10/09/2020 – News / Sustainability / Plastic / Recycling / Packaging / Food-Grade / Nestlé
Nestlé invests $30m in Fund to help accelerate US shift to food-grade recycled plastics
Nestlé today announced a US$30 million investment in the private equity fund of circular economy investment firm Closed Loop Partners, in order to lead the shift from virgin plastics to the use of food-grade recycled plastics in the US.
This investment is the first to utilise Nestlé's packaging venture, the Closed Loop Leadership Fund – established earlier this year, as part of the firm’s overall investment of up to CHF 2 billion (US$2.18bn) to accelerate the development of innovative sustainable packaging solutions.
This first investment will help upgrade US recycling infrastructure and secure access to food-grade recycled plastics.
Addressing the global plastic waste challenge
“This investment is one of many solutions we are exploring to address the global plastic waste challenge,” said Véronique Cremades-Mathis, Global Head of Sustainable Packaging at Nestlé. “It will help create a more sustainable recycling system and, at the same time, assist us in achieving our commitment to reduce our use of virgin plastics by one third by 2025. This is particularly important as increasing the use of recycled plastics could substantially reduce the environmental impact of our packaging.”
Closed Loop Leadership Fund is a private equity fund that was created to acquire companies along the value chain with a view to building circular supply chains. The fund invests in companies that aim to increase recycling rates in the US and keep valuable materials in packaging supply chains by integrating and improving all aspects of supply chains – from access, collection and sortation to processing.
According to the United States’ Environmental Protection Agency, the US recycling rate for all materials, including plastics, is currently around 25 per cent. Recycling rates, however, can vary significantly by material type. This is due, in part, to the different ability of municipal recycling systems to accept and process materials.
“It is important that we do our part to help keep recyclable materials out of landfills, and increase recycling rates in the US, and this investment is a significant move in that direction. It is also a critical step in our effort to secure access to high-quality, food-grade recycled plastics which can be converted into new packaging material for use across our product portfolio,” said Steve Presley, Chairman and CEO of Nestlé USA.
Closing the loop on valuable materials
The investment will be used for the financing of Closed Loop Leadership Fund's acquisition of well-established, best-in-class companies that are advancing the circular economy in the US. The Fund aims to increase recycling rates by an additional 25 percentage points in areas serviced by the portfolio companies.
“Nestlé's investment is a significant commitment to help modernise, optimise and capitalise circular economy infrastructure in the US, and harness innovative technologies to keep materials in manufacturing supply chains,” said Ron Gonen, CEO of Closed Loop Partners. “In addition to the investment, Nestlé has committed to create an end-market for the food-grade recycled plastics processed through the companies we acquire. This will enable us to fully close the loop on valuable materials.”
Through its investment in the Closed Loop Leadership Fund, Nestlé will have access to recycled plastics feedstock processed by companies in which the Fund will invest in order to achieve greater volumes of food-grade recycled plastics for its packaging.
Advancing America’s circular economy
As consumer interest in more sustainable packaging continues to grow and manufacturers compete for supply, having access to high-quality food-grade recycled PET, polyethylene (PE) and polypropylene (PP) will increase Nestlé's ability to incorporate recycled plastics into packaging across its food and beverage portfolio. The increasing use of recycled plastics will help reduce carbon footprint, aligned with the company's ambition to achieve zero net greenhouse gas emissions by 2050.
This investment has the potential to impact a variety of brands in its US portfolio. Nestlé uses PET in bottles for Coffee mate and Starbucks creamers, in trays for Stouffer's entrees, and across its bottled water portfolio, having doubled the amount of rPET used since 2019 across its still water portfolio in the US to 16.5 per cent. The company uses PE in rigid canisters of Nesquik powder, and PP in Lean Cuisine trays and the new Gerber Incredipouch, a first-of-its-kind, single-material baby food pouch designed to increase recycling value. Flexible films appear in a variety of packaging formats, including bags of Nestlé Toll House morsels and the wraps on refrigerated cookie dough.
This announcement builds on Nestlé Waters North America's US$6m investment in Closed Loop Partners’ Infrastructure Fund, which finances recycling programmes and infrastructure improvements to create a circular economy in the US.
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