Nestlé's Kim Jeffery: Don't fight change, lead it

Mike Verespej

Published: October 6, 2008 6:00 am ET

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Kim Jeffery not only wants, but invites, an open dialogue on what it means to be a good environmental steward and a sustainable corporation.

``What we all need to do is figure out how to use materials wisely, how to use less and how to reuse more and more,'' the chief executive officer and president of Nestle Waters North America Inc. said in an interview at the company's headquarters in Greenwich. ``Everyone is looking for a silver bullet, and there is no silver bullet on the packaging horizon.''

Jeffery asserts that Nestle — and the bottled-water industry — has a light environmental footprint, even though the perception is otherwise. ``But perception is reality. Our industry has become the bad guy. We can dig in or we can take a leadership role.

``My job is to make the bottle as lightweight as possible and to do everything I can to get those containers back,'' said Jeffery, whose company makes 20 billion water bottles a year and claims a 35 percent market share. ``I may not get credit for it, but I know what I am doing for climate change and sustainability. We are doing our part to make this company greener and to have a lighter environmental footprint.''

Nestle can point to a strong track record in reducing its materials use. In the past 10 years, it has cut the amount of PET in its bottles by 40 percent.

Its Eco-Shape half-liter bottle, which was introduced in 2007, reduces the company's yearly use of resins by 65 million pounds and reduces its greenhouse gas emissions by 8 percent annually, the company said. Eco-Shape is the lightest water bottle in the industry at 12½ grams of material. By comparison, the average bottled-water container uses 21 grams, the typical carbonated soft drink bottle uses 28 grams and energy drinks such as Gatorade use 35 grams, according to Nestle.

Nestle will reduce the weight of its Eco-Shape bottle another 15 percent, starting in the spring, at two of its seven bottling plants. When that rollout is completed by the end of 2009, it, will achieve a similar reduction in resin usage and greenhouse gases as the first Eco-Shape bottles did.

``The bottle represents 55 percent of our carbon footprint,'' Jeffery said. ``I am going to lightweight that bottle next year and continue to lightweight it because it is where we can make the biggest impact.''

Nestle also has addressed other areas of its environment footprint:

c It makes 98 percent of its PET packaging within its plants, saving the energy that otherwise would be required to ship 160,000 truckloads of empty bottles to its plants each year for filling.

c In the past five years, it has reduced corrugated cardboard use by 88,000 tons. In the past 10 years, it has saved 19.6 million pounds of paper by using smaller labels.

c It has reduced the amount of shrink wrap used on its cases for half-liter water bottles by 11 percent the past three years.

c It has five plants certified under the LEED program (Leadership in Energy and Environmental Design), and four awaiting approval.

c It uses 1.37 gallons of water to produce 1 gallon of water — the lowest amount used by any bottled-water company, according to Jeffery. By contrast, it takes 3 gallons of water to produce a gallon of soft drinks and 4 gallons of water to make 1 gallon of beer.

Still, critics of bottled water focus on the low recycling rate, and on whether there is a need to use a natural resource like petroleum to package and transport drinking water. Some municipalities have resolved to stop buying bottled water, or to ban bottled water sales at city-sponsored events.

``I'd rather talk to municipal governments about comprehensive recycling in their cities than about bottled-water bans,'' Jeffery said. ``People aren't thinking about the total environmental footprint. This is not a rational debate here. Nobody knows the truth and it is hard [to combat]. We are being raked on what is the issue du jour.''

Bottled water, he said, uses 0.004 percent of the world's fresh water and the entire beverage industry uses 0.05 percent of the oil used in the United States. Nestle's carbon footprint, he said, is roughly the equivalent of 0.7 percent of the energy used in the U.S., which is equivalent to the energy required on an annual basis for 35,000 homes.

``If bottled water went away tomorrow, there would be no less plastic used, no less water used, no improvement in recycling rates and no reduction of our collective carbon footprint,'' Jeffery said. ``And Americans would have less access to healthy beverage options.

``If you want to have a rational discussion of where to make an impact on global warming, you don't start with me. It is absurd,'' he said.

