understanding fast moving consumer goods (fmcg) litter

Understanding FMCG Litter

Understanding Fast Moving Consumer Goods (FMCG) Litter

Ahmed Hassan Nashaat, Environment Manager, Nestle

Hassan Nashaat, Director, Nolan-ITULeading on Litter Conference

May 2004 Melbourne, Victoria

Lazem a7ot el touch bta3i(Eng Osama advice :P)


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


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


Nestlé in Australia


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


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


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)


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


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)

Packaged food andgrocery productssold in the awayfrom home sector

$6.5 billion perannum

Consumedoutdoors

$3.25 billion p.a

(50% of total)

Consumed in acommercialsetting

$3.25 billion p.a

(50% of total)

Binned products

$2.16 billion +$3.25 billion

Littered products

$1.083 billion p.a

= 541 million units

(30% littered)

PRODUCTION CONSUMPTION DESTINATION

Plastics (82.8%)

= 448 million units

= 41.5 million units

LPB (6.5%)

= 35 million units

Metals (5%)

= 27 million units

Wood (5.5%)

= 30 million units

= 8 million units

Glass (0.2%)

= 1.5 million unitsLandfill

6%

7%

2%

12%

0%

2%

1%

2%

0%

2%

2%

0%

64%

straws

Bottle/can tops

ice cream wrappers

confectionery wrappers

plastic containers (assumed yoghurtcontainers)

PET bottles

other beverage bottles

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

REMAINING 64% 963 million littered

units

FMCG33%

496 million littered units

NESTLE 3%

50 million littered units

Nestle products as proportion / # in litter stream


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


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


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


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 NUMBER OF LITTERED ITEMS X LITTERED ITEMS X

AREA X AREA X PERSISTENCEPERSISTENCE

== DIRECT DIRECT LITTER LITTER

INDICATORINDICATOR


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


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 DIRECT LITTER INDICATOR X INDICATOR X

ENVIRONMENTAL ENVIRONMENTAL IMPACT X RISK IMPACT X RISK

LEVELLEVEL

==CUMULATIVE CUMULATIVE

LITTER LITTER INDICATORINDICATOR


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


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


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

• 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 fast moving consumer goods (fmcg) litter

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