Food giant Nestle on Thursday said it will invest up to two billion Swiss francs ($2.07bn) to source more recycled plastics for packaging its products and reduce its use of new plastics by a third by the year 2025.
Regularly cited by environmentalists as one of the top plastic polluters, Nestle is under pressure to show it is serious about addressing the waste reduction problem.
The Switzerland-based company has pledged to make 100 percent of its packaging recyclable or reusable by 2025.
“We are high up on the list because we are one of the largest companies out there in packaged goods and now we’re also taking pretty big steps in using our size to actually solve the problem,” Nestle chief executive Ulf Mark Schneider told journalists.
Nestle will allocate more than 1.5 billion francs to pay for the extra cost of food-grade recycled plastics.
“At the moment, outside PET bottles, there’s not a lot of recycled plastic available that is suitable for packaging food,” Nestle chief technology officer Stefan Palzer told Reuters News Agency on the sidelines of an event. He said Nestle’s readiness to pay a premium should encourage investment in the area.
Schneider said the investment would have a neutral impact on earnings.
Industry peer Unilever has said it wants to halve its use of new plastic by 2025. Schneider said Unilever’s goal had set a high benchmark for the industry, but most of the company’s plastic packaging did not need to be food-grade quality.
Nestle, known for KitKat chocolate bars and Maggi soups, will also launch a 250 million franc sustainable packaging venture fund to invest in promising startups in that space.
Schneider said there was a very vibrant food startup scene on the west coast of the United States for both food and food packaging.
“There’s more venture capital flowing into the food space these days because there’s a lot happening there and the payback also comes quickly, after six months you know if the product is good,” Schneider said.