Plastic Dreams

In March of 2020, Zainab Farhat, my sister, and a recent studio arts graduate, exhibited a piece titled ‘Strata’ at a gallery in Dubai that imagined what future generations will discover centuries from now when they study earth’s crust: for the first time, there will be plastic. A lot of it.

?Her work struck a chord with me on a personal and professional level. Like many people in the consumer-packaged goods (CPG) industry, I trusted that the brightest minds in the world were focused on the plastic problem, and that doing my part at home in reducing, reusing, and recycling was perhaps the best contribution I could make to the cause.

?Inspired by Zainab’s work, I decided to dive deeper into the plastic problem and what I learned surprised me. I write this article to:

a.????Spread awareness on the size of the plastic problem and where it originates.

b.????Shed light on the slow progress that we’ve made so far and the reasons behind it.

c.????Discuss the wider stakeholder ecosystem and the importance of government support.

d.????Reflect on the indispensable role of CPG professionals in making a difference, and offer some practical tips to get started.

?If you’re in a position of influence, an industry insider, or anyone willing to lend a voice and play a role: this is for you.

Key Facts & Figures

Plastic is a derivative of fossil fuels and its versatility and low production cost helped transform many industries in the 20th century. One wouldn’t have to make a strong case for why plastic is so abundant in almost everything that we touch: it’s cheap, chemical resistant, strong, light, and malleable at high temperatures and has a multitude of applications across consumer and heavy industries. Since going mainstream, plastic has played a pivotal role in expanding food security, healthcare and hygiene to many low-income communities across the world.

Plastic started becoming a mainstream commercial product in the 1950s with about 2 million tons produced every year, and it came with a challenge that became more apparent decades later: Plastic is very cheap to make, but a lot more expensive to manage and destroy, and has a low recyclability rate that eventually falls to zero. Most importantly, plastic does not decompose.

We now produce and throw away close to 400 million tons (2020) of plastic every single year. Here’s a quick round up to help put things into perspective:?

1. 9.2 billion tons of plastic have been produced since 1950, of which 50% happened in the last 20 years.
2. More than 90% of all plastic ever produced became waste and is still in the environment between landfills and oceans. This is 26 times the weight of all humans on earth today.???????
3. The current annual global recycling rate of plastic is 9%.
4. The current annual US recycling rate is also 9%.
5. Eventually, if not incinerated, all recycled plastic becomes waste that will never decompose.
6. In the environment, plastic breaks into smaller pieces called microplastics (grain of rice sized and smaller).
7. 33 billion pounds of new plastic waste enters the ocean every year. That’s the equivalent of throwing five garbage bags full of trash on every foot of coastline around the world. (National Geographic)
8. By 2050, we will have more plastic than fish in our oceans.
9. A study found that 25% of fish have plastic in their guts and filets, with a 2% annual increase observed.
10. A study of tap water in 14 countries (including US & Europe) found micro plastic in 80% of tap water samples.
11. Studies found that humans ingest at least 50 thousand microplastic particles a year, with babies observed to have 15 times more microplastics than adults
12. Recent studies found microplastics in the placenta of unborn babies, and even in human blood.
13. The impact of microplastic on the human body requires further research and is not well understood or funded.

Plastic is already ubiquitous in our environment and even in our bodies. The trouble with the above isn’t only what’s already taken place, but what continues to happen: Plastic production and waste continues to increase globally, and key stakeholders in the industry continue to campaign for unsustainable solutions.

Now that we know that the size of the problem, let’s explore where all this plastic is coming from.

?Value Chain & Contributors

?Let’s take a quick look at the plastic supply chain:

The plastic supply chain can be divided into 3 main categories:

1. Raw material production: Oil companies producing the main raw material.
2. Manufacturing & end users: Companies converting raw material to plastic products with commercial applications to satisfy demand from end users.
3. Waste management: Industry concerned with disposal and recycling of plastic waste.?

Plastic and the whole value chain surrounding it exists because of plastic’s utility: there’s a need for cheap, durable, flexible, light weight, easy to ship, reusable (sometimes) material with many applications. It’s important to view the plastic industry from this lens to be able to focus on solutions that can provide this utility at a reasonable cost. Therefore, the solution must stem from changes to the end products that use plastic and create demand for it.

While all participants in the plastic supply chain have a responsibility towards a more sustainable future, it is imperative to understand and focus on solutions that would create end user (2nd category above) demand for more sustainable options.?

