February 11, 2008
Beverage companies take on environmental concernsThe United States is in the midst of a green movement â€” not for the first time, but with more pressure, perhaps, on consumer products companies than ever before. In fact, a recent study released by the Grocery Manufacturers Association and Deloitte Consulting said sustainability is “unlike any business issue consumer businesses have encountered in the past.”
“While the issues associated with sustainability â€” such as waste management, commodity shortages and energy usage â€” are nothing new, the expectations of shareholders, consumers, regulators and other constituencies have changed, pushing sustainability to the top of the agenda for consumer products companies,” said Peter Capozucca, one of the study’s authors at Deloitte Consulting. “It is unlike any business issue consumer businesses have encountered in the past. The industry’s large environmental footprint and unique dependencies on agricultural inputs, water and packaging, make sustainability a critical strategic issue that consumer packaged goods companies must address proactively.”
The study found nearly 85 percent of consumer companies have sustainability initiatives, mainly in the form of recycling efforts and energy consumption. It also indicates the companies that implement successful sustainability programs are the ones that include direct involvement from the chief executive officer, and collaborate with suppliers, the scientific community and academics.
Interestingly, some consumer surveys report the public is only moderately concerned with the environment. Yankelovich Inc. found nearly one-third of consumers feel much more concerned with environmental issues than they did a year ago. A little less than a quarter of consumers, however, feel their efforts have no impact when it comes to the environment.
That’s not to say companies should do nothing, the study’s authors point out. The environment is a “strong concern” for 30 million Americans, representing an important segment of the population. In addition, companies still will be required to meet stricter regulations â€” often at a high price â€” and should leverage those changes with consumers, it says.
Singled outOf all the beverage categories, bottled water has taken the biggest hit regarding environmental concerns. The segment has received a barrage of bad press, and even has been banished from some locations. San Francisco recently banned sales of bottled water at city and county government locations, and a Chicago alderman reportedly has proposed a special tax on bottled water (ironically, the idea is meant to cover a budget shortfall due to declining use of public water, which stands in sharp contrast to those who fear bottled water might actually deplete public sources). Restaurants such as Chez Panisse in Berkeley, Calif., and Poggio in Sausalito, Calif., have stopped selling bottled water in favor of filtered tap water.
Bottled water is being scrutinized by those who compare it to tap water, not other packaged beverages, says Jane Lazgin, director of corporate communications for Nestlé Waters North America, Stamford, Conn. “In our on-the-go society, 70 percent of what consumers drink comes from a packaged container. But you can't get soda out of a tap,” she says.
The reality is that bottled water is a popular beverage choice these days. Last year, bottled water volume increased 9.5 percent from 2005, making it the second-largest commercial beverage category, according to the International Bottled Water Association (IBWA).
“Bottled water is simple, refreshing and healthful because it has no calories,” Lazgin says. “Especially in the small pack, bottled water is an alternative to other bottled beverages. Tap water is not a primary competitor. We think that people recognize the value of water to a healthy lifestyle, regardless of its source.
“We share the environmental concerns about plastic beverage containers and outdated recycling programs and we’re doing a lot to address them,” she adds. “But we also have a concern [about] these media stories. People should not be discouraged from choosing water, wherever it may be available to them.”
Nestlé Waters is addressing environmental concerns with the new Eco-shape bottle (see sidebar), and has a number of production facilities that were built according to standards created by the U.S. Green Building Council’s Leadership in Energy & Environmental Design (LEED) program. The company’s Cabazon, Calif., plant, for example, received a Silver LEED rating, and uses natural lighting, high-efficiency mechanical and electrical systems, and water-conserving fixtures, among other eco-friendly features. (For an in-depth report on the Cabazon plant, visit bevindustry.com).
The IBWA also is taking on the environmental challenge, with a recent media blitz to “virtually every major U.S. media outlet and in local markets nationwide.” The association is attempting to educate the media and consumers about the industry's environmental record and support of recycling, bottled water regulation and safety. The move included full-page advertisements in The New York Times and The San Francisco Chronicle.
