Will Collins, Global Editor, Recycled Polymers, talks to Liz Nieboer, Head of Sustainability, Suntory Food and Beverage GB&I, about its aim to have 100% sustainable packaging by 2030 and the challenges involved in transitioning towards sustainable and recycled packaging:
- Suntory Food & Beverage GB&I’s progress towards its recycled content and sustainability targets for plastic packaging, and the challenges that it faces in the current environment
- How consumers react to more sustainable packaging, and how best to inform their customers about the progress they’re making, including with respect to chemical recycling and mass balance accounting
- How a deposit return scheme in the UK can help to boost supply of rPET to brand owners that are looking to increase their usage of recyclates in packaging
Will: Hello, everyone, and welcome to this Chemical Conversations podcast for Argus Recycled Polymers, brought to you by Argus Media. I'm Will Collins, the global editor of the reports, and I'm joined by Liz Nieboer, Head of Sustainability for Suntory Beverage & Food Great Britain and Ireland, which controls soft drinks brands including Ribena, Lucozade, and Orangina. Like many brand owners operating in the UK and Europe, Suntory Beverage and Food has committed to ambitious sustainability targets around the inclusion of recycled plastics, mainly rPET in its packaging over the coming years. So, Liz, welcome. Thanks for joining us today.
Liz: Oh, pleasure to be here. Thanks for having me, Will.
Will: So, what are Suntory's sustainability commitments, and what changes have you made to packaging as part of the drive towards sustainability?
Liz: We have a vision which we call Growing for Good, and that is that the bigger we are as a business, the more positive impact we can have on society, our people, and the planet. And we have made a raft of what we think are ambitious sustainability commitments that we're working very hard towards committing and achieving. We've committed to reducing our greenhouse gas emissions by 50% from direct operations and by 30% across all our value chain by 2030. In terms of packaging specifically, we've got an overall goal to have 100% sustainable packaging by 2030. And it's a goal which we've already invested nearly £8m into in the last few years. It's included quite a few changes such as moving to 100% recyclable paper alternatives on stores for Ribena cartons, and as you've already referenced, a real focus on using recyclable plastic in our bottles.
Will: And when you sort of look at your sales, do you see that customers are aware of recycled packaging? And how much does it impact their purchasing decisions?
Liz: It's a really good question. We've recently done a very large survey of over 5,000 consumers as part of our business preparation for the deposit return scheme, which is launching in Scotland next August. And we had some really exciting results there that showed that two thirds of consumers that we surveyed really do want to make more positive recyclable sustainable commitments. And that within seven weeks, for example, of being introduced to a system such as a deposit returns scheme, which is really all about encouraging people to value the products, the bottles that they use for their drinks and see their value as a recyclable commodity, that the vast majority of people really change their habits within seven weeks of being confronted with this kind of system change.
Will: And do you think that there's enough understanding with the consumers we have recycled packaging, we have packaging that is based upon sustainable feed stocks being advertised in some cases. Do you think that it's easy to make customers aware of the various differences when they are trying to pick up drinks, I suppose generally quite quickly off the shelf?
Liz: I think it's a really good question and it's always a challenge when you're actually coming to that point of purchase as to exactly how much information that consumer wants or can take in at that moment. I think there is a real shift in consumer understanding about recycled content. I think people are becoming more and more aware of the importance of closing the loop, as it were, of seeing products that can be used again and again. And I think there's, you know, we would also argue that the need to close that loop, particularly when it comes to plastic bottles in our packaging, because if we do recycle our bottles, we can use them again and again. Whereas I think, historically, perhaps there's been some use of recycled products or elements within other industries where that they get the percentage of recycled material. But the reality is if it's in clothing for example, it's not so easy to recycle that again and again.
Our belief is there's growing consumer awareness about the need to recycle elements and a desire to be part of that story, be part of that solution. There are complexities about the difference between mechanical recycling and chemical recycling. And I don't think that's top of mind in consumers minds and I think it's a complex topic. So, there's still a route to go, there's still a journey to take place. But we are seeing that more and more consumers positively want to be part of the solution, are encouraged when they know that we have recycled content in our bottles.
Will: And just on the mechanical recycling, chemical recycling element, because that's quite an interesting discussion point, chemical recycling is very much a nascent industry. We don't see a huge amount of capacity currently available in Europe, but clearly the plan is for that to grow quite significantly in the coming years. And there's a lot of discussion around mass balance allocation of recycled content, similar to how the power grid works in some cases in terms of the quantity of output matches the quantity of input without necessarily being a one-to-one straight line. Is there a risk that that could make it more difficult for consumers to understand? Or do you think, going back to your original point, that it's simply that consumers want to be part of the effort and therefore they will take what's written on the label and go forward and see that as a sustainable solution regardless of whether it's mechanical or chemical recycling?
Liz: I think you are always gonna have a certain fragment, a section of the population that wants to have more information, that wants to know the kind of intricacies of the means by which your packaging is being recycled. And for us, we think chemical recycling is an important part of the future journey, and it's something we're already using. We use a resin which contains 30% recycled material content processed by chemical recycling in certain bottles. And we would like to see that grow in the future because we think it's a very good and useful element of our strategy to get to 100% rPET. And again, I think one thing I haven't perhaps referenced clearly enough is that we're really excited that this year we could announce that all of our on-the-go 500 milliliter bottles, which is really the core of our business, will be in 100% rPET, obviously excluding the cap and the label by the end of this year.
