Cover Sustainability in PLs: raw materials, emissions and community, the must-haves for brands

Sustainability in PLs raw materials, EMISSIONS and community,

the must-haves for brands

In order to implement an effective and multi-sector sustainability policy, however, it is essential for brands and co-packers to share common goals.

“Today, in Italy, as well as in the rest of Europe, sustainability is the meeting point between supply and demand," says Emanuele Plata, co-founder and past president of Plef. "Private label products represent an aspect of this theme when their added value is based on transparency, quality, traceability, correct information regarding disposal methods and energy (or ecological) footprint. In order to implement an effective and multi-sector sustainability policy, however, it is essential that brands and co-packers have common intentions, failing which the brand seeks other partners through scouting processes."

u PL sustainable packaging: research by Osservatorio Immagino In June 2021, a study published by institute ‘Osservatorio Immagino GS1 Italy’, in its tenth edition, examined a basket of 125 thousand products, 37 thousand of which were PLs. The institute grouped the ‘sustainable’ claims under 4 thematic macro-areas: sustainable resource management, sustainable agriculture and breeding, social responsibility and respect for animals. However, unlike what happened for industrial products, PL products dominated one focus in particular, that of packaging sustainability. "We made this choice to surf the wave of current events - explains Samanta Correale, Research Manager of Osservatorio Immagino - from January 1, 2023, in fact, European obligations regarding environmental labeling for packaging will come into force in Italy."

Source: Data published in issue no. 2 of 2021, Osservatorio Immagino

CARREFOUR'S RECIPE: SUPPLY CHAIN PACT, NO WASTE AND VALUE TO SPECIALITY

This is the case of the Food Transition Weeks in November 2021, when Carrefour Italia chose its new suppliers and signed a ‘Pact of Commitment and Co-Responsibility’ with them to implement sustainability policies, as well as the enhancement of local for the following years, as it had already done in September with the producers of Parmigiano Reggiano Dop. In general, Carrefour's commitment to a lower socio-environmental impact has focused on several issues: from the need to save about 20 thousand tons of packaging by 2025 by using eco-friendly packaging, to reducing by 30% by 2030 the CO2 emissions related to the purchase of goods and services, passing through the age-old issue of food waste. "We were the first large-scale distribution company to collaborate with ‘Too Good To Go’ in 2019 - recall from Carrefour- in 2021 we signed with them the ‘Pact against waste’, which allowed us to save 260 thousand ‘magic boxes’ of food close to expiry". From the point of view of sustainability and promotion of the territory, the brand has also collaborated with public bodies: in 2021, synergies were established with the Piedmont and Lombardy regions to promote regional products certified as "DOP" and "IGP" (in the case of Lombardy, also "PAT" and "Fdai"). Now the aim is to replicate the experience with other Italian regions. Carrefour is persuaded that, given the choices of each corporate governance, whose economic return is far from immediate, consumers' indications play a pivotal role.

Carrefour: packaging targets -20 thousand tons of ‘classic’ packaging in PL by 2025 -30% of CO2 by 2030

CLICK & WATCH

u PL with ‘talking’ packaging Packaging recyclability is one of the most widespread claims on PL products in largescale distribution. If in absolute terms, it covers 54.4% of references, i.e. +7.4% compared to the previous survey, when it comes to products sold in hypermarkets and supermarkets the percentage reaches 77.3% (with only 22.7% without any indication on pack sustainability), against a share of 58.3% of large-scale industry products. "If we look at some industries, such as that of beverages, labeled products depend, among other factors, also on the choice of materials that bottles are made with. - underlines Samanta Correale - Think about glass: it is a recyclable material par excellence, so today very few companies use labels with disposal and recycling indications, but we'll see what the legislation has in store for us in the future".

Source: Data published in issue 2 of 2021, Osservatorio Immagino

MORE RECYCLING AND FEWER EMISSIONS AT LIDL, WHERE 80% IS PRIVATE LABEL

"Adopting sustainable policies not only benefits the environment and society, but also contributes to the long-term success of the company. However, we need to be prepared for continuous renewal. - says Alessia Bonifazi, Communication and Csr Manager of Lidl, the discount store that has an offer composed by 80% of PL products and that has chosen as claim ‘On the way to tomorrow’ - we have decided to act on three macro areas: environment and climate, conscious consumption (and healthy food), community and territory we live." In 2021, the company launched a line of sportswear ‘Crivit Ocean Bound’ made with plastic collected from beaches. In the same year, it created a line of household products with polymers 100% recycled by the company PreZero, part of the same Schwarz Group, which can be considered as a virtuous example of intergroup circular economy. The goal is +25% recycled plastic materials in private label packaging by the end of 2025. As for the assortment, Lidl has recently expanded the range of sustainable products under the ‘Vemondo’ brand, by further enriching its already numerous certified references (Bio, Fairtrade to name a few), its regional specialties and the so-called ‘Next Level Burger’, 100% of vegetable origin, whose production cycle releases 91% fewer emissions than a classic meat burger.

