In a move hailed as a circular economy game changer and praised by the Ellen MacArthur Foundation and Planet Ark, Nestlé has announced it will invest AU$3bn (CHF2bn) to shift from virgin plastic to food-grade recycled plastics.
In 2018, Nestlé joined other major brand owners aligned with the Ellen MacArthur Foundation and committed to 100 per cent of its packaging being recyclable or reusable by 2025. In Australia, that commitment extended to implementing the Australasian Recycling Label across all locally-made products by 2020. In its latest announcement on the $3bn investment, the global food giant said it would reduce its use of virgin plastics by one third in the same period.
Nestlé Oceania's head of corporate affairs, Margaret Stuart, said that while the company works towards 100 per cent of its packaging being recyclable, leading the shift from virgin plastics to food-grade recycled plastics creating a market will be a "game changer".
Stuart said that in Australia, almost a third of packaging in Nestle's supply chain in Australia includes recycled content – predominantly in products packaged in glass and metal, for example Nescafé jars and Milo tins.
The company-wide goal will not only increase the amount of recycled materials used by Nestlé, it will “trigger action across the broader industry”, she said. From a local standpoint, she said the company will work closely with suppliers to develop new packaging solutions as well as ways to advance the local plastics circular economy.
To meet the new global target, Nestlé says it will source up to two million metric tons of food-grade recycled plastics. More than AU$2.2bn (CHF1.5bn) will be allocated to paying a premium for materials between now and its 2025 deadline, the company said.
Through the Nestlé Institute of Packaging Sciences, the company will launch an AU$377m (CHF250m) sustainable packaging venture fund to invest in start-up companies that focus on packaging innovation, including new materials, refill systems and recycling solutions.
In September last year, the company launched the Institute to help it develop sustainable packaging solutions.
At the time, CEO Mark Schneider said it would enable Nestlé to accelerate its efforts at bringing functional, safe and environmentally friendly packaging solutions to market and to address the global challenge of plastic packaging waste.
The new targets and venture fund build on the company’s commitment to research, sourcing and manufacturing to make recyclable or reusable packaging and ultimately contribute to its goal of zero net greenhouse gas emissions by 2050.
The company said it would provide regular progress updates and make operational efficiencies to keep the latest initiative earnings neutral.
For food and beverage manufacturers, the integrity and safety of products is paramount, and packaging plays a major role in that equation. Schneider said: “No plastic should end up in landfill or as litter. Making recycled plastics safe for food is an enormous challenge for our industry.
“That is why in addition to minimising 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.”
Ellen MacArthur Foundation CEO Andrew Morlet said Nestlé's investment toward creating a circular economy for plastics, alongside a reduction of its use of virgin plastic in packaging by one third by 2025, was pleasing.
"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 realising this vision," Morlet said.
Australia's Planet Ark also weighed in, saying it recognises the importance of commitments to using recycled plastics from companies such as Nestlé to the development of robust markets and for recycled materials.
“If Australia’s circular economy is going to truly develop, we need a widespread commitment from major corporations to using recycled content,” says Ryan Collins, Planet Ark’s head of sustainable resource programs.
“It is great to see the commitments to develop innovative packaging solutions from Nestlé. Recycling is really only part of the story. To truly close the recycling loop, we need to be buying back the material being recycled.”