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The Future of Packaging THE POWER OF PLASTICS IN DAIRY WELCOME TO THE FUTURE OF PACKAGING WE CREATE, MANAGE AND SYNDICATE FMCG PRODUCT CONTENT FOR OMNICHANNEL USE. At Nielsen, data drives everything we do—even art. That’s why we used real data to create this image. CopyrightCopyright © 2018© 2018 The The Nielsen Nielsen Company Company (US), LLC. (US), Confidential LLC. Confidential and proprietary. and proprietary. Do not distribute. Do not distribute. 1 THE POWER OF PLASTICS IN DAIRY WELCOME TO THE FUTURE OF PACKAGING Earlier this year, every major supermarket in Britain pledged to eradicate unnecessary single use plastics by 2025, under a new “UK Plastics Pact”. The agreement organised by Government-backed waste charity, Wrap, is a world leading collaborative industry initiative which aims to transform the way businesses use plastic and prevent plastics polluting the environment. This means that single use plastics will only be allowed if they are deemed absolutely necessary and are made from recyclable materials. Recycling units across Britain have also signed the pledge and will start recycling a wider variety of plastics which currently go to landfill sites. Already many retailers and manufacturers across Britain have promoted that all the plastic packaging produced will be reusable, recyclable or compostable within seven years, up from 45% today. Unnecessary plastic packaging such as multi-packs of fruit and vegetables will be abandoned by retailers over the next seven years in favour of loose produce. Other key areas that retailers and manufacturers are focusing on area ready meals and removing the black plastic trays as well as non-recyclable plastic wraps on items such as yoghurts, juices, herbs and flowers. The move to recyclable plastic could also see the end of squeezy bottles of table sauces such as ketchup and mayonnaise, as the silicone component can contaminate other recycling materials. Additional to this, products made by polystyrene such as snap pots of yoghurts, beans and other foods may also be under threat as not all material is recyclable across Britain. Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. 2 DAIRY INNOVATION The growth of healthy eating in the UK has resulted in the population changing their shopping habits and purchasing options that are both healthy and convenient. The dairy sector is driving much of this growth with soya milk, shakes and yoghurts among the more common changes in consumer’s purchases. Despite milk being well known as a good source of nutrients including protein, calcium and vitamin D, cow’s milk is no longer a key part of the population’s diet as many consumers now purchase alternative options. With 3.5 million Brits following a vegan diet, consumers prefer to have plant based milks such as soy, almond, rice or coconut. Trends have also shown an increase in the number of dairy free consumers in response to an intolerance to milk. UK supermarkets have had to adapt to these changes and preferences over the past couple years as consumers now expect these products to be available to purchase at any time, any where. Changing consumer purchasing habits have presented a challenge to wholesalers and retailers alike, as they have had to adapt sales and distribution channels to meet consumer needs. One of the biggests challenges now is reducing the amount of plastic used in its packaging, as the dairy category is a big contributor to the plastic debate. THE EIGHT KEY DAIRY CATEGORIES FRESH MILK MILK SUBSTITUTES LONG-LIFE MILK MILKSHAKES FRESH CREAM LONG-LIFE CREAM SPECIALITY EVAPORATED & CREAM CONDENSED MILK Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. 3 THE CURRENT SITUATION With recent news focusing on plastic waste and how it is ‘one of the great environmental scourges of our time’, Nielsen Brandbank has taken a look into how the dairy category is contributing to this and what manufacturers are doing to fight plastic waste. For years the UK population received their milk via daily milk men delivering to their front door. But between 1975 and 2015 the amount of milk sold in glass bottles shrank by 90%, resulting in manufacturers using plastic as their main packaging material. Unfortunately with this change, it meant that the dairy category began to contribute to the plastic waste with 80% of the 6.3 billion tonnes of plastic waste generated in 2015 going to landfills. Over the past five years there has been a 5% decrease in the amount of plastic used in the fresh milk category, however with fresh milk alternatives becoming an increasingly popular trend within the industry, NPD in this category has resulted in a 7.5% increase. 