The environmental pressures in the FMCG industry

November 21, 2018| by Simon Cutler

It is now widely agreed that humanity’s effect on the planet has created some severe problems for our environment and that if action isn’t taken we won’t be able to reverse them. Environmental issues and the impact of plastics in the natural world are at the forefront of people’s minds at the moment; TV documentaries show us seas clogged with waste and the news keeps us informed about extreme weather due to climate change. Suffice to say awareness is much higher now than even 1 year ago. However, awareness can only get you so far. The next step is to turn awareness into action. For the FMCG industry, maybe more so than others this is the time to act; with the public spotlight fixed on issues like grocery packaging and food waste.

Retailers and suppliers have stepped-up to help reduce the amount of plastic used day-to-day, although more can still be done. They are aware that this is in the public consciousness and there is increasing consumer demand to take visible action.  A recent global NielsenIQ report [1] found that 81% of people feel strongly that companies should help to improve the environment. Unsurprisingly the most enthusiastic respondents were those from emerging markets who have to deal with environmental hazards every day; the World Health Organisation estimates that around 12.6 million people die from environmental health risks annually. [2]

It would be easy to lay the blame on large retailers and manufacturers and to demand that they make changes, but the reason they’re in this position in the first place is because of us, the consumer. A report from the Journal of Industrial Ecology [3], which studied the environmental impact of consumers, found that the per capita carbon footprint of China, considered to be one of the largest pollutants, is in fact almost half the world average of 3.4 tonnes of CO2. By contrast the US tops the list with 18.6 tonnes. Yes, China does produce a lot of the plastic packaging that is used all over the world, but they export the vast majority of it to the large consumers across the globe. It is demand for cheap, long-life and easily accessed food that has caused this problem in the first place; the discovery of creating cheaper packaging using plastic helped reduce costs.

NielsenIQ found that 73% of consumers say they would definitely change their consumption habits to reduce their environmental impact, but a more sustainable product on the shelf could quite easily come at a higher cost for the consumer. Before plastic was readily available we got on fine, using glassware and paper more often, things would be repaired rather than replaced when they broke, partly because they cost more. Since then innovations in plastics have driven down cost and society has developed a throw-away culture. There are still some remnants from the past which are a greener alternative; milkmen still deliver to homes around the UK offering grocery deliveries as well as the traditional milk in glass bottles.

Would people be willing to pay a premium for eco-friendly products?

The same NielsenIQ survey found that 49% of people would be willing to pay higher than average prices for high quality or safety standards and in fact 46% would be willing to forgo a brand in order to buy environmentally.

So what have retailers done so far to bring our pollution problem into check?

Just recently Iceland have gone viral for releasing their banned Christmas advert that highlights the effects of deforestation due to higher demand for palm oil. Companies have become more aware and willing to jump in on subjects of political and social importance. Other retailers have made commitments to be plastic free in the coming years as well as incentives to reduce food waste as well. One retailer in London, Thornton’s Budgens, has released 1,500 SKUs that are plastic free, instead using materials like wax paper, netting made from beech, or even a plastic-like wrap made out of cornstarch. Wholesaler Bidfood has committed to reducing the amount of plastic in its packaging and has released a plastic free range including cans of water.

Thanks to the government levy on single-use plastic bags, which was introduced in England on the 5th October 2015, there has been an 86% drop in their use, with Tesco going a step further to stop providing them all together. Plastic bottle banks that give store credit for empty bottles have been trialled in some supermarkets. In other countries shoppers can buy drinks in glass bottles, then return the empty bottles in exchange for money so that they can be recycled.

The action taken so far by companies and consumers is commendable, however it may not be enough to stop irreversible damage to our planet. Ideally the path forward would be to cut out all plastic completely rather than looking to reduce it. This won’t necessarily be practical with manufacturing costs being higher for the alternatives, though it might have to be a cost we all need to swallow in order to ensure a cleaner future. The answer may well need to come from all areas with a united approach, as this is an issue greater than any one sector can handle on its own.

For more information about this topic read our report into the use of plastics in the dairy industry here.




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