Berry Global Group Inc. is taking what the company describes as a very bullish stand on the recovery and reuse of plastics in the company's fast-moving consumer goods packaging business.
The company's new commitment to achieve 30 percent "circular plastics" content by 2030 includes both recycled and renewable content including bioplastics. Achieving this so-called "30 by 30" goal would equate to Berry using more than 1 billion pounds of such material each year.
CEO Tom Salmon, in a Nov. 18 interview after the company's quarterly and year-end earnings were released, expressed confidence that Berry will be able to achieve the goal and then stretch beyond those numbers in the future.
"It's a target position. We want to begin also by setting aspirational goals for ourselves and goals, frankly, that we can meet. While it has some stretch in it, so did our 2025 goal that we're ahead of schedule on. Given the demand momentum that we're seeing in it, I feel very comfortable," Berry said.
The earlier goal, which Berry is ahead of schedule to achieve, is the use of 10 percent post-consumer resin by 2025 in the fast-moving consumer packaging segment. The company currently is in the "mid-single digits," Salmon said.
"Berry is going to demonstrate it's leadership, just as it has in virgin materials," he said. "Our customers, their customers, they are demanding change."
"This is something we will execute against. We will deliver on this commitment. The organization is aligned to it. The pathway, based on demand, just continues to grow. Which I think is exciting. It's what's giving me so much confidence," Salmon said. "We're very comfortable that by 2030 we can meet and deliver that goal."
Part of Berry's push to expand the use of recycled plastics involves a new agreement with PureCycle Technologies Inc., which is building a plant in Ironton, Ohio, to use solvent-based technology to recycle polypropylene. The two companies have just struck a supply agreement that calls for PureCycle to begin supplying resin to Berry in 2023.
PureCycle, just last week, indicated the U.S. Securities and Exchange Commission has launched an investigation into comments made by CEO Mike Otworth.
While Salmon said he could not comment on the SEC move, he did express confidence in PureCycle and its technology that is being licensed from Procter & Gamble Co. PureCycle plans to build a network of PP recycling facilities based on the P&G technology.
"We feel very comfortable that they will be able to deliver and execute against the agreement we've constructed with one another. This is going to be a great growth vehicle both for Berry as well as PureCycle," Salmon said.
Evansville, Ind.-based Berry also recently struck a deal with LyondellBasell Industries to provide recycled resin for cups for Wendy's restaurants.
"This is just a great, meaningful step forward of decoupling our packaging solutions from fossil fuels into the future in a way that we can see the path. The technology is in front of us. The waste substrate is in the environment that we can pull and draw from. We can take advantage of doing that both on the industrial and the commercial side. This is something we will execute against. We will deliver on this commitment," Salmon said.
Berry, meanwhile, also reported a substantial increase in sales in the company's recently completed fiscal year due mainly to inflation. Profit also increased.
Berry earned $733 million, or $5.30 per diluted share, on sales of $13.85 billion for the fiscal fourth quarter ended Sept. 26. That compares with profit of $559 million, or $4.14 per diluted share, on sales of $11.71 billion for the previous fiscal year.
The increase included 4 percent organic growth from existing operations.
Berry indicated the company has been able recapture the vast majority of its higher costs due to inflation during the year.