A changing global consumer landscape is having a big impact on packaging material decisions made by one of the world's largest food and beverage conglomerates.
That means a shift away from traditional developed-world markets toward Asia and elsewhere, a top official with Nestlé SA said Feb. 9 at The Packaging Conference in Las Vegas.
Frugality is in fashion, said Anne Roulin, global head of packaging and design at Vevey, Switzerland-based Nestlé. Consumers are demanding value for money, and mainstream commodity products the traditional bastion of packaging are being eclipsed by premium products and those targeted at the world's poorest consumers
Despite two years of global recession, Nestlé reported profit of $36 billion on sales of $115 billion in 2010. With more than 280,000 employees in 80 countries, the company sells 10,000 different products about 1 billion a day, she said.
Roulin said design and packaging considerations are being driven by five major challenges: a changing retail environment, a more diverse customer base, market polarization between rich and poor people, the speed of digital communications, and sustainability.
In developed countries, Nestlé's evolving business model places less reliance on a presence in big-box retail stores and more on private-label, specialty or boutique brands, Roulin said.
Although developed nations make up 60 percent of global gross domestic product, they have only 18 percent of the world's population, Roulin said. Also, their population growth is stagnant, with the median age 39.
Nestlé's biggest forecast growth segment is among consumers with annual incomes of $3,000-$14,000 annually, she said; thus North America and Europe will offer less room for growth, and Nestlé is expanding its presence into flexible packaging for commodity products and PET canisters to hold products in small-serving vending machines.
For developed countries, the company is introducing more smart packaging, with bar codes and integrated three-dimensional animation, to direct consumers to company websites and to increase recycling rates.
One of the things that we're looking at is also to use [bar codes], for example, to detect where would be the closest point [to the purchaser] to recycle the packaging, Roulin said.
Nestlé's first policy on sustainability was formulated in 1991, and in its evolution has come to rely on life-cycle assessments, promoting recycling and recovery, renewable materials and lightweighting, she said.
Recently, Nestlé switched to a woven polypropylene bag for Purina-brand pet food to replace paper sacks, which frequently were damaged during shipping, resulting in spilled product.
Even though the woven PP bag itself had higher [environmental] impact, it reduced the impact over the whole channel, due to reducing damage, Roulin said.
Nestlé's design team includes 350 specialists globally using an in-house scorecard to do life-cycle assessments. They're trying to single out one material, but are looking for the best for each application, she said. In many cases, plastics have replaced glass for packaging. Vegetable-based inks have been incorporated into labeling. Nestlé's Eco-Shape 9.8-gram water bottle, introduced in 2009 with a weight reduction of about 20 percent over the previous half-liter bottle saved the company 150 million pounds of PET in 2010, she said.
Nestlé also is looking at the future of bio-based materials. Having concluded that polylactic acid and other resins derived from food crops are not suitable for widespread use in packaging, Nestlé is paying attention to Brazil's Braskem SA and its commercialization of polyethylene from sugar cane.
From 2015 on, Nestlé will be interested in conventional or new bioplastics adapted to packaging applications that come from non-food sources such as wood, agricultural waste, drought-resistant plants and algae.
It's definitely not a panacea. We have to look very, very carefully at the source materials and the whole context of the agriculture including water use and the use of agricultural chemicals to determine the full impact of these biomaterials, Roulin said.
Nestlé's commitment to bioplastics and lightweighting extends to the use of thin-gauge conventional and 30 percent bio-based plastics in films, she said.