Sustainability, Retailers & Packaging - What Retailers Want… and How it Will Drive Packaging TrendsTony Kingsbury, VP SustainabilityCardno ChemRisktony.kingsbury@cardno.com

Western Plastics Association Vancouver, BCOctober 29, 2013

Speaker Background - Tony Kingsbury

Current: VP, Sustainability, Cardno ChemRisk, Lead Sustainable Chemistry Practice5 years: Executive-in-Residence @ UC Berkeley, taught Sustainability & ran multidisciplinary Sust. Center~ 30 years Dow Chemical: Experience

> Production Engineer… making ABS, GPPS, HIPS> Product Development … plastics> Marketing, Public Affairs> Public Policy … Sacramento, Wash DC, Brussels, Beijing, etc.> Environmental Affairs> Global Sustainability> Sustainable Chemistry> Value Chain Sustainability Engagement Lead… Walmart> Breakthroughs to World Challenges Corp. Goal Owner> Founding Member of Sust Pkg Coalition; President of BPI; > Engaged with CPIA, ACC, APC, FPI, SPI, WPA,SPC, TSC, APR, etc.

Cardno ChemRisk Practice AreasHealth and Risk Assessment

> Consumer products> Medical devices> Food safety> Proposition 65

Exposure Assessment> Historical exposure simulation studies> Air Modeling > Dose Reconstruction

Product Sustainability> Alternative Assessments> Chemistry reviews for Sustainability> Getting ahead of the regulatory curve> Strategic Sustainability Consulting

Toxicology and Ecotoxicology> Environmental risk assessment> Nanotechnology> Occupational Tox and Med

Epidemiology and Occupational Health> Biomonitoring and biomarkers> Epidemiology> Industrial hygiene

State of Art Analyses For Evaluating Corporate “Conduct”

> Asbestos & Benzene> Beryllium, Chromium & Dioxins> Health and Safety

Outline

> Sustainable Packaging Defined> Retailers Pressures and Response> CGP Response> What Do Consumers Want?> Healthier Products> Conclusions for Plastics

A wise Mentor in the Plastics Resin Industry once told me

Customers want three things in their plastics … they want them to be:

as strong as steel; as light as air; and as cheap as dirt

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What does this have to do with Sustainable Packaging?

Retailers and Consumers Want Packages that:1. Do the job: (strong as steel) … you need to deliver the goods

intact … functional excellence2. No excess packaging (light as air)3. Are not expensive (cheap as dirt)

But you can’t stop here… there are other growing considerations that must be taken into account!

Retailers Feeling the Squeeze… & Pushing Back

Retailers Peers

NGOs

CPGs

Walmart Sustainability

Our three aspirational sustainability goals:

To be supplied 100% by renewable energyTo create zero wasteTo sell products that sustain people and the environment

Plastics Specific: Walmart aims to sell products with packaging that can be recycled by most customers and optimize recycled content that span across our categories …Suppliers that depend on plastic products and packaging will be measured on their ability to increase recyclability and recycled content over time – in a responsible way – We encourage our suppliers to develop a roadmap for continuous improvement and inform Walmart about how they plan to make a difference in the coming years.

that heavily rely on plastic to produce their products will be measured on their ability to increase recycled content over time – in a responsible way –through our Sustainability Index program.

P&G Sustainability Vision

P&G is the largest consumer packaged goods company in the world today. Our environmental efforts are guided by both the responsibility we have to operate sustainably as well as the opportunity these efforts present to grow our business. Our program is inspired by our long-term sustainability vision.

Our Long-Term Environmental Sustainability Vision

Our Vision, announced in 2010 includes:Powering our plants with 100% renewable energyUsing 100% renewable or recycled materials in all products and packaging Having zero consumer or manufacturing waste going to landfillsDesigning products that delight consumers while maximizing the conservation

of resources

Consumers Say: Environmentally Smart Packaging Is Important; Many Options/Dimensions Exist

Source: NMI 2012 LOHAS Survey

Importance of Environmentally Smart Packaging Has Grown Substantially Over the Past 5 Years, Particularly Bio Materials

Source: NMI 2012 LOHAS Survey

Changing Consumers Behavior is a Huge Challenge

Source: NMI 2012 LOHAS Survey

Consumers Like Renewables

Source: NMI 2012 LOHAS Survey

Gable Top & Aseptic (71%)

Plastic Bottle (53%)Snack, Chip & Cookie Bags (40%)

Plastic Bags (32%)Foam PS / Styrofoam (20%)

Steel Cans (69%)

Good News for Plastics

Source: NMI 2012 LOHAS Survey

Are you exploring biobased, renewables & compostables?