``I don't know how we get this debate to an intellectual level, rather than a sound-bite level,'' he said. ``The bottle is just one aspect of our activity. You truly have to have the whole discussion. As a society, we need to know the consequences'' of a range of materials on climate change, global warning and the environment.

In that vein, Jeffery urges leaders at corporations to ``think broadly about what you can do to leave the world as well off, if not better.''

``Measure and understand your impacts along the whole value chain, not just what you directly control,'' he said. ``Think about sustainability as a continuous process, a journey, not a destination.''

At the same time, Jeffery acknowledges the need to recycle more PET and other plastic materials, calling the current recycling rate of 23.5 percent for PET containers ``pathetic.''

``A pound of recycled PET is worth 30 cents a pound,'' Jeffery said. ``Why would you throw it away? The stupidity is not getting the bottle back. ... Once I sell it, I lose control and need help in getting it back.''

To improve U.S. recycling, Jeffery said, everyone from resin producers, consumer product makers, trash haulers, recyclers, municipalities and state governments ``need to come together. No company can do this alone.''

``We need a coalition of people to make comprehensive recycling come together in America to significantly improve recycling rates,'' he said. ``It is not something that is going to happen overnight. This is not a problem we are going to solve in the next two years.''

Regardless, Nestle has set a goal to get 60 percent of its material back by 2018.

``The only way this is going to happen is for us [and others] to have the perseverance to engage others, including those who don't like us, in a dialogue,'' Jeffery said.

``We have to engage partners that are like-minded that have the ability to do things at the local level because, at the end of the day, there has to be the will at the local level to get this material back so it can be used again.''

For its part, Nestle recycles the 3- and 5-gallon containers for water it delivers to 1.5 million homes and offices, using them about 35 times before grinding them into recycled resins.

In addition, Jeffery said Nestle is working with ExxonMobil Corp. to set up recycling programs at 7-Eleven Inc. convenience stores, is considering an expanded recycling partnership with Wal-Mart Stores Inc., and is hopeful that, within the next year, all the customers on its delivery routes ``will be able to return everything to us.''

Nestle is also working to develop alliances with cities, beverage companies and others, but that is a more challenging task.

He admits there is disagreement within the beverage industry as well as among environmental groups as to who should bear the cost of recycling and whether deposits or curbside recycling is a better approach.

``Recycling is a very sensitive issue, but I think we are on the road to an avenue of success,'' Jeffery said. ``There is a fair amount of alignment within the International Bottled Water Association. But we have a way to go at the Grocery Manufacturers Association and we are not in alignment yet at the American Beverage Association.

``The desire to address this may be more important than the alignment,'' Jeffery said. ``If everyone is not focused on the problem, we can't get everyone to the table. We need the involvement of companies like Procter & Gamble, Clorox, Kraft Foods and Heinz. We are going to need their help.

``Every company that uses plastics in its packaging has a responsibility to push for comprehensive initiatives to really move the needle on recycling,'' Jeffery said. ``It is not about not using [plastic containers], it is about getting them back.''

Jeffery said Nestle favors curbside collection, but notes that it is only available to 52 percent of households in the United States.

``We need to make sure that we get to all homes, apartments and public venues with curbside recycling. How are you going to get recycling rates up if people can't recycle?'' he asked.

Also, cities ``need to expand existing collection systems to reach parks, stadiums and other public venues, as a lot of products are consumed away from home,'' he said.

Jeffery is against the expansion of bottle-deposit programs, even though recycling rates in states with deposits range from 70-90 percent, and the PET collected in those 11 states account for more than 60 percent of the PET recycled nationwide.

``I am opposed to the expansion of existing bottle laws and new laws modeled after existing bottle laws, because they are not adequate,'' said Jeffery.

``If you are going to have a deposit, you need it on all containers — bottles, containers for health and beauty aids, laundry bottles and foods such as mayonnaise, mustard and ketchup.

``We need a system that gets back all containers,'' said Jeffery. ``If we are really concerned about recycling and doing something good, rather than just looking good, we need to have comprehensive recycling of all containers of value.''


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Nestlé's Kim Jeffery: Don't fight change, lead it

Mike Verespej

Published: October 6, 2008 6:00 am ET

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