Opportunities to Create Value Across the Value Chain · Opportunities to Create Value Across the...
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Tamal Ghosh PhD PepsiCo Advanced Research – Beverage Packaging Hawthorne, NY, USA [email protected] © PepsiCo 2013 Opportunities to Create Value Across the “Sustainable Packaging” Value Chain
Transcript of Opportunities to Create Value Across the Value Chain · Opportunities to Create Value Across the...
Tamal Ghosh PhD
PepsiCo Advanced Research – Beverage PackagingHawthorne, NY, [email protected]
© PepsiCo 2013
Opportunities to Create Value Across the “Sustainable Packaging” Value Chain
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Who We Are
Global Beverages
Global Snacks
Global Nutrition
Brands
22billion-dollar
brands
Performance
More than $66 billion
revenue
Scale
>200 countries
& territories
People
~300,000employees
PepsiCo is a global food and beverage powerhouse. Our broad range of more than 3,000 delicious products offers consumers
convenient, nutritious and affordable options in nearly every country around the world.
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Key Message
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Sustainable PackagingSeveral opportunities to deliver value to the consumer and across the value chain
Effective TechniquesLightweighting and use of recycled materials, sustained by increased recycling rate
Successesserve as an inspiration
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The Value of Packaging
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“Right packaging for a product influences consumers buying choice”
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Value or benefits delivered by packaging cannot be compromised● Fresher product● Better taste● Convenience and time savings● Sustainability● Affordable luxury● Safety● Cleanliness● Availability
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“Right packaging for a product influences consumers buying choice”……continued
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PTIS Packaging Value Formula
Value Buyer =Product Benefit
Price
Value Consumer =Product Benefit + Package Benefit + Experience
Price
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Sustainable Packaging
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Sustainable Packaging: Working Definition
● Is beneficial, safe & healthy for individuals and communities throughout its life cycle
● Meets market criteria for both performance and cost● Is sourced, manufactured, transported, and recycled using renewable energy
● Optimizes the use of renewable or recycled source materials● Is manufactured using clean production technologies and best practices● Is made from materials healthy throughout the life cycle● Is physically designed to optimize materials and energy● Is effectively recovered and utilized in biological and/or industrial closed loop cycles
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http://www.sustainablepackaging.org/
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You can’t tame what you can’t measure!
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Attempts to "Quantify" Sustainable Packaging
Life Cycle Assessment (LCA)● Accepted technique to assess environmental impacts associated with all
stages of a product's life from cradle to grave
● International standards ISO e.g., 14040, ISO 14044 and PAS 2050
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Attempts to "Quantify" Sustainable Packaging……continued
Environmental impact categories most relevant to beverage packaging
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Total Energy Consumption[MJ]
Solid Waste [kg] GHG Emissions (Carbon Footprint) [kg CO2e]
Water Consumption [m3]
● Choice of a relevant basis is critical, e.g., for beverage packaging:
o Cradle‐to‐Material (or Gate): kilograms material
o Cradle‐to‐Grave: 1000 liters beverage delivered
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Opportunities for Creating Value
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Packaging Value Chain (simplified)Food and Beverage Packaging
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Materials ConvertersBrandOwners /Retailers
Consumers End of Life
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Value Chain: Materials●Packaging materials represent significant component of packaging industry revenues
●Polymers used in packagingo high density polyethylene (HDPE)
o polyethylene terephthalate (PET)
o polypropylene (PP)mainly derived from fossil fuel sources, viz., petroleum and natural gas
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Value Chain: Materials……continued
Recent developments in synthesis of polymers from biomass● Poly Lactic Acid (PLA)● Poly Ethylene (PE) and Poly Propylene (PP)● Purified Terephthalic Acid (PTA) + Mono Ethylene Glycol (MEG) → Poly Ethylene Terephthalate (PET)
● Furan 2,5 dicarboxylic acid (FDCA) + MEG → Poly Ethylene Furanate (PEF)
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Value Chain: Materials……continued●Value Proposition
oPLA: primarily from corn; lower carbon footprint; many end‐of‐life options including compostability
oPoly Butylene Succinate (PBS): less expensive than petroleum‐based counterpart
oPEF: superior CO2, O2, H2O vapor barrier versusPET (higher shelf life)
●Post Consumer Recycled (PCR) polymer presents potential for additional cost savings and lower environmental impact
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•World’s first 100% rPET CSD Bottle (July 2011)