Clear Trend: Retailers Want ‘Healthier’ Packages & Transparency

Walmart just announced that ~10 chemicals will be ‘discouraged’ form products and packages. List not public but best guesses include Formaldehyde, Triclosan, Phthalates, etc. not a big part of packaging polymers. CPGs reporting all components through the WERCS.

Target Stores just announced a Product & Packaging Sustainability Program

Packaging credit driven by recyclability / recycle content. 1600 chemicals banned / discourage… a new list to worry about… program administered by GoodGuide™… Reporting requirements extensive

Sears - Sustainability standards

> Reduce the amount of packaging we use wherever possible> Eliminate all unnecessary petroleum-based packaging. > Create packaging from recycled and sustainable resources.> Soy based inks for printing> Eliminated all volatile coatings> All Hangtags are made from FSC certified paper> All paper used in packaging has a minimum of 40% post consumer

recycled waste> Right sizing of packaging to reduce cube size wherever possible.

The Next “Big” Thing

California Green Chemistry for Safer Consumer Products Regulations

Regulations took effect October 1st, 2013Includes ~1050 candidate chemicals… 155 on initial list (we expect these to be the highest priority5 Priority Products expected to be ID’dby April 2014All products sold in California that contain any amount of these chemicals are subject to the law

The Next “Big” Thing…Key Elements of SCP> California’s DTSC published list of ~1,050 candidate chemicals identified by other

authoritative bodies as presenting a human health or environmental hazard. Authoritative sources include:

> EU REACh SVHC - CA Prop 65 - US EPA IRIS - Canadian DSL - IARC> Candidate chemicals may also be substances that meet criteria for causing adverse effects

and presenting significant opportunity for exposure> Chemical’s hazard traits> Aggregate effects> Environmental fate

> DTSC to evaluate products containingthese chemicals and develop a list of more than five “Priority Products”

> Responsible entities will perform a two-tiered alternatives assessment (AA) for product and the chemical of concern

> DTSC requires regulatory responses> Final AA becomes a public document

ConclusionsLook at the long term trends…what do consumers, CPGs & Retailers all want?

Recycling and Recycle ContentBioBased / Renewables

Tough for plastics… but not impossible. Let your resins suppliers know.Figure out the long term cost deferential

Focus short term on your strengths… Use LessUse Less MaterialUse Less Energy = Lower Cost Packaging

Know All Components of Your Package… Down to ppm LevelsBe Prepared for Much Greater Level of Transparency

Key Issues To Keep On Your Radar Screen> Nano> Additives> Mineral Oil> Environmental estrogens> Obesogens> Cost conscience supply chains> Lists Driving Material Choices

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Thank You!

&

Questions

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Extra slide… plastic packaging case study

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Case Study:Contamination from very unsuspected sources…

Packaging, Shipping, and Storage

Background> Cookie manufacturer found some cookies

having an “off/odor and taste” during a routine quality control inspection

> Questions to answer:– Are the cookies fit for consumption?– If someone ate any of them, are they at risk?– Have the cookies been contaminated?– What is the source of the contamination?

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What CardnoChemRisk Did

> The warehouse floor and walls were sampled for a variety of pollutants

> Detected: coal tar, naphthalene, petroleum distillates, hexane, toluene, xylenes, etc…

> Naphthalene was detected on wooden pallets on which the cookies were stored

> Performed risk assessment for person consuming 4 or 10 cookies/day

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What We Learned

> Only certain cookies impacted by petroleum solvent vapor while in storage

> Styrene, α-methylstyrene, and naphthalene were detected

> Impacted cookies did not pose increased health risk

MmmCookies… Doh!

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Outcome

> All batches that had an adverse odor were destroyed

> New warehouses selected> Strict “transportation and storage” rules

were implemented> Learned that supply chain and

production audits were not adequate to control quality

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