Nestlé is Investing Billions To Develop a Market for Recycled Plastic

Nestlé says it's getting serious about dealing with plastic packaging waste. Last week, the consumer goods giant announced it will invest up to $2.64 billion to create a market for food-grade recycled plastic. This news follows Nestlé's 2018 commitment to make 100 percent of its packaging recyclable or reusable by 2025 and reduce its use of virgin plastics by a third.

To work toward that commitment, Nestlé pledged to source up to 2 million metric tons of recycled plastics and will allocate more than $1.5 billion to pay for these materials through 2025. Further, the company behind brands like Nespresso and Purina created a $258 million sustainable packaging venture to invest in startups in this space.

Nestlé says it will cut costs in other parts of its operations to free up funds to keep these commitments. The company stated that it will “pay a premium” for recycled plastic as part of its strategy to create a market for food-grade recycled plastic.

These efforts to create a market for recycled plastic works toward its goals to achieve zero environmental impact in its operations by 2030 and zero net greenhouse gas emissions by 2050. In addition to these big goals, the food and beverage giant has several smaller commitments. One of them is avoiding the use of at least 140,000 tons of packaging from 2015 to 2020. To date, the company says it has avoided 118,710 tons of packaging.

“We are taking bold steps to create a wider market for food-grade recycled plastics and boost innovation in the packaging industry,” said Mark Schneider, CEO of Nestlé. “We welcome others to join us on this journey.”

The challenge Nestlé and the food industry face with recycled plastic

Food packaging waste, in general, is a stubborn problem. Containers and packages accounted for 29.9 percent of all municipal solid waste in 2017, with a recycling rate just above 50 percent. Specifically, plastic food packaging waste is an even bigger problem. Although comprising only 5.3 percent of municipal solid waste in 2017, the recycling rate for PET bottles and jars was 29.1 percent. But the overall recycling rate for plastic containers and packaging was a mere 13 percent the same year.

Plastic food packaging not recycled goes to landfills where it emits methane, a greenhouse gas 30 times more potent than carbon dioxide, or ends up in the world’s oceans. There is an estimated 150 million metric tons of ocean plastic waste globally, and 8 million metric tons of new plastics enter the ocean every year. Small pieces of plastic look like food to marine animals, and plastic has been discovered in more than 60 percent of seabirds and in 100 percent of sea turtle species. Plastic ingested can cause life-threatening problems to both wildlife and humans.

Is recycled plastic the only solution to plastic food packaging waste?

There is a growing market for recycled plastic. The value of the global recycled plastics market was $40.26 billion in 2018. By 2026, it is expected to reach $66.74 billion, with a compound annual growth rate of 6.5 percent. But is recycling the only option for dealing with plastic packaging?

Perhaps efforts to reduce single-use packaging are an even better option, some say. Matthias Wüthrich, senior campaigner at Greenpeace Switzerland, warns that Nestlé should not turn to “false solutions such as recycled content and material substitution.” Instead, the company needs to “end its reliance on plastic,” he said, by investing in “new business models instead of just buying recycled plastics.”

More than 450 businesses, governments, and other organizations have pledged to reduce the need for single-use plastic packaging as part of the New Plastics Economy Global Commitment. The signatories include companies representing 20 percent of all plastic packaging produced globally, and Nestlé is one of them.

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