How innovation can solve the plastics and packaging challenge
At PA, we help organisations become more sustainable. We work closely with the Ellen MacArthur Foundation on developing a more circular approach to business, and with the United Nations Global Compact to advise on the applications of disruptive technologies to sustainability. And everywhere we go, across industries and geographies, we see businesses trying to deal with the issue of plastics in their products and packaging.
We could dwell on the threats and problems of plastic, but we believe in the power of ingenuity to create a positive human future. So, we set out with DISRUPTION, a community of business leaders built around disruption, innovation and digital transformation, to research where companies are making positive change.
The resulting report shows that it’s time to get serious about the plastics and packaging challenge. The world has woken up to the impact on the environment and bio-diversity. Plastic has an important role in keeping us safe (think food packaging and medical applications) and reducing carbon emissions (it’s lighter and more durable than glass). But our use – and abuse – of single-use plastic has reached a critical juncture.
Three things are driving responses to the plastics and packaging challenge
For years, experts have warned of the time it takes for plastic to decompose in the natural environment. Scientists have pointed to the ‘Great Pacific garbage patch’ to highlight the damage our waste is doing to the planet. But now their cautions are in the public consciousness, meaning consumers and regulators are pushing for change. At the same time, technology is enabling viable solutions to this global challenge.
Consumer sentiment and behaviour are changing
Consumer sentiment has shifted – they expect brands to take care of the plastics challenge for them. CPGs are responding by making sustainability a top priority. But many still aren’t seeking to understand how sentiment translates into purchasing behaviour, particularly when sustainable alternatives are more expensive.
Legislation around the world is forcing action
Much of the legislative activity is an attempt to encourage enhanced extended producer responsibility (EPR). EPR upholds that companies should seek to understand and improve their supply chains to actively reduce their negative impact. For example, the European Parliament voted to ban single-use plastics in EU member states by 2021.
Technology is enabling viable solutions
The market for innovative technology coming from start-ups, academia and suppliers is thriving. But understanding what will really drive sustainability is tough. Technologies like blockchain can show the end-to-end impact recycled and alternative materials by tracking their full lifecycle.
The opportunity of tackling the plastics and packaging challenge now
With such strong forces compounding around CPGs, retailers and their supply chains, our research highlighted there’s vast opportunities in responding to them sooner, rather than later.
Making changes ahead of legislation will show companies are leaders in sustainability, boosting their reputation among governments, consumers and partners. Adopting innovative technology and manufacturing approaches early can improve operational and resource efficiency, reducing costs. And reusing, repurposing or recycling materials will increasingly look attractive compared to the costs of sourcing, extracting, refining and moulding virgin material.
During our research, we spoke to leaders in some of the world’s top CPGs, finding many are forging fresh paths towards these opportunities. Typically, their strategies fall into three approaches: less plastic, better plastic and no plastic. While these categories seem straightforward, it’s worth looking at exactly what actions some companies are taking.
The less plastic strategy is a gradual approach that scales back the use of plastics through initiatives such as light-weighting. It can help risk-averse CPGs by encouraging continued improvement, but consumers could see it as inaction.
Mondelēz, the owner of Cadbury’s, Oreo, Ritz and more, is making progress in this strategy. In 2014, they committed to reduce the weight of packaging by 65,000 tonnes per year and are on track to do so by 2020.
The better plastic strategy looks to improve recyclability or reuse by reducing contaminants or adding durability. Consumers expect things to be easy to recycle, so this is a crucial step in winning customer trust.
For example, Coca Cola set up the UK’s first bottle-to-bottle reprocessing plant in 2011. It now generates a quarter of plastic content in all new bottles through recycling. And by the end of 2019, Coke’s Smartwater brand will only use recycled plastic.
The no plastic strategy adopts alternatives to plastic that can do a similar job, such as wood pulp, alginate, glass, metal and hemp. These are high-profile actions, but companies need to be certain any new materials they use have robust sustainability credentials.
London-based start-up Notpla, for example, has created an edible and biodegradable material from seaweed that it’s using to replace plastic bottles. At the London Marathon, Lucozade Sport used Notpla to give runners their sports drink without creating any waste plastic.
Reducing, improving and removing plastic
While there’s good progress across the three strategies, and many consumers are calling for ‘no plastic’ to be the priority, organisations often need to blend all three approaches to maximise value. For example, it might make sense for a supermarket to use better, fully recycled and recyclable plastic to protect fresh vegetables on the shelves to prevent food waste, while replacing plastic crates for wooden ones in distribution.
Looking at Mondelēz again, the success of their less plastic strategy spurred them to announce a move to 100% recycled packaging by 2025. With the less plastic strategy firmly in place, they’re now focusing on a better plastic strategy.
Three steps to addressing the plastics and packaging challenge
Based on our experience of helping organisations become more sustainable, and our work with the Ellen MacArthur Foundation and UN Global Compact, we see three steps to successfully implementing a less, better, or no plastic strategy.
1. Build the business case
Sustainability is no longer a cost to business addressed out of an obligation to do good, it’s a driver of value. Making that clear to all stakeholders is crucial to achieving long-term success. Assess customer sentiment to identify areas of growth and the strategy that will most satisfy their needs. And explore the long-term investment cost against the savings from adapting materials and processes.
2. Balance ambition with attainment
Do you set incremental goals to maintain momentum, or audacious ambitions to galvanise action? We see both approaches delivering success. Organisations need to decide which is right for their people, processes and wider business ecosystem.
3. Embrace the disruptors
Many innovations – in new materials and business models – are coming from start-ups. Organisations need to understand when the hype is deserved to determine who to work with. And they need to reassess their own processes and ways of working to ensure they can embrace the disruptors.
There’s never been a better chance to innovate for sustainability
The combination of demand from consumers and regulators, supported by advances in technology, is creating an unprecedented opportunity to innovate for sustainability and tackle the plastics and packaging challenge.
Our research and experience shows that following three steps can set CPGs, retailers and their supply chains on the path to reducing, improving or removing plastics. Now is the time to take bold action to build a positive human future in a technology-driven world.