And that's not without its challenges because I'm sure as you are aware, there is an industry-wide lack of food grade quality rPET across Europe. And that does have an impact on everyone's ambitions to access this really good quality rPET for use in their packaging. Again, we think chemical recycling could be part of the answer. I think there is, to answer your question about what information do consumers want, and there's lots of research that I know has taken place historically on environmental labeling and what the right mechanic is to give that information to consumers. We have found that including the reference to the fact of our recycled content on bottles, the majority of those bottles now having 100% rPET is a real positive call to action. And we think that's the right level within that format on the label of the bottle. You know, we have more information on how we approach that, which can always be found on our website. And I think our historic approach has been that's been the right marriage of information, keeping it quite light but factually impactful on bottles, but ensuring that for those consumers who want more information, there are clear elements within our wider communications framework where they can find that information.
Will: And you touched upon it just then, there is no secret that the supply of rPET food grade pellets in Europe is very tight. We have seen in some cases, brands having to step back from commitments that they've made for this year with a lack of available supply cited as one of the reasons. Do you see a risk that the overall commitments for the industry for 2025 won't be met? And there, I suppose I'm referring to brands' individual commitments, you know, which you have just quoted for Suntory Beverage and Food, but also in terms of the Europe wide commitment to include 25% rPET in PET bottles by 2025.
Liz: It is not without its challenges, I think it's fair to say the geopolitical and the economic environment in which we're operating makes achieving and maintaining these ambitions all the more challenging. But there's a real commitment at a business level to try and navigate our way to what is undoubtedly choppy waters supply chain wise. And it remains our aim to have 100% sustainable packaging by 2030, and I feel that we're on course to achieve that. There may be some kind of curves and kinks in the river, but the business is really committed to this idea of growing for good, and sustainability being a key pillar to achieve that. I think it's fair to say there are things that we feel that could really help on that journey.
And the introduction of a interoperable deposit return scheme, which will be a great way of closing that loop and really making sure that we do get the packaging that, you know, we as producers put the market back into the recycling system and back into our factory so that we can use again and again will be a key component to help alleviate the challenges we currently face in terms of access to really good quality recyclate, which is, as we've alluded to, becoming that bit more challenging. It's a very competitive market and there's great volatility in the pricing of that, which obviously is a factor that all businesses have to kind of consider in their future plans.
Will: And to that, I recently saw that the European Soft Drink Manufacturer Association (UNESDA) suggested a structural change to the recycling market for the PET side that would allow companies that sell beverages in PET bottles priority access to a certain volume of the rPET raw material, which is proportionate to the quantity that they put onto the market. The idea behind this, of course, is that it would allow smaller brands that maybe can't afford the current high prices of rPET to have access to enough recycled material to meet the 25% recycled content mandate that the EU has laid out by 2025. It would be a big structural change for the industry. Would you support such a system, and maybe what do you see could be the downsides there as well?
Liz: Well, we were very encouraged, the first deposit returns scheme launching in Scotland does allow for first right of refusal for producers to access the subsequent recycler. And we do feel there's a natural logic that the product we're putting on the market, we would like to obviously at competitive rates get back to use it again and again, there's a logic to that. And I think it's also a realistic way of genuinely closing the loop and being able to know that what we're putting on the market in terms of our product packaging is genuinely used again and again and closing that loop.
Will: And from outside of the supply demand side, from a technical perspective I suppose, or business perspective, whatever it may be, what are the biggest barriers that you need to overcome in order to make what sounds like extremely strong progress towards increasing recycled content in the bottles that you're producing?
Liz: I think we've alluded to the fact that the cost of recycled plastic has really grown substantially in the last couple of years because of external factors. And that's always a difficult business challenge when you can see that the cost of virgin plastic is noticeably much lower than recycled content. But, the company's fully committed to the sustainability journey we're on and that the ambitions and the commitments we've made in terms of achieving 100% recycled packaging. And so, that's a challenge that as a business we've addressed and we work through. And it comes with some great other benefits obviously, which by switching to rPET, we've seen a really substantial reduction in our CO2 emissions, which obviously has a positive impact on our scope three targets. We've reduced our CO2 emissions by over 36,000 tons. So, I think you've gotta see everything on the whole. It's the positive impacts, the making this commitment to use of rPET and how that also achieves us in other areas of our sustainability targets going forward. And I think that's really important that we as a business have always kept sight of and are really committed to that journey going forward.
Will: And finally, you've mentioned, of course, the strong commitment in the industry to continue with this despite the current economic environment, which since we're both speaking in the UK on the 29th of September, we can say is substantially worsened over the last four days probably. How about the energy environment that we have in the UK and Europe at the moment in terms of costs? Does that have any impact on the availability of material or on any of the other areas that are needed for you to maintain sort of the commitment to sustainability in driving more and more recycled content?
Liz: Obviously everything comes to play, looking at the energy cost, the cost of materials. And I think it's a particularly challenging time for anybody working in the supply chain right now of industry trying to understand how all these factors come together. I think as a business, we welcome the recent government's commitment to helping with energy cap for businesses for the next six months. And I think it's something that we're very much working through. Again, I would say we are really committed to achieving this aim of having 100% sustainable packaging by 2030. We have to obviously navigate the challenges that we're faced with in the broader industry, I think in the immediate years to come. And I say that there may be some challenges we have to navigate going forward, but that commitment is definitely something that we both in the UK business but European wise are fully committed to deliver on.
Will: Thanks very much and this has given us a lot to think about. So, thank you very much to Liz for joining.
Liz: Thanks, Will. Absolute pleasure.
Will: And thanks very much as well for the listeners for being here. We hope that you did find it useful and insightful. And if you want to find out more about Argus Recycled Polymers or any of Argus other chemical products, please visit www.argusmedia.com/chemicals.