made from mycelium and hemp. Compostable packaging is also increasingly becoming an affordable option.
  • Educate consumers on why it’s important for packaged food and drink companies to move away from single-use plastic packaging to sustainable alternatives – and be frank with them that, at least initially, it will mean slightly higher prices for the products they buy at retail. This may sound counterintuitive, particularly in this time of food price inflation but it can work and, if CPG companies don’t do it, local, state and the federal government will impose additional taxes on single-use packaging. It’s already happening in a number of regions – which will achieve the same outcome, higher costs for products being passed on to consumers at retail. It’s all about being proactive and elevating the reduction and eventual elimination of single-use plastic packaging as an agenda item for packaged food and beverage companies. It’s time to be bold.
  • Industrywide, there’s a need for a bold new initiative between the CPG industry and grocery retailers – which face similar issues because they use a lot of single-use plastic in their in-store bakeries, foodservice and other departments – designed to both work jointly to reduce and eventually eliminate single-use plastic packaging, as well as to educate the public about its importance. The two industries are partners as the suppliers to – and agents for – consumers. It’s essential they also partner on this important issue.
  • There also needs to be greater intra-industry cooperation on reducing and eventually eliminating single-use plastic packaging. This is difficult for a variety of reasons but is essential. The first step in this process is to develop a “best practices” position as to why, how and how fast, reduction and elimination should happen. Initiatives like Unilever’s Together For Our Planet and PepsiCo’s Pep+ ESG initiative are a good start in terms of industry benchmarking.

In a bold move in January, Unilever called for a UN treaty designed to tackle the plastic waste and pollution crisis, which is a good example of the kind of collective action that needs to be taken globally as well as by nations, industry and individual companies.

And there were signs of optimism last week at the UN, where 175 nations endorsed a resolution to end plastic pollution and forge a legally-binding international agreement, covering “the full lifecycle of plastic” by the end of 2024.

The time is now for the industry as a whole and CPG companies individually to proactively tackle the problem of single-use plastic food and beverage packaging. The best way to do this is to get out in front, set the agenda and lead.

The global climate crisis, plastic pollution and the rapidly-growing consumer concern about brands being sustainable brands all cry out for leadership and action, particularly from the big brand companies. Some majors are leading the way, along with a growing army of sustainability-focused emerging food and beverage brands. It’s better to seize the opportunity now rather than wait and allow the agenda to be set by others. It’s also the right thing to do for people and the planet.

just-food columnist Victor Martino is a California-based strategic marketing and business development consultant, analyst, entrepreneur and writer, specialising in the food and grocery industry. He is available for consultation at: victorrmartino415@gmail.com and https://twitter.com/VictorMartino01.

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Free Report
img

What’s the forecast for the food and grocery industry?

The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sector’s subsequent necessity, panic-induced bulk purchasing, and spending more time at home. The market has grown as a result of inflation. Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. As consumer behavior changes, we consume more food and drink at home, and inflation increases basket sizes. GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. This is true despite the fact that the food and grocery sector's share of overall retail will decline from its peak in 2020. This report will discuss market forecasts and key themes in the global food & grocery industry in 2022 and beyond. It covers:
  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
by GlobalData
Enter your details here to receive your free Report.

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