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

Todays Presentation
Explain Nestles 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

Nestl - 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

Nestl 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 Nestles 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
Whats 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 products in litter stream of Nestl

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 outdoors $3.25 billion p.a Packaged food and grocery products sold in the away from home sector $6.5 billion per annum (50% of total) Littered products $1.083 billion p.a = 541 million units (30% littered) Metals (5%) = 27 million units Consumed in a commercial setting $3.25 billion p.a (50% of total) = 41.5 million units LPB (6.5%) = 35 million units

Binned products $2.16 billion + $3.25 billion

Wood (5.5%) = 30 million units = 8 million units Glass (0.2%) = 1.5 million units

Landfill

straws

6% 7%

Bottle/can tops ice cream wrappers

2%

confectionery wrappers plastic containers (assumed yoghurt containers) PET bottles other beverage bottles

12%

0% 2% 64% 1% 2% 0% 2% 2% 0%

cartons (milk, fruit and milk flavoured) Soft/juice - steel Soft drink - aluminium Ice cream sticks soft drink - Glass REMAINING LITTER STREAM

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 LITTERED ITEMS X AREA X PERSISTENCE

DIRECT LITTER INDICATOR

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 INDICATOR X ENVIRONMENTAL IMPACT X RISK LEVEL CUMULATIVE LITTER INDICATOR

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

Confectionery wrappers
Amount = 28 million Area = 0.23m Persistence = 1y

DLI = 17.90
Enviro impact = 2
Ecosystem impact=1 Human impact = 1

DLI = 6.44
Enviro impact = 2
Ecosystem impact =1 Human impact = 1

Risk impact = 3
Regulation = 1.5 Reputation = 1.5

Risk impact = 2
Regulation = 1 Reputation = 1

CLI = 107.4

CLI = 25.76
Understanding FMCG Litter

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