THERE’S STRENGTH IN ALLIANCES: COOP'S INCLUSIVE, CROSS-CUTTING VISION

For Coop, sustainability is an all-embracing concept that is not limited to environmental protection alone. The brand can boast supply relationships with an average duration of 30 years and very few defections. "It is a sign - says Managing Director Maura Latini - that producers are seen as true allies with whom to share a path and a vision. Certainly, this kind of policies require a radical cultural change and investments, some of them substantial. For example, in newly designed livestock farms, this means enlarging spaces, using straw and bedding, introducing video surveillance systems, and balancing the livestock's diet plans." The topics of decarbonization and plastic reduction were certainly mainstream in 2021. Already back in 2013, Coop eliminated microplastics from branded cosmetics, toothpastes and detergents with its ‘Vivi Verde’ line. In a three year span, that is since joining the Pledging Campaign, the company has saved 8,500 tons of virgin plastic by replacing it with recycled plastic. This switch on branded mineral water bottles alone, in June 2021, in fact, meant saving 1,000 tons of plastic. Moreover, the brand has replaced, where possible, diesel-powered trucks with LNG-powered vehicles, and optimizes loads by making the vehicles travel as full as possible.

Lidl: figures 80% private label products Target +25% recycled plastic in PL by the end of 2025.

Coop: solid relationships and results 30 years average duration of supply relationships -1000 tons of virgin plastic on PL products

"When it comes to logistics - recalls Plata - a worth-mentioning case is that of Conad that, in order to drastically cut the number of routes, has converged suppliers on 4 national hubs, from which vehicles of the brand depart to reach regional industrial distribution centers (CeDi)". The commitment to protect the environment and resources is an integral part of the Bologna-based brand's strategy, entitled ‘Sosteniamo il futuro’ (Sustaining the future). In Conad, sustainability on PL products equaled 4.8 billion of the 2021 turnover, totaled in over 3 thousand stores throughout Italy. Today, 70% of the over 5,000 PL products have sustainable packaging. The brand, in fact, has replaced the packaging of virgin pet with others made of 100% recycled pet, with an eco-design operation recognized by Conai (the National Packaging Consortium), which led to estimated savings of over 13 million bottles of virgin plastic in two years. In addition, Conad has received the Conai ‘Best Ideas award’ for the sign to be displayed at points of sale to inform customers how to dispose of pre-wrapped products used for butchery, delicatessen, fishmonger and bakery products.

Conad: sustainability on PL products 4.8 billion of total turnover 2021 70% of over 5 thousand PL products have sustainable packaging

ALDI'S COMMITMENT TO THE ENVIRONMENT AND SUSTAINABLE PURCHASING POLICIES

"When it comes to energy footprint- adds the former Plef President- "We cannot help but mention Aldi's commitment, which has recently opened stores in the province of Brescia with almost zero emissions. This was possible thanks to the international 2030 ‘Zero Carbon’ strategy, but in particular to the ‘Today for Tomorrow’ program of the Aldi Italia division. In fact, the company is committed to ensuring maximum traceability and transparency throughout the supply chain; it requires the adoption of fair and decent business practices so that the assortment is socially, as well as environmentally, sustainable. Since 2016, thanks to the Fairtrade project, Aldi Italia has been supporting 16 cooperatives of coffee producers in Honduras, providing training in farm management, human rights and farming practices. With regard to sustainable purchasing policies for fish and some commodities, such as cocoa, coffee, tea, wood and cotton, Aldi Sud Group has set out some guidelines for PL products, which are binding for both the purchasing department and suppliers. The discount store also offers berries in packaging made entirely from plastic collected in areas affected by climate disasters, thanks to the collaboration of Plastic Bank. Moreover, fresh eggs are sold in 100% paper pulp packs ( 70%-at least-recycled).