CPG Contribution

The consumer product industry is key to unlocking long-term solutions to our plastic problem for two main reasons:

1-???It generates the largest amount of plastic

2-???Plastics used in consumer products are predominantly single use

In contrast, while plastics used in the construction industry are a high contributor to plastic production annually (17%), a plastic pipe can serve decades before needing replacement, unlike most consumer industry plastics.

Let’s look at the annual contribution to plastic production by application:

40% of all plastic made every year is single use, and that’s because 50% of all plastic production is made for consumer applications that are single use in nature. Knowing that recycling efforts are also heavily focused on the consumer industry (PET plastic bottles as an example) and knowing that you can’t recycle plastic forever and that all of it will end up in the environment, it raises a fair question of whether the strong CPG push to improve recycling rates is the best long-term solution.

Partial Solutions

The common discourse on solving the plastic problem is usually pointed at players or solutions that are generally unsustainable. A few examples:?

1. Raw Material Production Companies: Oil companies are responding to demand created by consumers and industries that cater to them and choose plastic in their products. Why plastic? Because it’s cheap. Example: soda and water companies would rather make the higher margin on plastic bottles vs. aluminum cans (approx. 20% more expensive). Same logic applies to plastic bags, straws, wrapping material etc., and if consumer product companies redesign their products to exclude plastic, raw material production would drop as a result.
2. The Consumer: On one hand, consumers are flooded with plastic containing products (food, beverage, personal care, textiles, bags) at a low price, with more sustainable options being less affordable, making the choice more and more difficult especially for middle and lower middle-class families. On the other hand, the consumer is under the illusion that separating your recyclables is the way to go. Knowing that recycling rates are below 10%, and even if the number continues to increase, we know that plastic cannot be recycled forever and will ultimately end in a landfill and the environment, to never biodegrade.?
3. Corporate Recycling Targets: With increased consumer awareness and environmental, social and, governance (ESG) pressure, leading plastic waste producing companies responded with initiatives focused on increasing recycling rates and increasing percentage of recycled plastic used in production. While these initiatives are a small step in the right direction and will reduce virgin plastic production by a small amount, we know that plastic can’t be recycled away and will eventually end up in the environment. Coca-Cola for example is making great progress on targeting 100% of their packaging to be recyclable by 2030. As we know, 100% recyclable does not mean will be 100% recycled, and a more serious initiative should target absolute plastic output reduction instead.
4. Waste Management: Insufficient waste management systems are detrimental to the environment, especially marine ecosystems. While the US is the biggest consumer of plastic (and producer of plastic waste), leakage into the ocean is minimal compared to other parts of the world (this excludes plastic waste that’s exported and ends up in marine ecosystems indirectly). While waste management improvements are imperative to protect the ecosystem, they do not provide a long-term sustainable solution. Even in the US where less than 1% of plastic waste is ‘mismanaged’, close to 75% of all plastic ends in landfills. As we now know, landfill plastic will eventually become microplastic and will make its way back into the environment, as it’s doing already.

Because end users (companies that market and sell products that contain plastic + their end consumers) are the key driver of demand for plastics, a real long term sustainable solution must stem from a change in end products. Initiatives that focus on improving recycling rates and improving waste management are a step in the right direction, however they must be part of a broader approach that should aim at replacing plastic by design, or at a minimum, reducing plastic output as a matter of priority.

Wider Stakeholder Environment

The most obvious challenge in transitioning the world away from plastic is economic: how do we create a set of economic incentives that accelerate participation in a meaningful transition?

The plastic industry involves a few big players that are:

1. Traditionally structured to optimize economic output.
2. In control of tremendous amounts of resources that wield outsized economic, political, and social power.

The above conditions create an environment with high inertia that requires a sizable force to change its direction – a force that is slowly building. Consider the following:

1. 13 oil companies contribute 50% of virgin single use plastic production.
2. 11 banks control 50% of all lending and underwriting of single use plastic production.
3. 5 investment funds control 50% of single use plastic production equity.
4. While CPG plastic production numbers by company seem to be closely held, annual plastic reports consistently rank these 10 companies as top contributors to plastic waste based on global cleanup projects.

To put in plainer terms, the plastic industry is controlled by a relatively small group of companies, banks and funds that are traditionally interested in expanding shareholder equity and value, and an accelerated transition away from plastic will be costly to their bottom lines (in the short to medium term at least). The economic incentives and structures of the industry will dictate the pace of our transition away from plastic, not because big organizations are evil, but because these are the underlying rules of competition in a free market environment.

