In recent years, the CPG industry has faced scrutiny regarding its packaging practices, particularly in the context of sustainability commitments. The Ellen MacArthur Foundation’s New Plastics Economy Global Commitment, launched in 2018, catalyzed industrywide pledges to achieve 100% recyclable, compostable, or reusable packaging by 2025, reduce reliance on virgin plastics, and increase the use of postconsumer recycled content. However, by 2022, little progress had been made toward commitments, with many brands struggling to find a path to meet their targets. Now, with 2025 around the corner, several companies have started reassessing their strategies, adjusting timelines and revising objectives to be more realistic and to better align with the evolving packaging landscape.
To understand the factors driving these revised targets and anticipate the industry’s cautious approach moving forward, Lux analyzed activities in the context of three specific goals — increasing packaging circularity, increasing postconsumer content in plastic packaging, and minimizing the use of virgin plastics.
Goal #1: Increasing packaging circularity
When it comes to packaging circularity, companies are placing greater emphasis on recyclability over compostability or reusability. To meet recyclability commitments, companies are phasing out materials that hinder recyclability, simplifying multilayer film structures by eliminating features like metallization, and adopting new labeling strategies. Among leading CPG companies, an average of 60% of packaging is recyclable, compostable, or reusable. But the breakdown shows that about 55% of packaging was recyclable, while reusable packaging lagged at 3.5%, and compostable packaging was even lower, at just 0.1%, in 2022.
Several companies, including Danone, Edgewell, Johnson & Johnson, and Procter & Gamble (P&G), have extended their timelines from 2025 to 2030 to achieve fully circular product portfolios. Others, such as Church & Dwight, Ferrero, and Nestlé, have adjusted their circularity goals from 100% to 90%–95%, acknowledging that some items cannot be transitioned to circular formats by 2025. The challenges behind these adjustments are tied to the difficulty of replacing certain materials while maintaining performance and protection, as well as the lack of infrastructure for collecting, sorting, and recycling specific types of packaging, such as flexible films and pouches. These challenges also affect compostable packaging. For example, the lack of infrastructure to manage its end of life (EoL) and the difficulty in ensuring the proper conditions at facilities to fully compost packaging waste are leading some brands to drop their compostability targets. P&G, for instance, has removed packaging compostability from its packaging goals, now focusing solely on recyclability and reusability. Companies like Beiersdorf and Henkel are taking similar steps.
Goal #2: Increasing postconsumer content in plastic packaging
CPG brands are increasingly using recycled plastic, largely driven by regulations mandating recycled content. According to the Ellen MacArthur Foundation, signatories have seen a 1.8% annual increase in postconsumer recycled (PCR) plastic use since 2019. However, virgin plastic consumption has remained unchanged from 2018 levels, indicating that overall use of plastic packaging — both virgin and recycled — continues to go up. Earlier this year, demand for recycled materials dipped on an oversupply of lower-cost virgin plastics, but this demand is expected to recover as regulatory deadlines approach.
Companies have started using recycled high-density polyethylene (PE) and recycled polyethylene terephthalate (rPET) across different product portfolios, especially in home care and personal care, where food-grade recycled plastic isn’t required (although implementation for the food and beverage sectors also exists). Despite PET being the most available recycled plastic, companies like Coca-Cola and PepsiCo are finding it difficult to secure enough postconsumer rPET to meet their PCR content targets across all packaging. In response, CPG companies like Coca-Cola, Danone, P&G, and Keurig Dr Pepper have started investing in recycling infrastructure and technologies to drive more capacity of recycled plastics. Additionally, many CPG companies are participating in initiatives like NextLoopp, The Recycling Partnership, and HolyGrail 2.0 to enhance packaging recyclability. However, when it comes to recycling technology innovations, CPG and packaging companies tend to play a downstream role, primarily testing recycled materials as drop-in feedstock for their existing production lines rather than actively driving recycling innovations.
Goal #3: Minimizing the use of virgin plastics
Some brands are updating their commitments to be more conservative. For example, Unilever in 2019 committed to reducing its virgin plastic use by 50% by 2025 and now plans to reduce its use of virgin plastic by 30% by 2026 and 40% by 2028. Overall, brands are reducing the use of virgin plastic through a combination of material substitution, lightweighting, and direct-elimination strategies and even using mass-balanced plastics.
Lightweighting techniques have been shown to effectively reduce plastic usage by making packaging thinner while maintaining the necessary mechanical and barrier performance properties. Companies like Nestlé and PepsiCo have optimized bottle and container designs by thinning their plastic walls. Coca-Cola has specifically employed ultralightweight blow-molding technology to create bottles that use up to 25% less plastic, allowing the company to reduce virgin plastic use by 75,000 tonne in 2023 compared with 2022. Still, several companies like Nestlé, Mondelēz, and L’Oréal are looking to shift to fiber-based packaging across various product categories. Many brands are investing in paper bottles and molded pulp containers by partnering with companies like Paboco, PulPac, Pulpex, and Yangi. In addition to branching out to paper, brands are working to reduce virgin plastic use by exploring and investing in bioplastics like polyhydroxyalkanoates and algae-based materials. While most of the progress in minimizing virgin plastic use is driven by material substitution or lightweighting, direct-elimination efforts are also growing. Nestlé, for example, eliminated 570 tonne of plastic by removing unnecessary overwrap from nutrition cartons. Lastly, some companies are exploring mass-balanced plastics, but adoption remains limited due to uncertainty about whether regulators will recognize these materials as recycled content.
What to expect by 2030
Looking forward to 2030, more brands will reconsider and reassess their packaging circularity strategies and timelines, specifically considering the current availability of EoL infrastructure and performance deficits of compostable packaging materials. To meet recycled-content mandates, companies will increasingly pursue partnerships or ownership of recycled-plastic supplies. However, due to the current scarcity of suitable PCR plastics, especially for flexible food-contact packaging, many brands may turn to alternative materials like paper, where using recycled fibers is less limiting. Switching to nonplastic materials, such as paper or natural polymers, may seem like an attractive solution for brands and could enhance the public perception of a more circular portfolio. However, these solutions are still in early development, and there are challenges in understanding how to economically integrate them into the industry. In the meantime, companies with significant plastic packaging operations, where transitioning to alternative materials is difficult, are likely to adopt plastic lightweighting to reduce virgin plastic use while maintaining performance standards.
Moving forward, as brands advance toward their packaging goals and reassess what is achievable, companies with packaging-focused products or businesses should consider the following:
- Although sustainability commitments are voluntary and come with no formal penalties for failure, companies must demonstrate progress, as their efforts to meet their circularity goals will be subject to intense public and media scrutiny. As a result, expect brands to be much more strategic in their circularity goals and progressively shift deadlines to 2030–2035.
- Simple changes, such as removing unnecessary wrapping or thinning out packaging walls, are often more effective than announcing the intent to pilot 100% bio-PE packaging, which, while drawing media attention, offers less immediate impact.
- Despite policies and regulations varying significantly across regions, recycled plastic is considered the safest bet for sustainable packaging, as there’s a strong global consensus supporting its use.
For more information on specific packaging commitments and the implications these commitments will have on packaging innovation, please reach out!