Understanding Fast Moving

Consumer Goods (FMCG) Litter

Dr Brett Carroll, Environment Manager, Nestle

Peter Shmigel, Director, Nolan-ITU
Leading on Litter Conference
May 2004
Melbourne, Victoria

Understanding FMCG Litter

 Today’s Presentation

• Explain Nestle’s reasons for involvement in

littering issue
• Outline path that Nestle is following
• Overview research outcomes by Nolan-ITU for
Nestle
• Introduce a model for prioritisation of FMCG
litter
• Comments on improving littering management

Understanding FMCG Litter

 Nestlé - Background
• Founded in 1866 in Switzerland - largest Food
and Beverage company in the world
• Factories or operations in almost every country
on earth
• Set up business in Australia in 1908 and now
2nd or 3rd largest F&B company in Australia
• DID YOU KNOW? - MILO was a uniquely
Australian invention in 1934, now sold in over
30 countries worldwide

Understanding FMCG Litter

Nestlé in Australia

Understanding FMCG Litter

 Market Background
• Fast moving consumer goods (FMCG):
– purchased from retail for immediate consumption
– consumer: low cost, low commitment, frequent purchases
– industry: high volume, low margin
• Nestle FMCGs: confectionery, yoghurt, ice cream,
and beverages
• Changing demographics
– smaller households
– more ‘away-from-home’ consumption
– smaller, convenience oriented packs

Understanding FMCG Litter

 Nestle Reasons for Involvement
• Social / market factors leading to higher
probability of littering of FMCGs
• Corporate citizenship and environmental
management goals
• National Packaging Covenant participation
• Broadening of Nestle’s environmental management
program from internal operations focus to product
life cycle
• Risk management: public policy, reputation, brand

Understanding FMCG Litter

 Nestle Pathway
1. Better understanding of scope and nature of littering of
FMCGs
– What’s the size and scale of the problem?
– What currently works in managing it?
2. Open dialogue and co-operation
– Australian Food & Grocery Council Enviro Committee
– anti-littering stakeholders, including VLAA
3. Implementation actions
- some still being identified
- Eco-Design Guidelines (in Covenant Action Plan)

Understanding FMCG Litter

 Scoping the Problem
• Nestle engaged Nolan-ITU:
 conduct desktop review of existing litter data
 generate preliminary estimate of Nestlé
products in litter stream
 examine quality of existing litter data on food
and grocery products
 prioritise litter items
 outline current anti-littering initiatives

Understanding FMCG Litter

 Process
• Determine value of FMCGs (industry data)
• Determine value of consumed away-from-home
(AFGC estimate)
• Assign $2 per item (Nolan-ITU assumption)
• Determine potential litter items (CCC/BIEC data)
• Estimate # of FMCG litter items (KABC data)
• Estimate % of Nestle litter items (industry data)
• Prioritise Nestle litter items by significance
(Nolan-ITU methodology)

Understanding FMCG Litter

 PRODUCTION CONSUMPTION
DESTINATION

Plastics (82.8%)
= 448 million units

Consumed Littered products = 41.5 million units

outdoors
$1.083 billion p.a
$3.25 billion p.a LPB (6.5%)
= 541 million units
(50% of total) = 35 million units
Packaged food and (30% littered)
grocery products
sold in the away
Metals (5%)
from home sector
= 27 million units
$6.5 billion per
annum Consumed in a
commercial
Binned products Wood (5.5%)
setting
$2.16 billion + = 30 million units
$3.25 billion p.a
$3.25 billion
= 8 million units
(50% of total)

Glass (0.2%)
= 1.5 million units
Landfill
 straws
6%
Bottle/can tops
7%
ice cream wrappers
2%
confectionery wrappers

plastic containers (assumed yoghurt

containers)
12% PET bottles

other beverage bottles

0% cartons (milk, fruit and milk flavoured)