But not all hope is lost. In addition to continued pressure on organizations and investment funds to make bolder ESG commitments, there are 2 key enablers that have historically played an important role in key transformational initiatives on a global scale:

1. Technological Advancements.
2. Government Programs that encourage and fund technological advancements.?

Sometimes technological breakthroughs are a result of private enterprise investing in R&D, but often these breakthroughs are enabled by and accelerated through government programs that invest in or incentivize investment in certain sectors. GPS, MRI, the internet, genome sequencing, speech recognition, AI, and many more breakthroughs are a result of direct funding through government programs. Check out this great article that includes 22 examples of technological breakthroughs that were made possible by direct government funding.

A great example that we’ve witnessed in the last few years is the acceleration of the electric car industry, enabled by a combination of technological advancements that reduced the cost of batteries, supported by government programs that encouraged and rewarded production of low emission vehicles.

Between 2019 and 2021, Tesla made approximately $4 billion USD in profit from green credits (which is how Tesla turned a profit for several years) that were earned through a government program that was created to incentivize the auto industry to produce low emission vehicles and compensate them for potential losses and their investments in R&D.

While the question of larger economic incentives and policy making is an important topic that deserves its own deep dive, and until technological breakthroughs and serious government support present serious alternatives to plastic on a global scale, there’s a lot than can still be done to make progress.

Practical Next Steps for CPG Professionals?

Influencing government programs and large investment funds might sound like an insurmountable challenge for the average person. While every vote counts (through elections or where you choose to spend your dollars), CPG professionals are in a unique place to make a sizeable difference.

I’m a believer in the power of change from within, and CPG professionals at all levels in an organization are in a unique position to make a difference in a way that can bypass the structural inertia in the plastic industry by finding solutions from within without major disruption in economic output.?

If you’re a CPG professional, I encourage you to reflect on the following topics, and to put in motion some of these recommendations that can both help you identify the size of your contribution to plastic production, and to track your progress in making the world a better place. ?

1) Know Your Numbers

Do you understand your total plastic output as an organization? If not, do the work. This number exists in your systems and can be derived in multiple ways like:

a.????Looking at your packaging material consumption and isolating plastic components.

b.????Deriving a plastic percentage component of every item sold and multiplying it by a volume factor.

c.????Considering other plastic contributors in your operation such as plastic used in logistics, in market displays, in your offices etc.

Awareness is an important first step in attempting to tackle the problem from within. Arriving at a ballpark figure isn’t a tedious exercise and can help establish base awareness as you work on formulating a more detailed strategy.

2) Lead From the Top

If you’re in a senior leadership position in your organization, you’re in the best position to set forth a meaningful movement towards reducing your plastic contribution. Consider the following:

a.????Create a movement: Reducing your organization’s environmental impact is a shared value and desire that is easy for members of any corporate community to get behind. Capitalize on that shared feeling, talk about it, and encourage participation. Create a culture of activism. Tell the world about your plans, and your end customers will reward you for it.

b.????Plastic reduction as a long-term strategy: Expand your vision. Recognize that future generations will be increasingly aware of the environmental impact of the businesses they choose to buy from. Your best long-term bet is to lead the movement to serve your current and future customers, and to attract future talent.?

c.????Integrate a real plastic reduction target into your long-term objectives: Increasing recycling cycles is an honorable step forward, but real progress is reducing absolute plastic tonnage output. Break down your objectives into projects and annual milestones.

d.????Create long-term incentives tied to plastic reduction targets: Incentivizing your top, middle and lower management to deliver both business and environmental results. Many good causes are lost due to conflicting incentives. Next time you structure your bonus or equity schemes, think of integrating plastic targets in them.

e.????Lobby policy makers: Not to deregulate plastic production, but to provide financial incentives and support large scale R&D programs to find technological breakthroughs. Serious R&D funding is one of the best bets to move the needle on a global scale.?

3) Lead From All Levels

Big CPG manufacturers operate at a massive scale, making even small changes very meaningful in environmental impact and plastic reduction.

