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Launching a Corporate Packaging Sustainability Program: Lessons from the Nestlé USA Beverage Division

By: Candace Hodder, Clean Agency

Why launch a packaging sustainability program? How should it be structured? And what benefits can a program provide?

Though the answers to these questions will differ slightly for each organization, they will likely share important commonalities. In 2009, Nestlé USA’s Beverage Division launched a successful packaging sustainability assessment and improvement initiative called PackSmart. Lessons from this program are provided below, in the hope that they will prove useful to other companies embarking on packaging sustainability.

Motivations: Why Packaging Sustainability?

When the Nestlé USA Beverage Division made the decision to design and implement a packaging sustainability initiative, a number of motivating factors were at play.

Internally, the company as a whole was increasing its focus on corporate environmental goals in a variety of areas including water, rural development, nutrition and environmental sustainability. Within the environmental sustainability area, however, it was felt that more could be done to understand and reduce the environmental impact created by the Division’s packaging.

External factors also contributed to the decision. The beverage industry as a whole was starting to experience increased environmental scrutiny from consumers, particularly with respect to bottled water and other ready-to-drink products. Consumers’ green purchasing preferences were also increasing, and competitors were beginning to message much more actively on the environmental performance of their packaging.

Division leaders therefore made the decision that it was time to get strategic about more sustainable packaging.

Scoping the Initiative

There are a number of different ways to approach packaging sustainability. Before initiating their packaging sustainability initiative, Nestlé considered a number of different approaches. As a large division with several distinct brands and nearly 100 different package types, scoping the project was a crucial decision.

Nestlé Scope Consideration: What about studying a single brand?

There were a number of arguments for starting with in-depth study of one brand, particularly in that it aligns with the employee structure at Nestlé. However, the resulting impact would also then be limited

to one brand, which would not necessarily allow the company to glean insights and best practices that could be applied across multiple brands.

Nestlé Scope Consideration: What about assessing a single type of packaging?

This approach would focus analysis on a key material or package type, from which targeted solutions could be developed. However, this solution would only allow for assessment and improvement in one area, and would not lead to a full understand the complete range of lifecycle impacts associated with Beverage Division packaging.

Ultimately, therefore, the Division chose a holistic approach to packaging sustainability, implemented through screening life cycle assessments of the entire portfolio of beverage packages and complementary competitive and consumer market research. This strategy, the Division felt, would provide a better opportunity to build engrain sustainability into the Division’s culture over the long-term.

Given the ambitious scope chosen, the Division engaged Clean Agency, a California-based sustainability consulting firm, for support managing and carrying out the project.

Desired Outcomes

The type of packaging sustainability initiative to create greatly depends on a company’s desired outcomes. Nestlé had a number of overarching goals in mind upon initiation of the project, which the packaging sustainability was designed specifically to achieve from the start.

Nestlé Goal: Engage Employees

With the intent to make this a truly division-wide program, engagement with a cross-functional team was a priority. Firstly, the project was first given a name and logo (PackSmart, seen below). This branding gave the program life from the start; the “PackSmart” program confers a more serious intention for the project and presence in the company than “that green project” is likely to.

Employees within and outside of the cross-functional PackSmart team were informed regularly of project updates through meetings, branded e-newsletters and internal presentations.

Nestlé Goal: Gather Data

Prior to PackSmart, sustainability renovations to Beverage Division packages had been accomplished on a “one-off” basis. In other words, there had been no previous systematic, wide-scale assessment of packaging from an environmental perspective. As such, the company did not yet have a solid understanding of the relative environmental impacts of their packages. One of the goals of the PackSmart project, therefore, was to amass data on the entire beverage division portfolio, which could then serve as the baseline from which to mark improvements.

The other data the company desired to acquire was on customer and competitor in the realm of sustainability and packaging. As such, the project included extensive market research into customer and competitor behavior in order to isolate opportunities for collaboration with customers and market differentiation from competitors.

Nestlé Goal: Find Opportunities for Environmental Improvement

Obviously, one of the major goals of any packaging sustainability program should be to isolate solutions for environmental improvements. The PackSmart project included the creation of a “project pipeline”, through which 50+ packaging solutions were identified and vetted for feasibility. These solutions ranged from “foundational” to “consumer-facing” to “transformational”. Offering solutions that ran the gamut from simple to complex increased the likelihood that different brand teams would find solutions that appealed to them, in spite of different levels of comfort and experience with sustainability projects.

And, as we all know, sustainability renovations that improve efficiencies can result in significant cost savings. To date, projects from the Beverage Division’s PackSmart project pipeline have led to savings of approximately $2 million for the division.

Nestlé Goal: Understand and Address Consumer Needs

The company had understood in a general sense that some of their consumers had questions or concerns related to packaging and sustainability, but did not have a strong sense of their consumers’ overall sustainability needs. Therefore, as a component of the PackSmart project, a survey of sustainability-related consumer queries was conducted to identify trends and hot button issues. Additional market research was also analyzed to isolate sustainability-related awareness across broader consumer groups.

This data, combined with the assessment results, enabled Nestlé to identify and prioritize solutions that improve environmental impact as well as address consumer needs.

Nestlé Goal: Ingrain Sustainability into Corporate Culture

Internally, PackSmart would not have been considered a success if it was just a flash in the pan. As a component of PackSmart, therefore, project approval and implementation processes were carefully analyzed, and the best opportunities were to integrate sustainability were identified.

With the baseline of data gathered, Nestlé could transition into phase two of the project: the setting and tracking of internal packaging improvement goals. These goals maintain momentum for ongoing pipeline project implementation, and enable the Beverage Division to contribute to Nestlé’s global corporate sustainability progress in a more significant and lasting way.