In North America, we are thankful for the wide open spaces and the vastness of the land, you will hear the expression during the election speeches, hopefully you will listen to the speeches. The vastness of the space is a double edged sword – the space allows you to think you will always have lots of space and you do not take care of all of it. The problem of what we do with waste has happened over the years and as garbage dumps have filled up, costs were increased, which means at some point there was a desire among consumers and the public to do something about it. The desire to do something about it and companies doing something means there is a time lag. The reality for companies is to change process takes both time and money, but to change means the extra costs have to passed on to the consumers without them lowering the amount they consume.
Nestle SA is the largest food and beverage companies in the world and has the resources and desire to change some of its packaging. The company recently announced the share of recyclable or reusable packaging has increased to 87% of its products. The other 13% will take another 4 or 5 years of its goal of 2025.
The company has reduced its use of new plastics by a third and is willing to spend up to 2 billion Swiss francs ($2.85 billion) to boost recycled plastics.
Magdi Batato told reporters that packaging plays an essential role in preserving the integrity and safety of our food. At the same time, plastics is a major issue around the world.
Mr. Batato said it was very difficult to give a goal for the usage of paper packaging as there is no one size fits all solution. Plastics will remain a component of packaging, however more of it will be recycled plastic.
Linking to dividend producing stocks, the companies that have been part of the problem are also part of the solution. In reality, when you consider the use of plastics has evolved, much of the reason for using it was the cost component to keep things safe and secure. It does not time to change, but the companies making profits have the ability to move their production lines to use less of the bad stuff and increase their use of the good stuff at the same price point. Companies evolve to do the right thing, unfortunately it is usually not fast enough, but the reasons are related to costs and maintaining margins.
There are more questions than answers, till the next time – to raising questions.