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Speaking Sustainably

Managing packaging perceptions vs. realities for a truly circular future

A coffee company's wake-up call from the circular economy.

In November, Nestlé-owned Nespresso announced that its coffee pods would be sourced from 100 percent sustainable aluminum by 2020. The company has long had a pouch recycling program in place (you get a pouch, fill it up with your used pods and mail the pouch back or drop it off at a retailer), and in late 2018, Nestlé announced the creation of its own Institute of Packaging Sciences, in an effort to "achieve the Company’s commitment to make 100 percent of its packaging recyclable or reusable by 2025."

The company’s CEO, Mark Schneider, was doing media rounds recently talking about these efforts and told Mad Money’s Jim Cramer, "We did not want to be a passenger to what the packaging industry is dishing up. We wanted to do our own thing."

With that as the backdrop, here are four takeaways about managing perception vs. reality:

1. Many coffee pods are made of plastic, and those manufacturers have been scrambling to label them as recyclable.

Last month, a federal judge ruled that a lawsuit against Keurig about the actual recyclability of its K-cups could proceed. I believe (although I had a hard time confirming this) that Nespresso pods have long been made from aluminum, so the move to 100 percent certified sustainable aluminum is essentially Nestle doubling down on the material — which, I would assume, is prompted by the public outcry over plastics in the ocean.

Over half of Americans would feel better about a brand that made an effort to reduce or eliminate its use of plastic.
If you haven’t seen our latest consumer insights report on this, you can get it for free. Our survey revealed that over half of Americans would feel better about a brand that made an effort to reduce or eliminate its use of plastic. Given that, Nestlé is smart to double down on aluminum — it’s what I would recommend, based on the consumer data.

2. Of course, the problem is that it’s complicated.

Not so long ago, Americans preferred plastic over paper, hating the idea of cutting down trees. How many emails have you received that say, "Think before you print" at the bottom? And how many times have you seen paper towel or napkin dispensers that have said, "Remember where these come from."

Fast forward to 2019. In the same poll referenced above, we asked Americans, "If a brand that typically packages its product in plastic was rethinking its packaging materials, what ONE material do you think it should use instead?" The No. 1 answer by far was paper, followed by cardboard. Americans — humans, really — are reactive, emotional creatures. We hate the idea of cutting down trees, but we hate seeing beautiful sea creatures impaled or killed by plastic even more.

3. The challenge for brands is in how to best play this.

You can respond to consumer perceptions (it’s how brands are built, after all), but what if your material choice looks more palatable to the average consumer but actually isn’t any better from a total life cycle analysis standpoint? What will you say when that’s discovered by your consumer?

My guess is that some sharp NGO or nonprofit will begin to take the complicated issue of "how to decide which product is sustainable and which one is not" and make it clearer to consumers. The idea of "This product is okay because it’s recyclable" might not cut it soon, with the Asia-Pacific region’s refusal to deal with our trash and mechanically recycle it.

The idea of 'This product is okay because it’s recyclable' might not cut it soon, with the Asia-Pacific region’s refusal to deal with our trash and mechanically recycle it.
And while 85 percent of Americans are somewhat-to-very confident that what they throw in the recycling bin is actually recycled, the mainstream media is beginning to disabuse Americans of that notion in a way that’s accessible; watch Trevor Noah’s take on it here.

4. I find Schneider’s word choice very interesting.

The idea that Nestle doesn’t want to just accept what the packaging industry is "dishing out" is a compelling stand on the one hand. On the other hand, I don’t see how we create a circular future where materials are responsibly sourced, collected, broken down and reused without everybody working together.

I think it makes sense for brands to work on new technologies and ideas, but I also think materials companies far up the supply chain are working mightily on new ideas as well and the two camps should be talking to each other.

My takeaway and recommendation is this: Brands, packaging manufacturers and materials suppliers should be working together to both imagine and create circular systems going forward — and they should be working together to communicate the story to consumers. In the absence of a cohesive story that all players can get behind, social media and late-night comedy will fill the void and erroneous misperceptions will abound.

No matter what material you represent or prefer, nobody wants that.

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