100% 75% 50% 25% FRESH MILK MILK SUBSTITUTES LONG-LIFE MILK MILKSHAKES Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. 4 Fresh milk is far from alone in the dairy category when it comes to contributing to the environmentally damaging plastic issue. Dairy drinks such as milkshakes are the fastest growing, and 60% of their products are made up of plastic, reduced from 68% in 2012. With sales increasing 8.5% on volumes up 6.1%, it is clear to see that NPD such as breakfast drinks, ready-to-drink coffee and protein-enriched products are being driven by the increasingly busy lives that consumers lead, contributing to the need for on-the-go snacking. CAN DAIRY REALLY GO PLASTIC-FREE? For many dairy brands, the move towards more sustainable packaging has already started. In 2008 the Dairy Roadmap was launched and has seen 85% of HDPE (high-density polyethylene) milk bottles now recycled by UK dairy processors and more than 95% of tertiary packaging made from reused or recycled material. In other categories, bioplastics - entirely renewable plastics made from plant based sources such as sugars or tree saps have already gained traction with Innocent Drinks launched a bottle made from 14% sugar- cane plastic in April. Change to the type of packaging used on dairy products will cause significant challenges to many suppliers, as millions of pounds have been invested in recent years to integrated plastic bottling over glass milk bottles. Iceland who have committed to ditch single-use plastic from its shelves by 2023 said that ‘we have now briefed all our suppliers on the removal of plastic, this will require substantial capital expenditure and investment, which will not happen in the short term.’ It is likely that the industry will see smaller, tertiary brands and businesses will move into the new packaging first and lead the way with bigger companies following. In response to the growing public backlash against the huge volumes of plastic rubbish, the UK’s largest supermarkets have signed up to support the UK Plastics Pact. Asda, Morrisons, Tesco, Sainsbury’s and Waitrose are among the 97 businesses that are supporting the new pledge to transform the UK plastic packaging sector by meeting four world-leading targets by 2025. Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. 5 BY 2025, BY 2025, 100% 70% OF PLASTIC PACKAGING TO BE REUSABLE, OF PLASTIC PACKAGING EFFECTIVELY RECYCLABLE OR COMPOSTABLE. RECYCLED OR COMPOSTED. BY 2025, BY 2025, ELIMINATE SINGLE-USE PACKAGING 30% THROUGH REDESIGN, INNOVATION OR AVERAGE RECYCLED CONTENT ACROSS ALTERNATIVE (REUSE) DELIVERY MODELS. ALL PLASTIC PACKAGING. WHAT’S NEXT? While the shift to plastic free supermarkets isn’t easy for manufacturers and retailers, it is not impossible. UK retailers are currently working hard to create plastic free aisles to start the process of optimising their supermarkets to be 100% plastic free. Currently, this is a challenging request for the dairy category as some foods require plastic packaging for food safety and to extend the food expiry date. It is difficult to predict what the future will hold, but with the support from the government and campaigns such as Wrap, the dairy industry has the capability to transform the use of packaging and the amount of plastic used over the next decade. Want to find out more? Contact the Nielsen Brandbank team at [email protected] or call +44 (0) 330 555 33 44. Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. 6 ABOUT NIELSEN Nielsen Holdings plc (NYSE: NLSN) is a global performance management company that provides a comprehensive understanding of what consumers watch and buy. Nielsen’s Watch segment provides media and advertising clients with Nielsen Total Audience measurement services for all devices on which content — video, audio and text — is consumed. The Buy segment offers consumer packaged goods manufacturers and retailers the industry’s only global view of retail performance measurement. By integrating information from its Watch and Buy segments and other data sources, Nielsen also provides its clients with analytics that help improve performance. Nielsen, an S&P 500 company, has operations in over 100 countries, covering more than 90% of the world’s population. For more information, visit www.nielsen.com. Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. 7.
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