Aldi: environmental and social sustainability Pdv of Moniga del Garda (Bs) emissions almost 0 16 farming communities supported in Honduras

Esselunga and PL strategies until 2025

Until 2025: ‘Pesca sostenibile’ certificate for fresh and frozen fish ‘Cacao Sostenibile’ beans 100% guaranteed fair trade with blockchain 1.135 million euros to support farmers in Togo

Despar e la sostenibilità 3.300 i prodotti Mdd su cui si sperimenta la sostenibilità

TOWARDS ESSELUNGA'S 2025: CERTIFIED PRODUCTS, BLOCKCHAIN AND SOCIAL SUSTAINABILITY

All the fourth range packaging of Esselunga's Bio line is also fully compostable and biodegradable, another brand that has chosen to ‘diversify its portfolio’ of sustainable actions. After making its honey a traceable and certified supply chain product, in 2021, Esselunga began converting its milk, both fresh and uht, into a ‘Benessere Animale’ (Animal wellbeing) certified product. Esselunga looks at 2025 with the so-called ‘Sustainability Strategy Plan’. One of the objectives is the ‘Pesca Sostenibile’ (Sustainable Fishing) label for 100% of the fresh products of the Esselunga and Naturama chains obtained from fish farmed in Italy, as well as 100% of the brand's packaged, frozen and long-life fish products. The Pioltello-based company has expanded the use of eggs from free-range hens for PL products, with the goal of reaching 100% by 2025. Then, there is the ‘Sustainable Cocoa’ project launched in 2019. Within the next three years, this project will result in the use of private label chocolate, 100% guaranteed fairtrade beans, tracked with blockchain technology from the field to the finished product. This initiative was created not only to ensure the transparency of the supply chain, but also to support the communities of cocoa farmers in Togo. The total investment will amount to 1.135 million euros over five years, 575 thousand euros of which were allocated by Esselunga and 560 thousand euros came from customers' Fidaty points (frequent customer card).

DESPAR RETHINKS PL PACKAGING, BUT THE REAL CHALLENGE IS THE RIGHT PRICE

"As Despar Italy headquarters, we are working closely with the suppliers of our 3,300 branded products, who, in turn, are developing sustainability policies,"- explains Michela Cocchi, PL Brand Manager of Despar Italy. So far, the 2021 commitment of the brand has mainly translated into the greenest restyling of many branded product packaging. "For example, we have adopted recyclable paper trays for cold cuts and packaging made of FSC-certified paper; we have eliminated packaging to be disposed of in undifferentiated waste in favor of packaging to be stored in plastic, which is also 100% recyclable. Sustainability policies are undoubtedly a worthy cause and have to be doggedly pursued. However, they do have a critical impact on the final selling price - concludes Cocchi - the consumer asks for more sustainable products but usually doesn’t want to bear the cost. So, the real challenge is to find the right balance."

u PL packs win silver medal for label indications As for the share of ‘talking’ products, but also actually recyclable (100% or mostly), for private label products it amounts to 85.4% of total surveys. It’s a good silver medal that is slightly different from the leadership that isn’t so far from the top 20 of the industry, with almost 90% of products. Followers and other smaller FMCG suppliers, on the other hand, come in at 80%. These data, beyond the absolute numbers, confirm the strength of private labels in conveying sustainability information, particularly that of packaging, and the tendency not to sit on their laurels in the constant comparison with the brand of large-scale distribution.

Source: Data published in issue 2 of 2021, Osservatorio Immagino

Economic sustainability at Crai 400 references selected from among the PL products by ‘Salva spesa’

THE ISSUE WITH PRICES AND CRAI’S INITIATIVE

"In fact, the pricing policy should reflect the minimization of negative external factors," comments Emanuele Plata, "something that doesn't really go along with maximum margin or convenience. Experimented in the late 1990s and early 2000s, one way of reconciling these two needs was bulk sales, which didn’t have the desired success and remained a niche. Some instead adopted everyday low prices to avoid excessive storage." February 1, 2022, Gruppo Crai launched ‘Salva spesa’. In the context of this initiative, every three months, in turn an offer of references selected from the main 400 Crai-branded products participating is proposed. The basket includes typical everyday shopping products, whose prices have been blocked for the entire period of the initiative. "This initiative is the natural continuation of the path we undertook some years ago - affirms Mario La Viola, Director of Marketing, Format, Network and Development of Gruppo Crai. actions such as this take on even more value at a time characterized by rising raw material prices, the explosion of energy and transport costs."l

Maria Teresa Giannini, Professional Journalist specialized in Large-scale Distribution.