Nestlé Tries to Tackle Big Food’s Plastic Problem – Wall Street Journal

Nestlé SA NSRGY 1.24% pledged to cut its use of plastic made from fossil fuels by a third in five years and said it would invest up to 2 billion Swiss francs ($2.08 billion) to find more recycled material, a particularly big challenge for the food industry.

Sellers of everything from soap to soft drinks are under pressure from consumers and regulators to use less fossil-fuel-based plastic—the production of which contributes to climate change—as well as prevent plastic trash ending up in the ocean.

In response, big consumer-goods companies including Unilever UL 0.26% PLC and Procter & Gamble Co. PG 0.09% have rushed to promise reductions in plastic, saying they will switch to recycled material, use refillable containers or scrap packaging entirely.

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But changing to recycled plastic is especially challenging for companies because they need high-quality material that is safe for direct contact with food. Recycling the packaging typically used for coffee, instant noodles or candy bars is difficult and expensive because it is often made from multiple types of material, like plastic melded with aluminum or paper.

Sellers of fresh food also rely on plastic film—used to wrap cucumber and broccoli—and thin plastic bags for loose items, that often can’t be recycled.

Even when plastic is technically recyclable, it often isn’t collected and recycled. That is partly because, until recently, there has been little demand for recycled plastic, so even highly recyclable plastic—like drinks bottles—leak into the environment.

Thin plastic bags are frequently used for loose items but often can’t be recycled. Photo: Cole Burston/Bloomberg News

To spur collection, Nestlé, whose products include Nescafé drinks and Purina pet food, said Thursday it would spend more than 1.5 billion francs on recycled plastic that is approved for contact with food. It also earmarked 250 million francs to invest in startups researching new materials, refill systems and recycling technologies. It said it would fund the efforts by making cost savings elsewhere.

Nestlé’s target of a one-third reduction in the 1.67 million metric tons of fossil-fuel-based plastic it used in 2018 is a challenge. Just 2% of its plastic packaging by weight is currently made from recycled material.

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The world’s largest packaged-food company is transitioning away from plastic to paper on some of its products, like Nesquik powder and Munch chocolate bars, but so far such efforts have been niche or had mixed success.

To date, there is almost no market for the hard-to-recycle material often used in food packaging. However, new legislation in some countries, such as India, is forcing consumer goods companies to pay to collect plastic trash. It is being used to build roads or burned for energy but companies are researching ways to use it to make new packaging.

Recycling efforts are being further challenged by China’s ban on scrap imports. For decades, the country took many of the world’s recyclables and turned them into new products. Its absence from the market has hit demand and raised costs for municipalities, propelling some to scrap their recycling programs entirely.

Nestlé’s latest announcement follows similar pledges from rivals.

Unilever, which makes Dove personal-care products, Ben & Jerry’s ice cream, Hellmann’s mayo and other foods, last year said it would halve its use of plastics made from fossil fuels by 2025, saying much of that drop would come from an absolute reduction in plastic by switching to refillables, smaller containers or not using any packaging at all.

Procter & Gamble last year pledged to halve its fossil-based plastic by 2030, while Mars Inc. and PepsiCo have also announced similar targets.

Write to Saabira Chaudhuri at saabira.chaudhuri@wsj.com

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