Interview with Nestlé Waters’ New Sustainability Director: Part 2

This is a continuation of the interview in three parts with Michael Washburn, newly appointed Director of Sustainability for Nestlé Waters North America.

3p: If your number one sustainability concern is the bottle, why not move to a 100% recycled PET bottled as Naked Juice has done?

MW: Are you familiar with our Resource brand? It uses 50% recycled PET in its construction.  Deer Park also uses 40% r-PET. So the company is already moving in that direction. Why don’t we go to 100% right now?

It’s a supply issue. There is a price dynamic that sucks the available plastic off-shore, because the Chinese can outbid what domestic users will pay for the plastic since it costs them so little to handle once they get it. The people in possession of the material are going to sell it to the highest bidder. A lot of work needs to be done around changing those price dynamics before we can dramatically increase the percentage of r-PET without dramatically increasing the price of the product. But having said that, one of the reasons they brought me onboard was to look at ways that we can get there faster. We’re currently working with Greenopolis and with Keep America Beautiful on a number of pilot programs to help encourage recycling where we can measure results. These are essentially research programs and what we’re hoping to do is to implement at the municipal level, a fairly broad extended producer responsibility agreement where we would fund the capacity to do the collection, both curbside and away from home and test some results around which venues are getting the highest collection rates for which materials and really crunch the data carefully and compare it to previous data. If we can figure out, at the local level, what models are most effective and efficient to implement, then if legislation comes forward for EPR, then we’ll be in a better position to offer some solutions to offer people to implement in real time, trying to get ahead of that curve a little bit. We’d like to see national EPR legislation for all packaging, but I’m not sure the industry is there yet.

3p: What is your reporting relationship in the company and who sets the agenda?

MW: I report primarily to Heidi Paul, VP of Corporate Affairs, with a dotted line relationship to the executive team and I also work closely with the VP of legislative affairs. But I’m with Kim [Jeffrey, CEO] weekly and I regularly meet with our natural resource managers, plant managers and so forth. I’m getting pretty good exposure to the various corners of the company. Kim Jeffrey is very committed to seeing extended producer responsibility take hold in the United States. How we get there, of course, is another question. I have quite a bit of discretion, though of course there are a lot of other players involved. I do have a lot of autonomy as far as setting my scope. One of the issues, for example, is the actual management of our forest land in multiple states around the country. Given my background in forest management, I’ve been in consultation with some of our natural resource managers about that. Of course, that’s key for the quality of the water. In fact, Nestlé is now taking a look at their global forest policy because of concerns about things like palm oil and things like that, that I will be involved in as that policy comes forward. I’ve also been involved in the broader question of procurement of materials for our bottles, such as, should we be using plastic labels or paper, what are the respective greenhouse gas implications of that? There are a whole suite of issues that I think are interesting that are connected to work I’ve done in the past. I can’t say precisely what I will do in the first year or two. I’m mostly in an intake mode right now.

3p: Like what issues?

One of them is our alternative energy goals. We want to move to alternative energy at our plants as soon as it’s feasible. We need to map out those alternatives, what sources are available.  What are the rates? And so forth. I think we’re pretty efficient, but I think there are opportunities to make sure that we are using the most responsible paper products, both for our marketing collateral as well as our office copy paper, hopefully without paying anymore for it. We currently have 50 people in the company who buy paper, so we have issues like figuring out how to collectively negotiate the supply agreement.

Take a look at our Deer Park brand, for example. We have 40% r-PET bottles going on delivery trucks that have hybrid engines. Now, if we could get renewable energy down there, that would make a great case study. But I don’t want to just pull off a small scale thing and then rest on our laurels either.

3p: We’ve talked a lot about cost, but what if it turns out that it will cost a little more to take some of these steps. What would be your approach to senior management?

MW: Well, a parallel process needs to be planned out around efficiency as well. Are we running the most efficient machines? Over time, we do switch out machines and if that reduces our consumption, then we can switch to a different energy source and keep our costs the same, there’s an opportunity there, too. What I need to do is really get around this company and get inside people’s heads and understand what we are doing because, the worst thing that could happen is that there are opportunities and we didn’t know they were there.

3p: I mean, couldn’t you make the case on other points, like reputation, consumer loyalty?

MW: My job is to reveal the opportunities and get the right people looking at them at the right time. Sure there’s reputation value, there’s brand value…

We’ve taken a lot of heat from NGO’s about painting these pictures of pristine landscapes on our bottles. It turns out, there really are some pristine landscapes, I’ve been to some of them and I think there’s a real story there, not only around our tending of the natural resource, and the distinction that that brings to the product, but also the fact that this is the lowest greenhouse gas emitting packaged beverage in the marketplace. I don’t think most consumers understand that. So if that’s a value to folks, we need to talk about it. If we get resonance in the marketplace, for talking about these kinds of attributes, that probably gets us the opportunity to leverage some additional change across the company.

Interview continues here...

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RP Siegel is the co-author of the eco-thriller Vapor Trails.  Like airplanes, we all leave behind a vapor trail. And though we can easily see others’, we rarely see our own.

Follow RP Siegel on Twitter.