2% Soft/juice - steel
64% 1%
Soft drink - aluminium
2%
0% Ice cream sticks

2% soft drink - Glass

2%
REMAINING LITTER STREAM
0%

FMCG in Australian litter stream

 Nestle products as proportion / # in litter stream

NESTLE
3%
50 million littered units

FMCG
33%
496 million littered
units

REMAINING 64%
963 million littered
units
 Data Characteristics
• No “national” count since 1996
• Previous to today, no public estimate of total
size of litter stream or actual % of FMCGs in
litter stream
• Brand names generally unrecorded
• Inconsistent recording of packaging types
• Geographical dispersion not well established

Understanding FMCG Litter

 Process - another way of thinking
• Determine potential litter items (2003 KESAB)
– Extrapolate number of equivalent litter collection sites
across Australia
– Multiply by average number of items collected per site
– Multiply from a quarterly to a yearly equivalent
• Est. size of total litter stream = 622 m. items
• Apply estimated 23% of FMCG litter items (2003
KESAB)
– account for differences in beverages due to CDL
• Est. size of FMCG litter stream = 141 m. items
Understanding FMCG Litter
 FMCG Litter: How Significant?

• Major advances in understanding

factors that contribute to littering
• Less understanding of actual impact of
litter (with exception of some work on
direct financial cost of management)
• Critical to estimate impacts in order to
guide program priorities

Understanding FMCG Litter

 Direct Litter Indicator (DLI)
• Indicates the immediate, objective and
quantifiable aspects associated with litter
from a packaging type
– Area (m2) – Maximum area of ground covered by
FMCGs littered items
– Persistence (years) – Estimated amount of time
litter remains in the environment

NUMBER OF
DIRECT
LITTERED ITEMS =
LITTER
X AREA X
INDICATOR
PERSISTENCE
Understanding FMCG Litter
 Direct Litter Indicator (DLI)
• Results for key Nestle items:
– Confectionery wrappers = 7.86
– Ice cream wrappers = 2.89
– Yogurt containers = 0.17
– “Other” beverage bottles = 0.06
– Ice cream sticks = 0.02
– Bottle tops = 0.0036

Understanding FMCG Litter

Cumulative Litter Indicator (CLI)
• Adds the dimensions of:
– Environmental impact - in terms of ecosystem
impact (primarily impacts on wildlife) and human
toxicology (through emissions to water, air and soil);
– Risk Level – in terms of the likelihood and severity of
regulatory intervention and brand reputation
damage.

DIRECT LITTER CUMULATIVE

INDICATOR X = LITTER
ENVIRONMENTAL INDICATOR
IMPACT X RISK
LEVEL
Understanding FMCG Litter
 CLI Example -
Confectionery Wrapper
• DLI = 7.86
• Environmental impact = 2
• ecosystem impact = 1 and human toxicity = 1
• Risk level = 2
• Regulation = 1 and reputation = 1
• CLI = 7.86 x 2 x 2
• CLI = 31.44

Understanding FMCG Litter

Cumulative Litter Indicator (CLI)
(cont)
• Results for key Nestle items:
– Confectionery wrappers = 31.44
– Ice cream wrappers = 8.67
– Yogurt containers = 0.17
– “Other” beverage bottles = 0.18
– Ice cream sticks = 0.02
– Bottle tops = 0.01

Understanding FMCG Litter

 Comparative example
• Beverage containers
– Amount = 28 million
– Area = 0.13m
– Persistence = 5y
• DLI = 17.90
– Enviro impact = 2
• Ecosystem impact=1
• Human impact = 1
– Risk impact = 3
• Regulation = 1.5
• Reputation = 1.5
• CLI = 107.4
Understanding FMCG Litter
• Confectionery wrappers
– Amount = 28 million
– Area = 0.23m
– Persistence = 1y
• DLI = 6.44
– Enviro impact = 2
• Ecosystem impact =1
• Human impact = 1
– Risk impact = 2
• Regulation = 1
• Reputation = 1
• CLI = 25.76
 Insights
• Attempting to quantify problem creates impetus
for action by company, industry & stakeholders
• Prioritisation of items enables better targeting
of efforts
• Strong need for broadly accepted, consistent
and “official” litter measurement methodologies
• Collaborative approaches - on VLAA model -
necessary

Understanding FMCG Litter