Nestlé has made a $30-million investment in the Closed Loop Leadership Fund, the private equity arm of circular-economy investment firm Closed Loop Partners to lead the shift from virgin plastics to the use of food-grade recycled plastics in the United States. This investment is the first to utilize Nestlé’s packaging venture fund established earlier this year, part of the company’s overall 2 billon Swiss franc ($2.1 billion) commitment to accelerate the development of innovative sustainable packaging solutions.
“This investment is one of many solutions we are exploring to address the global plastic waste challenge,” said Véronique Cremades-Mathis, Global Head of Sustainable Packaging. “It will help create a more sustainable recycling system and, at the same time, assist us in achieving our commitment to reduce our use of virgin plastics by one-third by 2025. This is particularly important as increasing the use of recycled plastics could substantially reduce the environmental impact of our packaging,” said Cremades-Mathis.
The Closed Loop Leadership Fund was created to acquire companies and build circular supply chains. It invests in companies that aim to increase recycling rates in the United States and keep valuable materials within the packaging supply chain by integrating and improving access, collection, sortation, and processing, Nestlé explained.
According to the US Environmental Protection Agency, the US recycling rate for all materials, including plastics, is around 25%. Recycling rates, however, can vary significantly by material type. This is due in part to the different ability of municipal recycling systems to accept and process materials.
Steve Presley, Chairman & CEO of Nestlé USA, commented: “It is important that we do our part to help keep recyclable materials out of landfills and increase US recycling rates, and this investment is a significant move in that direction. It is also a critical step in our effort to secure access to high-quality, food-grade recycled plastics, which can be converted into new packaging material for use across our product portfolio.”
Closing the loop on valuable materials
Through its investment in the Closed Loop Leadership Fund, Nestlé will have access to recycled plastics feedstock processed by companies in which the fund invests in order to achieve greater volumes of food-grade recycled plastics for its packaging. Ron Gonen, CEO of Closed Loop Partners, stated, “In addition to the investment, Nestlé has committed to create an end-market for the food-grade recycled plastics processed through the companies we acquire. This will enable us to fully close the loop on valuable materials.”
Nestlé claims the investment has the potential to impact a variety of brands in its US portfolio. Nestlé uses PET in bottles for Coffeemate and Starbucks creamers; in trays for Stouffer’s entrees; and across its bottled-water portfolio. Since 2019, the company has doubled the amount of rPET used across its still water portfolio in the United States to 16.5%. The company uses PE in rigid canisters of Nesquik powder, and PP in Lean Cuisine trays and the new Gerber Incredipouch, a first-of-its-kind, single-material baby-food pouch designed to increase recycling value. Flexible films appear in a variety of packaging formats, including bags of Nestlé Toll House morsels and the wraps on refrigerated cookie dough.
This announcement builds on Nestlé Waters North America’s $6 million investment in Closed Loop Partners’ Infrastructure Fund, which finances recycling programs and infrastructure improvements to create a circular economy in the United States.