“If the debate is about the impact of plastic packaging on the environment, a narrow focus on bottled water spotlights only a small portion of the packaged beverage category and an even smaller sliver of the universe of packaged products,” said IBWA president and chief executive officer Joseph Doss, in a statement. “Any efforts to reduce the resources necessary to produce and distribute packaged goods â€” and increase recycling rates â€” must focus on all packaging. Any other approach misses a real opportunity to arrive at a comprehensive solution to protecting and sustaining the environment.”
Leading the effortIn the beverage arena, some companies have seized leadership opportunities on the issue of the environment, adopting green practices and even guiding consumers into green behavior.
Greg Owsley, chief branding officer at New Belgium Brewing, Fort Collins, Colo., told Beverage Industry last month that his company has used the “cool” factor of its popular Fat Tire beer brand to lead consumers into green thinking.
“We’re not a heavy manufacturer,” he said in the July issue. “We don’t use a ton of energy. We’re not that big of an impact on the planet compared to some other corporations and manufacturers out there. But we do have a special platform. Beer is cool. What if beer went out and helped sustainability?
“If you think about environmentalism, everything you ever hear is super bad,” he continues. “Environmentalism is doom and gloom, and people, if they want to commit to sustainability, usually it’s all about abstinence and giving things up in your life. Who better than a brewery to go out there and say sustainability doesn’t have to be all about abstinence. It can be a load of fun too. That’s what we wanted to show them.”
The company features a number of green initiatives from wind powered electricity to high-efficiency lighting to the types of inks it uses on its packaging.
Packaging is likely the biggest environmental obstacle any beverage company will face. “At the end of the day, unless someone is solely drinking out of a tap, they’re looking to be able to enjoy a product that needs to be delivered in some format,” says Scott Vitters, director of sustainable packaging at Coca-Cola.
“There is a basic value that packaging provides to us as consumers, and what we’re focusing on is how do we continuously improve that performance,” he says. “We’re looking at not only the package, but also ensuring that the product is protected, looking at the transportation impact related to distributing, and finally, what are the consumer’s needs or desires.”
Environmentally friendly packaging begins at the design stage. Martha Leflar, project manager at the Sustainable Packaging Coalition, Charlottesville, Va., says her organization focuses most of its attention on packaging design and encouraging designers to consider end-of-life scenarios at the very beginning of the process. “We’re always trying to get our packaging designers to ask better questions at the point of design: ‘How do I design for recycling?’ ‘How do I source healthy materials?’ ‘How do I source recycled content?’”
The Sustainable Packaging Coalition has developed a definition of sustainable packaging to guide members, which include consumer product companies and suppliers, in their efforts. According to that definition, sustainable packaging:
• Is beneficial, safe and healthy for individuals and communities throughout its lifecycle;
• Meets market criteria for performance and cost;
• Is sourced, manufactured, transported and recycled using renewable energy;
• Maximizes the use of renewable or recycled source materials;
• Is manufactured using clean production technologies and best practices;
• Is made from materials healthy in all probable end-of-life scenarios;
• Is physically designed to optimize materials and energy;
• Is effectively recovered and utilized in bio logical and/or industrial cradle-to-cradle cycles.
No packaging format currently fits the definition, but the council is developing a tool that will help designers get closer. MERGE, as the project is known, was developed during the 1990s and is being updated this year with current lifecycle inventory data. It allows companies to put two packaging formats side by side and measure environmental metrics such as greenhouse gas emissions, energy consumption and use of resources. The updated tool is expected to be available next spring.
“This will really help designers know if they are taking a step forward or a step back,” Leflar says. “If you’re in the design phase, you can figure out if this is a better design than this one. Then, before you make millions of them and ship them all over the world, you already know this is the path you want to go down â€” focusing on the point of design, making all those decisions that cascade down into the environmental effects after the bottle is made.”
Closing the loopIn addition to designing more eco-friendly containers, the beverage industry has an opportunity to help increase recycling rates at the end of the product lifecycle.
