Sustainability Series: Tetra Pak
July 30, 2014
With more than 23,000 employees in 80 countries, Tetra Pak is a privately held company that creates smart food processing and carton packaging solutions. From prepared foods to dairy to the cosmetic industry, Tetra Pak works with a wide range of companies to help them process, package and distribute products in a sustainable way. We talked to Elisabeth Comere, Director Environment U.S./Canada, at Tetra Pak Inc., about discovering novel and sustainable ways to meet consumer needs.
How does your business define sustainability?
At Tetra Pak, everything we do is driven by our brand promise: Protect What’s Good. And that promise is deeply rooted in our approach to sustainability. We define sustainability as the protection of people: our employees, the communities in which we operate, and society as a whole. And the protection of futures; by developing the products and services that will support the future business growth of our customers, and by acting and operating in ways that best protect the future of our planet.
How are you incorporating sustainable practices into your business?
We are taking a value chain approach to sustainability, recognizing that our reach extends beyond the walls of our own operations. We work with our suppliers and customers as well as NGOs, governments and consumers to improve performance at every stage of the product lifecycle.
Getting our own house in order
At our factories, we dedicate teams to analyze each part of our operations to identify opportunities to reduce our consumption of water and energy and conduct energy audits each year to drive continuous improvement. To minimize our carbon footprint, we track greenhouse gas emissions associated with our transportation network and optimize our modes accordingly. We are also introducing video conferencing systems and smart travel procedures with the aim to reduce travel by 35% by 2014.
Influencing the supplier side
We help our suppliers identify opportunities to reduce energy consumption and waste and to increase the use of renewable energy. We require they report their carbon footprint annually and make continuous improvements. Locally we work closely with our paperboard suppliers to ensure wood fiber comes from responsibly managed forests certified to the highest standards. Since 2014, all global board suppliers are FSC Chain of Custody certified.
Helping customers to enhance their environmental performance
We provide our customers with state-of-the art equipment for filling and food processing. Our equipment is designed to deliver the best available environmental performance.
Greening the product portfolio
Our Moving To The Front campaign focuses on our preference to use mainly renewable resources and the importance of material sourcing in protecting our world’s limited natural resources. It aims to expand attention from the middle and end of the packaging life cycle to the beginning. Our cartons, on average, are made of 70 percent paperboard, a renewable resource from responsibly managed forests, where trees continue to be replenished, and we have launched bio-based plastic caps made from polyethylene derived from sugar cane.
Driving recycling rates
In the U.S., we are building coalitions among a diverse set of stakeholders to create a step change in recycling rates and continue our work with municipalities and the recycling industry to develop increasingly robust collection and processing networks for our cartons. We work with other packaging manufacturers driving recycling efforts through the Carton Council of North America. To date, over 50 percent of U.S. households can recycle cartons through their curbside recycling programs and other recycling venues. Household access increased 177 percent from 2009, when the Carton Council was formed and access stood at just 18 percent.
What are your short term and long term goals?
Our 2020 environmental targets focus on developing sustainable products, reducing our environmental footprint across the value chain and increasing recycling. On the short term, we constantly assess that we have the right strategy in place locally to meet our 2020 goals.
We believe we should grow our business, not our climate impact. Our goal is to cap climate impact by 2020 at 2010 levels, meaning we should have the same carbon footprint at the end of the decade as we did in the beginning. Based on our growth forecast we will need to achieve a 40% relative reduction to reach our goal. With regard to sourcing, our ambition is to having a significant portion of FSC-certified paperboard supply (in 2013 we reached 41%) and to develop a 100% renewable package (our packages are already mainly based on paperboard, and we launched the first caps with bio-based polymers in 2011 and bio-based coating this year) to help offset the environmental and economic strain caused by intense resource use, and we encourage everyone to join us in our Moving To The Front campaign.
We also recognize our responsibility in driving recycling rates higher given the number of packages we put on the market. Our global recycling goal for 2020 is to reach a 40% recycling rate for Tetra Pak post-consumer beverage cartons.
Where do you think you’ll have the biggest impact?
Our environmental footprint stems from the use of material and energy resources, waste generation, water impact and climate. Initially, our greatest opportunity for impact resulted from addressing sustainability opportunities associated with our own facilities; however as we have made progress in this regard, we also work in collaboration with our suppliers and customers to find additional opportunities to reduce our carbon footprint that would be mutually beneficial. Value chain collaboration is therefore key.
How do you measure your progress?
We leverage a variety of tools to measure our progress. Our water footprint, for instance, is measured using a methodology developed in collaboration with the Alliance for Beverage Cartons. We measure greenhouse gas emissions from outbound shipments through a centralized system called Logistics Control Tower. And we use the World Class Manufacturing (WCM) system to manage every aspect of production at our factories, including environmental indicators.
Our corporate climate performance and progress towards defined targets is disclosed through a global reporting system of CDP (formerly known as the Carbon Disclosure Project). In 2013, Tetra Pak improved its reported CDP score from 77 to 91, which is considered very high, compared to an industry average of 49.
We communicate our global progress on sustainability every year, and publish a report with a deeper strategic focus every two years.
How do retailers factor into your efforts?
Our focus on renewability is in part driven by consumer demand. Consumer awareness is evolving – recyclable packaging is no longer enough, we must provide packages that minimize impact at the front end too. In our 5th biannual environment survey from 2013, we saw a rising demand for renewable materials and environmental labeling among consumers worldwide. The survey showed a significant rise in the attitude towards renewable materials among food industry stakeholders, driven by the recent development of new technologies. They rank the use of bio-based materials as one of the most important environmental trends shaping the future of beverage packaging.
We also develop packages that meet retailers’ needs. Grocers are looking for smaller size packages and more compact packaging that are a better fit for smaller stores. With limited shelf space, they are trying to ensure they optimize their space to squeeze out as much sales and profit as possible. Square-shaped carton packages enable retailers to maximize shelf space, while also delivering packaging that appeals to millennial consumers.
Retailers are also looking for packaging solutions that can enhance the shopping experience while providing shelf efficiencies. In other words, a winning solution is the solution that makes it easier for consumers to shop an aisle, allow for more products on the shelf, and reduce replenishment complexities.
Our carton portfolio improves retailers’ profitability by improving shelf-efficiency and reducing in-store operating costs and environmental impact.
Why are sustainable business practices important to the food industry?
With up to 40% of food wasted each year in the U.S., sustainability in the form of better buying practices and tackling perceptions of “good” food is paramount. The French supermarket chain Intermarché’s Inglorious Fruits & Vegetables campaign is a great case in point demonstrating the massive opportunities that lie in changing consumer perceptions. Sustainability can indeed drive sales growth and consumer loyalty benefiting stakeholders from farm to fork.
Sustainable packaging innovations can help reduce the food industry’s footprint with respect to material use, energy and emissions while protecting the valuable resources that go into food production. Perhaps most importantly, a commitment to sustainability forces industry to take the long view helping them adapt to changing circumstances, minimize business disruption and volatility, and see customer needs through a new lens.
Why are sustainable business practices important to the consumer?
Sustainable business practices help to minimize disruption to supply chains and reduce price volatility, which is crucial to consumers accustomed to a steady stream of affordable products. Recognizing that product manufacturing in itself can be at odds with the goals of sustainability, the role of business to create products and services that decouple value from environmental impact cannot be overstated. When businesses view their products and practices through a sustainability lens they benefit both consumers and the bottom line.