In corporate cultures that instill a sense of ownership and true empowerment across the organization, anyone at any level in the organization can make a difference. Consider these thought starters:

a.???Innovation teams: As innovation teams study market opportunities and create products that serve potential customer/occasion segments, they operate within a set of hurdles like brand fit, minimum revenue, margin/profitability etc. Consider building an environmental hurdle into your innovation process to ensure that more environmentally friendly options are considered. Introduce a plastic hurdle, and start tracking total plastic saved from the environment.

b.???Manufacturing teams: Audit your operation to quantify your plastic use across product conversion, handling of raw materials, transportation, and use of disposable supplies. Reduce and reuse where possible and quantify your annual reduction.

c.???Procurement teams: Are you on top of the latest developments in packaging and textile technology? When was the last time you explored suppliers and products with non-plastic-based solutions, or at a minimum, less plastic components without compromising the quality of your operations? Run a project to scan your network, make changes and quantify your impact.

d.???Design engineers: Audit your existing product, packaging and display portfolio and look for opportunities. Can you design reusable displays? Can you reduce the amount of plastic or eliminate it and partner with your commercial teams to run tests? Do you have good examples within your portfolio than can be replicated across the rest of the portfolio? Measure potential impact, quantify and track results.

e.???IS/IT teams: Can you find innovative ways to streamline data collection, measurement of potential and results across the organization? Your teams can provide awareness and visibility that can sometimes unlock transformational initiatives.

f.??Finance teams: Finance teams can play a pivotal role in the success of plastic reduction initiatives. While some plastic reduction initiatives by design might result in a net financial savings through simplification, replacing plastic is often going to come at a cost because plastic is very cheap. The finance team is the go-to team when you’ve found a solution that comes at a cost, and finance can help fund your changes from within. This is important because as we discussed, economic hurdles are the leading cause for continued and growing plastic usage across consumer applications.

The list can go on and on, and if we reflect deeply enough, we’ll realize that everyone has a role to play. Whether we’re in HR, office management, transportation, sales or marketing, there’s something that can be done to make progress if we take a step back to reflect and act, especially if we rally support from across the organization.

Often, the most innovative solutions are a result of a diverse team of different disciplines coming together to reimagine the future and making that future a reality.

Final Thoughts

If you’ve made it to this point of the article, thank you, and I hope that you’ve learned a few things that might inspire you to make a difference.

In the time you’ve spent reading this article, more than 12 million plastic bottles were produced, 96 million plastic bags were used once, and much more, and more than 90% of it will forever stay in the environment.

I remain hopeful that the future will be better. As fossil fuels take the spotlight of climate change activism, government support programs and private enterprise continue to drive an expansion in cleaner energy production, and sustainable energy will play an important role in the acceleration of plastic alternatives: it’s going to become cheaper to produce and transport plastic alternatives, reducing the economic hurdles to a more serious transition.

I am also hopeful that more voices and minds will come together to produce technological breakthroughs that will help us transition.

Most importantly, I am hopeful because younger generations are more aware of our environmental challenges, they are more values driven, and they are more willing to make economic decisions that are aligned with their values. Businesses know this, and will have to adapt.

As a CPG professional with ambitions of making a difference, I invite my peers and everyone else to join me in reflecting on the role we can play, and to join a growing community of people who dream of a more sustainable future.?

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Important References:

• Study of Plastic and its benefits by National Library of Medicine: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2873019/#:~:text=They%20have%20a%20high%20strength,plastics%20are%20very%20resource%20efficient.
• Great Overview of Plastic Contributors: https://ourworldindata.org/plastic-pollution
• UN Environment Program: https://www.unep.org/interactives/beat-plastic-pollution/#:~:text=Today%2C%20we%20produce%20about%20300,of%20the%20entire%20human%20population.
• Brand Audit Report by Break Free from Plastic: https://www.breakfreefromplastic.org/wp-content/uploads/2020/12/BFFP-2020-Brand-Audit-Report.pdf
• Greenpeace CPG Audit: https://www.greenpeace.org/international/publication/19007/a-crisis-of-convenience-the-corporations-behind-the-plastics-pollution-pandemic/
• Talking Trash: A Guide to Corporate False Solutions: https://talking-trash.com/wp-content/uploads/2020/09/TalkingTrash_FullReport.pdf
• Federally Supported Innovations: https://www2.itif.org/2014-federally-supported-innovations.pdf
• Scientific American on Plastic in Marine Animals: https://www.scientificamerican.com/article/from-fish-to-humans-a-microplastic-invasion-may-be-taking-a-toll/
• Statista Plastic Facts: https://www.statista.com/topics/5127/plastic-waste-in-the-united-states/#topicHeader__wrapper

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