FMCG firms aim for 100% sustainable packaging by 2025, Kearney analysis shows

Analysis from global consultancy partnership Kearney has found that 2025 is set to be a pivotal year for sustainability, as the top 10 FMCG firms set themselves a target for 100% sustainable packaging by this date.

According to Kearney analysis, only 8% of the world’s plastic is currently being recycled, with 8 million tonnes of plastic waste finding its way into the ocean each year. Around 30% of the total volume of plastic use globally comes from packaging, a figure that totalled 110 million tonnes in 2019. By 2050, the amount of plastic production is expected to increase substantially, with predictions that the current figure will double to 700 million tonnes. If no countermeasures are taken, this will result in 644 million tonnes of plastic going into landfill annually.

With packaging accounting for such a large proportion of global plastics, and consumer awareness mounting, consumers are demanding businesses to change. The UK is already putting measures in place. In its Spring Budget, the government announced a Plastic Packaging Tax from April 2022, charging manufacturers and importers £200 per tonne on packaging made of less than 30% of recycled plastic, to incentivise the use of recycled materials.

According to Kearney’s findings, two thirds (66%) of consumers in the EU and US are willing to pay a premium for sustainable products, and half (49%) say that a company’s environmental record is an important factor in making purchasing decisions. The same number (49%) say they would be willing to prioritise sustainable products over convenience, and would be prepared to travel further in order to avoid products that are less environmentally friendly.

Fast-moving Consumer Goods (FMCG) companies are particularly conscious of these changing demands, especially when it comes to sustainability and packaging. Kearney’s analysis finds that packaging is amongst the top five concerns about sustainability for all major FMGC groups, and over half (59%) of food and beverage companies are addressing packaging issues in the sustainability of their products.

One alternative to plastic is paper pulp, but using this substance to produce alternative packaging raises a number of issues. First, paper pulp is a traded commodity, so its price depends on the supply and demand at any given time. Second, the production capacity for paper is not yet comparable to that of plastics. This means that a widespread transition to paper-based packaging would be required in order to reduce prices enough to make the option viable to big business.

Innovative, greener solutions, including using recycled pulp and paper to replace plastic and aluminium in non-direct food contact sections, could reduce the cost of pulp, however. As such, firms will need to think about developing and utilising sustainable packaging in order to decrease levels of plastic production and keep consumers on side.

Bahige El-Rayes, partner at Kearney, comments: “Consumer demand for more sustainable products is clearly growing, with shoppers becoming ever more aware of the environmental implications of their choice of product. In particular, consumers are educating themselves on the damage caused by single use plastics, often opting for loose vegetables and canvas tote shopping bags over the plastic alternative.

For true disruption of the plastic production, early investment is needed to develop sustainable alternatives that are economically viable for manufacturers. However, before firms can look towards these innovative solutions, they must ensure that the plastics currently being produced are carefully disposed of and recycled.”