CG and Retailer Collaboration Key to Sustainable Future
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The consumer goods and retail industries have been working toward a sustainability model for decades but have lacked the level of urgency and action required to make a measurable difference. Without significant action, the worldwide environmental crisis will only accelerate and devastate already struggling global ecosystems.
According to statistics compiled by the Sustainability Management School of Switzerland, an estimated 5 trillion plastic bags are used worldwide each year, 400 million tons of plastics are produced, and just 9% of plastic ever produced has been recycled. The global community needs to find a way to greatly reduce its reliance on single-use plastics and embrace a culture of sustainability if the worrisome situation is going to be reversed.
To explore how the CG and retail industries can collaborate and do their part to help make sustainability a reality, CGT brought together thought leaders from across CG, retail and the solution provider sector at the Consumer Goods Sales & Marketing Summit.
Tom Szaky, founder and CEO, TerraCycle; Maxence de Royer, VP strategy, business development and sustainability, Nestlé; and Giles Bolton, responsible sourcing director, Tesco, joined CGT/RIS editor-in-chief Tim Denman for a panel discussion entitled “Strength in Numbers; Tapping into Innovative Partnerships.”
The panelists discussed how they are collaborating to offer innovative sustainability solutions to consumers to greatly reduce CG and retail packaging.
The overall theme of the spirited talk, which can be viewed on-demand here, was two-fold: One, sustainable solutions have to be as easy if not easier for the consumer than single-use options. And, two, success can only be reached when CGs, retailers, solution providers and consumers are all on board and working together toward the common goal of reduced packaging waste.
“We need to make it easy for folks to choose more sustainable options and to do it at scale,” Szaky said during his opening comments, “with great value and the right brands at the right retailers to meet people where they are right now.”
Szaky, de Royer and Bolton are all doing more than just talking about sustainability they are taking concrete steps to reduce packaging waste across the industry.
Tesco, for example, is piloting several initiatives in the U.K. involving reusable containers, harkening back to the old-school, milkman days, where packaging was not one-time use, but rather could be refiled and reused again and again.
The retailer relies to the four R's as it builds its sustainability roadmap: Remove (eliminate as much packaging as possible, Reduce (reduce packaging down to the minimal levels), Recycle (use as much recycled material as possible and make sure everything used is recyclable), and Reuse (leveraging multiple use packaging).
“The Reuse model is really exciting for us,” said Bolton. “But it's incredibly disruptive for the conventional consumer goods model because the supply chains we have now are based on a disposability model. The current system is also very simple for the customer. You finish the product and you throw it away. It's very efficient at the volumes we operate.”
While it is clear the industry needs to adopt a sustainable packaging model, there are operational barriers that must be cleared for both CGs and retailers to make it a widespread reality.
Sustainability is “certainly rooted into our operations, said de Royer. “But what we realize now is that it goes beyond operations and it includes a whole reinvention of our business models. We have made the commitments to having 100% of our packaging's recyclable by 2025.”
The work that TerraCycle and its Loop business along with partners like Tesco and Nestlé is showing the industry what is possible when you strive toward a greater goal, regardless of its profitability.
“Everyone on this panel is spending a tremendous amount of resources on these initiatives,” Szaky said. “We are not seeing that come back in revenue and profits as of yet. We all hope we will, but it's hope. It still has to be proven and a lot more investment of time and money has to occur before that becomes real. Leading voices in the circular economy say it is a multi-trillion dollar opportunity. But it is going to cost a lot to make the transition.”