•Strong consumer pull and acceptance
7UP EcoGreen™ Bottle: 100% rPET (Canada)
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0
50
100
100% vPET 100% rPET
Greenhouse Gas Emission [kg CO2e / 1000 lit beverage]
‐27%
0
1000
2000
100% vPET 100% rPET
Total Energy Demand [MJ / 1000 lit beverage]
‐47%
Life Cycle Results: 7UP 2 liter EcoGreen™ Bottle45.1 g bottle, no caps or labels (cut‐off method)
0
5
10
15
100% vPET 100% rPET
Solid Waste [kg / 1000 lit beverage]
‐4%
0
300
600
100% vPET 100% rPET
Water Consumption [liters / 1000 lit beverage]
‐7%
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Value Chain: ConvertingOpportunities to deliver value at the converting process step● Energy reduction ● For rigid packaging, through optimum mold design
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Value Chain: Converting……continued
Convert from a rigid package to flexible package where possible● light‐weight primary packages for beverages
© PepsiCo 2013http://www.ecolean.com/
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Value Chain: Converting……continued
Light weighting or material reduction presents a powerful case for sustainable packaging and value creation
● less material → lower cost, lower waste● optimum package
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0
10
20
30
40
50
60
70
80
90
Virgin RawMaterial
RecycledContentRaw
Material
ContainerConverting
Converterto FillerTransport
Filler toRetail
Transport
Cap LifeCycle
Label LifeCycle
SecondaryPackagingLife Cycle
End‐of‐lifekg CO
2e / 1,000
liters beverage de
livered
16.8 g
10.9 g
Bottle Weight [g]
GHG emissions[kg CO2e / 1000 liters]
Aquafina 16.8 195
Ecofina 10.9 142
‐35% ‐27%
Life Cycle GHG emissions by Stage: Aquafina® Bottles16.9 oz. PET Bottle Lightweighting (cut‐off method)
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Value Chain: Brand Owners and Retailers
●Brand owners / Consumer Packaged Goods (CPG) companies most influential stakeholders in the value chain
●Because of primary interface with consumers, success of package is intimately connected to success of product
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● Sustainable packaging, appropriately certified (e.g., Der GrünePunkt, BPI, FSC), is a key brand differentiator
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Value Chain: Brand Owners and Retailers ……continued
● “Greenwashing” leads to suspicion and apathy!
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Value Chain: Brand Owners and Retailers ……continued
Dow Jones Sustainability Index (DJSI) and NGOs such as Carbon Disclosure Project (CDP) contribute to virtual policing of brand owners’ claims
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Value Chain: Consumers
● Most “visible” stakeholder in the value chain● Significant and growing segment of customers: LOHAS (Lifestyle of
Healthy and Sustainability) market, have been influencing packaging choices at the brand owner / retailer
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Value Chain: Consumers……continued
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“Consumer dollars will make the business case for sustainability!”Jim Hanna, Director of Environmental Impact for Starbucks Coffee (2011)
from: http://www.greenerpackage.com/recycling/starbucks_approaches_recycling_goal_systems‐based_approach
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Value Chain: Consumers……continued
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from: http://www.ipsos‐na.com/news‐polls/pressrelease.aspx?id=5996
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Value Chain: Consumers……continued
Unintended consequences!
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Value Chain: End‐of‐Life
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Recycle / Reuse
most preferred
Litter
least preferred
Landfill BioDegradation
Waste‐to‐
Energy
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from: http://www.asyousow.org/sustainability/eprreport.shtml
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Cradle‐to‐MaterialConventional fossil‐based PTA+MEG PET
100% rPET
Greenhouse Gas Emission [kg CO2e / 1000 kg PET]
100.0% 52.8%
Non‐Renewable Energy Demand [GJ / 1000 kg PET] 100.0% 28.6%
Solid Waste [kg / 1000 kg PET] 100.0% 83.7%
Water Consumption [m3 / 1000 kg PET] 100.0% 80.2%
Eutrophication [kg N e / 1000 kg PET] 100.0% 88.6%
Smog Formation [kg NOx e / 1000 kg PET]
100.0% 79.1%
Acidification [H+ moles e / 1000 kg PET] 100.0% 67.7%
Ozone Depletion [kg CFC‐11 e / 1000 kg PET] 100.0% 10.3%
Environmental Impact: virgin versus recycled PETlower across the board!
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Concluding Remarks
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Conclusions● The packaging value chain is complex with stakeholders exerting
their influence to various degrees● Current emphasis for sustainable packaging presents several
opportunities to deliver value for every stakeholder in the value chaino Price / Performance ratio is difficult to compromise!o No panoptic solutions exist!o Opportunities exist beyond just “bio‐based” packaging
● Lightweighting and the use of rPET, sustained by increased recycling rate, are effective techniques for reducing environmental impacts across the boardo Availability of food‐contact grade rPET remains an issue
● Efforts across value chain have delivered several successes that serve as an inspiration
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Acknowledgements
Ed Socci, PhD
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Thank you!© PepsiCo 2013