“People have greater environmental consciousness than they’ve ever had before, but the recycling rates are dismal,” Nestle Waters’ Lazgin says. “Recycling is a huge topic. It needs to be revitalized. It needs to find a good model.”
Beverage containers are among the most recyclable packages on the market, and their recycling rates are higher than many other packages â€” but that isn’t saying much. The U.S. Environmental Protection Agency reports that 34 percent of plastic soft drink bottles and 45 percent of aluminum beer and soft drink cans are recycled. According to some reports, the overall recycling rates for plastic material, when other food and non-food products are factored in, is as low as 6 percent.
The Sustainable Packaging Coalition’s Leflar says a lack of consistent information is one of the factors keeping recycling rates low. “There is no uniform system to label all packaging as to how you recycle it,” she says. “Until we get a labeling scheme that crosses materials and really gives consumers direction, we’re going to have a hard time alleviating those misunderstandings.”
Several communities have experimented with ways to increase recycling rates. A program in Philadelphia, for example, uses RFID technology to tag consumers’ recycling bins and compensates participating households based on the amount of material they recycle. Consumers receive credits to spend with local retailers.
“We’ve seen 90 percent participation rate in the communities where the program has been launched, and taken recycling rates that were down under 10 percent [to] upwards of 30 to 50 percent,” Vitters says.
San Francisco has been cited for the city’s 69 percent recycling rate, which has been enabled by a single-stream collection system that sorts all of the city’s recyclable materials in a 200,000-square-foot facility.
“I would love to design a recycling scheme where the consumer never had to think; it just happens,” Leflar says. “I have to believe industry is capable of doing that. Nobody ever asked for a Hummer â€” they made it and they made you think you wanted it, and then you wanted it. So I really think that if we were to pool the knowledge that is sitting in industry, we could come up with a better system to get these materials back. They are valuable materials.”
Her comments are echoed by Coca-Cola’s Vitters, who says, “We have a vision around having our packaging no longer seen as waste but as a valuable resource for future use.”
The majority of beverage packaging has post-consumer value. Recycled aluminum cans, for example, are some of the most valuable packaging materials today, as demand for aluminum currently outstrips the supply. And according to the Aluminum Association, recycled cans also require 95 percent less energy and 95 percent fewer gas emissions to get to a store shelf than virgin material.
Coca-Cola uses upward of 70 percent recycled aluminum content in the United States, Vitters says, and since 1991 has used recycled PET material in its plastic bottles. Today’s packages are designed with recycling in mind, he says, pointing to the Dasani bottle as an example. The first Dasani design used a dark blue PET, but the company found there was little end-market value for the darker color. It changed the color to a lighter blue that can be included in the clear PET stream, which has a higher value.
“I could say the same in terms of the kinds of caps we use in a bottle, the types of glues, the types of inks on labels,” he says. “All are considered from a recycling perspective to maximize the value of that material for the recycler and ensuring it’s compatible with the recycling streams.”
Warming trendWhile packaging is the most visible way in which beverage companies affect the environment, it is the issue of climate change that is fueling overall environmental concern these days. Here, too, the industry is making an impact. Earlier this year, the EPA named PepsiCo as the top purchaser of green power, purchasing more than 1.1 billion kilowatt hours per year of green energy.
Even more impressive, Pepsi Bottling Group and PepsiAmericas, the company’s two largest bottlers in the United States, also made the list of the EPA’s Top 25 purchasers of green energy (at No. 4 and No. 13, respectively). The Pepsi Bottling Group has committed to buying 458 million kilowatt hours of green power per year, and PepsiAmericas 157 million kilowatt hours. “The Pepsi bottler purchase demonstrates that a group of companies, tied together by a supply chain, can help protect the environment by buying green power,” the EPA said in its announcement of the Top 25.
In addition to the soft drink companies, Starbucks Coffee Co. and Whole Foods Market also made the list. The EPA classifies alternative energy sources such as solar, wind, geothermal, biomass and biogas, and low-impact hydropower as green energy sources.
Coca-Cola also was recognized by the EPA earlier this year for its Columbus, Ohio, syrup plant’s participation in the Performance Track leadership program.
“We’re trying to make sure that the Coca-Cola Co. is around for a long time, and to do that, we have to have an environmental footprint that is as small as we can make it,” says Bruce Karas, director of health safety and environmental services for Coca-Cola North America. “We’re a member of each community that we operate in and we want to make sure that plant or facility is viewed as a good citizen in that environment and people look at us as a very clean, green operation.”
Karas says the company’s participation in the EPA program factors in a number of production elements, including water use, energy consumption, waste disposal and community outreach.
Water conservation has become a major initiative for the company, which this summer announced a $20 million partnership with the World Wildlife Fund. The announcement included plans to reduce the water used to produce its beverages, recycle water used for beverage manufacturing and replenish water in local communities. As part of the WWF partnership, the company committed to help conserve seven of the world’s freshwater river basins, support more efficient water management in its operations and global supply chain, and reduce its carbon footprint.
At the plant level, the plan includes efficient water use and wastewater processes. “Most of the water goes into the beverages that we make,” Karas says. “But there is water that we use for cleaning and other things. It’s looking at where we can find those efficiencies. It’s looking at wastewater … Our objective was to really build a wastewater treatment plant that lowers the things going into the effluent stream.”
Karas indicates the company also worked on issues such as lighting â€” using more efficient lighting and systems that automatically turn off lights and power in areas of the plant where they are not needed â€” as well as solid waste reduction.
“In a manufacturing plant, the obvious things you look at are things that don’t go into your product,” he says. “It’s packaging materials, pallets, shrinkwrap and so forth.”
The EPA Performance Track program is one of two government-related programs the company has undertaken at its Columbus plant, as well as a number of the 21 plants it operates in North America related to syrup production, bottled water and Minute Maid juices. The company also participated in the Occupational Safety and Health Administration’s Voluntary Protection Program, receiving a Star rating, OSHA’s highest ranking for the program.
Karas says both programs provided information and support that made transitions in the plant easier. From mentoring to regular conference calls and Webcasts, the programs provided opportunities to learn from other participants. “Once you’re in it, that’s what it’s all about â€” sharing best practices with other companies as well as with the agency,” he says.
But don’t go into it lightly, he warns. “You’re making a formal commitment to a regulatory agency,” he says. “Before you do that, you’re going to want to make sure you have some things in place or it’s going to be a long road.
“What I did like was the level of active support we got from those agencies,” he adds. “It’s definitely a different relationship than you normally have on enforcement activity. You’re really engaging in dialog and developing a relationship with an agency. It feels different and you have to get comfortable with that.”
No matter what shape your environmental plans take, a word from the wise is to take the time to evaluate your options and not simply use the efforts for marketing. Plans that look good on paper but don’t work in the real world or don’t fit within the available infrastructure will only backfire.
“Everybody wants to make green claims and sustainability claims, but the whole concept of sustainability is being thoughtful, so people need to slow down and think of the big picture,” the Sustainable Packaging Coalition’s Leflar says. “Really take your time and consider ‘What does this mean for me now?’ ‘What does this mean for my company and my children 20 years down the line, or 50 years down the line?’ And really take a longer term view of what we’re doing to the planet with all of this.”
Design considerationsNestlé Waters North America is rolling out new packaging this fall with environmental issues in mind. Called the Eco-shape, the bottle weighs 12.5 grams for the half-liter size and uses about 30 percent less plastic than most bottles on the market. Lighter bottles use fewer raw materials, and require less energy to make and transport. The bottles also incorporate smaller labels, which should save 20 million pounds of paper a year.
The Eco-shape package took 10 years to design, says Jane Lazgin, director of communications at Nestlé Waters. “The detail that went into the design is fascinating â€” exactly how they strengthened the shoulder and positioned the waist and put the ribs in the bottle. It was like building the Brooklyn Bridge,” she says.
The new package is rolling out first with Nestlé’s Ozarka brand, as its facility in Texas was best able to integrate the new equipment first. The company’s biggest challenge will be to convince consumers that the lighter, “crunchy” feel of the bottle is a positive attribute, and is explaining the move through advertising.
“We’re putting information on the case pack and doing print ads because the consumers think the bottle feels flimsy,” Lazgin says.
The Coca-Cola Co. also plans to redesign its Dasani packaging by reshaping the bottle and its closure. “We’ll eliminate 280 million pounds of PET plastic through design efforts,” says Scott Vitters, director of sustainable packaging at Coca-Cola.
Vitters also points to Coca-Cola’s glass techno
logy as an area where the company has used design to reduce materials.
“We’ve got a program called our Ultra Glass Technology where we’ve used finite element analysis â€” basically computer technology â€” to look for weak spots in the glass and shave it off,” he says. “In doing so, we reduced the weight of our glass contour bottles by 20 percent. At the same time, we’ve improved the impact resistance by 50 percent, and lowered cost.”
Vitters says the result is equal to saving 89,000 metric tons of glass and the energy-use equivalent of taking about 10,000 cars off the road.
But, he warns, eco-friendly design is not all about lightweighting. “You can have a very lightweight package, but do you have a quality product as a result?” he asks. “What does your secondary packaging look like when you transport it? Are you seeing packages that get crushed and so you’re having to double-pack your secondary packaging?
“Usually 10 times the energy and waste is in the product itself,” he adds. “So if we’re wasting the product, have you really done something that’s better? You need to take an integrated look at packaging as part of an integrated system that considers the product, the package, the transportation and the consumer.”
5 things you can do to create eco-friendly packagingMartha Leflar, project manager at the Sustainable Packaging Coalition, Charlottesville, Va., says consumer product companies should incorporate sustainability from the very beginning of package design. They also can help build a better recycling infrastructure by encouraging the use of better sorting technology and making it known that a market exists for post-consumer material.
1. Understand where your materials come from. According Leflar, the process begins with “relationships with suppliers and really working the supply chain upstream.”
2. Spec for recycled content. “Create markets for [recycled materials] so infrastructure increases and we can close the loop,” Leflar says.
3. Create designs that fit within current recycling systems. Know the playing field before you design and make sure it is going to add to an infrastructure, not compromise it.
4. Optimize the use of materials and energy. “Using less is always better, as long as it still gets the job done,” Leflar says.
5. Support the development of infrastructure. Communication with local municipalities is a good place to start. If a market exsists for materials, collection is more likely. “There are beverage companies who have made commitments to having a certain percent of recycled content in their bottles and they are scrounging to find it,” Leflar says. “How do we get the word out to municipalities? There is just no communication mechanism between those two groups of people to get it going.”
Sustainable developmentsIt’s not easy being green, a beloved “Sesame Street” frog once told us. But a number of beverage companies are taking on the challenge:
• Kraft Foods has reduced the weight of the PET bottles for its ready-to-drink bottles, including Crystal Light, by 18 percent. The company estimates the move will save 8.7 million pounds of plastic.
• Procter & Gamble lightweighted its canisters of Folgers coffee to the tune of about 1 million pounds of plastic a year.
• Fetzer Vineyards, Hopland, Calif., received the Environmental Protection Agency’s Best of the Best Stratospheric Ozone Protection Award for its phase- out of methyl bromide, organic farming, integrated pest management, use of cover crops, as well as solar and other renewable energy sources, and for broadly sharing information about sustainability. Fetzer also received the California Integrated Waste Management Board’s Waste Reduction Award Program (WRAP) award for becoming a zero-waste facility.
• Green Mountain Coffee Roasters incorporated new Ecotainer cups with a corn-derived lining from International Paper, earning it the Sustainability Award from the Specialty Coffee Association.
• Jim’s Organic Coffee, Wareham, Mass., became the first coffee roaster on the East Coast to use 100 percent renewable energy, and uses paper cups that contain 10 percent post-consumer material.