How Unilever is redrawing its packaging strategy

 

Unilever has not u-turned on all of its plastic commitments, though. It has kept its 2025 deadlines for collecting and processing plastic, and for increasing the amount of recycled plastic in its packaging to 25%. Costa claims it is “firmly on track” to meet the latter, having already hit 22% recycled plastic across its global plastic packaging portfolio.

A senior environmental expert believes less can be more when it comes to sustainability targets, noting that the number of KPIs Unilever has set has reduced from 80 – “which was bonkers” – to just 16. Also telling is the fact that “vague Pollyanna” promises have been replaced with more specific measurements. “What I like about their new targets is there’s no wriggle room. They’re very precise, and furthermore, completely compatible with business objectives, which makes me think they’ll get them,” they say.

“What I like about their new targets is there’s no wriggle room”

Paul Jenkins, MD of packaging consultancy The Pack agrees. “When people don’t really know what they’re doing, they tend to give dates that end in ‘nought’ or ‘five’. But when it’s 2026, and 2028, I think they’re confident.”

That specificity is even more important in the wake of more onerous legislative pressure from investors as well as regulators that has been introduced in recent years in many countries, not least in the UK, where pointedly the Competition & Markets Authority (CMA) announced in December it was investigating Unilever due to concerns the manufacturer was “overstating” the green credentials of its products.

While Unilever has declined to comment on the progress of the ongoing CMA investigation, Mark Lapping, CEO of Aquapak Polymers, agrees that its open communication about the progress of its sustainability goals is the best course of action for any blue-chip business. “I applaud [Unilever’s] honesty, because it helps raise some of the difficult questions that surround why these targets cannot be met,” he says. “Managing expectations for consumers, shareholders and employees is important. They’re acknowledging they can do better, but also scoping the size of the challenge.”

Persil

Unilever unveiled Persil laundry capsules intended specifically for cold, short-cycle washes in 2022. They hit UK shelves last year, packaged in a child-proof cardboard box that took “years of development”. The carton was claimed to “lock out moisture” better than the old plastic packaging, preventing the capsules from sticking to each other.

One of the biggest challenges in setting targets has been an overreliance on other stakeholders. And particularly governments. As the senior environmental expert says, “it needed the whole village” for its old strategy to work. “And you can call it naive to make a strategy that needs everything to align but we did have the UK Plastics Pact [launched in 2018] and [Michael] Gove [the then Defra secretary of state] said he would do his bit. But as we know the previous government has failed to put in place the necessary infrastructure in film, flexible packaging and other recycling, or rules on things like EPR.”

In some situations Unilever has developed recycling solutions of its own. Lapping points to Unilever’s work with the Alibaba Group to launch a closed-loop plastic recycling system in China. In 2021, it installed 20 recycling machines in offices and community spaces in Shanghai and Hangzhou. The machines used AI to identify which type of plastic was deposited before sorting and storing it for recycling. “The technology is there, we just need to use it,” he says.

And while Unilever could have committed “more resource” to material technologies, “I sympathise because there are a lot of technologies that exaggerate their claims, and they have to work through them.”

Pot Noodle

Unilever trialled a paper pack for Pot Noodle in Tesco last summer. The result of three years of development, a run of 500,000 paper pots launched into the retailer. They featured a single layer of plastic film to provide barrier protection, freshness and rigidity when exposed to boiling water. Unilever claimed this did not affect their recyclability.

Slow shoppers

There are other barriers downstream too. Arguably “you could blame shoppers” for Unilever’s slow progress on plastics, says Paul Foulkes-Arellano, founder of circular innovation consultancy Circuthon. He points to the various supermarket refill trials of recent years, which “have been a massive failure every time”.

To date, Unilever has carried out over 50 reuse and refill pilots globally. One such trial, launched in 2020 and expanded in 2021, saw Unilever sell stainless steel bottles pre-filled with products from its Persil, Simple, Radox and Alberto Balsam ranges at selected Asda and Co-op stores in the UK. These bottles could then be returned to store for cleaning and collection.

Colman’s

Colman’s unveiled recyclable paper sachets for its Meal Makers and Sauce ranges in 2021. They were borne out of a year-long partnership between Unilever and sustainable packaging firm Mondi. Unilever said it had conducted “extensive line trials” at its pilot plants, despite having limited access to production facilities amid the Covid-19 pandemic.

At the time of the pilot, Unilever UK & Ireland general manager Sebastian Munden claimed pre-fills “could be a game-changer in our ambitions to halve our use of virgin plastic by 2025”. However, three years on, they still haven’t gained mainstream traction.

Foulkes-Arellano argues shoppers are too stuck in their ways to embrace in-store refill schemes. “The shopper in 2024 is not going to suddenly go: ‘Oh, you know what? Let’s have less convenience.’”

Jenkins also believes refill pilot schemes have not had enough support from retailers, because they’re deemed “too costly”, says Jenkins. And the lower the investment, the less likely you are to see results.

Turning trials into tipping points

The senior environmental expert takes a different view. “You need to distinguish between pre-fill and refill and between wet and dry. We’ve not seen the perfect solutions yet but we have seen the beginnings of a series of solutions that need to be torture tested. Because these are trials retailers are leaving the existing solutions in place. At what point can we get enough players to pick a few categories and replace them entirely, while maintaining competition? That will be the tipping point, and it will take work with the CMA too.”

While pre-fill and refill schemes are still in test and learn mode, Unilever has focused on bolstering its use of recycled plastic – and it’s making good progress. However, it’s “becoming significantly more difficult to find materials that meet the expectations of consumers”, admits Unilever global head of packaging excellence & technology Colin Kerr.

Speaking at Rethinking Materials in May, Kerr said Unilever was facing “big challenges on malodour, colour and colour consistency” in recycled plastic, with the cost of materials soaring due to increased demand.

Unilever is “competing with its [rivals] for materials” says Jenkins. “So, you end up having a situation where recycled plastic costs more than virgin plastic.”

Meanwhile Unilever is also experimenting with paper packaging, “thinking about how they can be restructured so they are recyclable and compostable” says Kerr. Colman’s Meal Makers and Sauce sachets moved to paper in 2021, while Persil’s child-proof cardboard capsule boxes, hit UK shelves in 2023, following “years of development”. Last summer, Unilever trialled a paper pack for Pot Noodle in Tesco. That development took “over three years”, he adds.

Foulkes-Arellano says such innovations are well overdue and do not warrant praise. “Unilever takes years to do a pilot. They’re not agile – they’re stuck in the mud,” he says.

Pilot schemes also offer big manufacturers the opportunity to row back on progress, argues Foulkes-Arellano. “If you’re a smaller business that has invested in new machinery, new packaging, you can’t afford to fail. Whereas [big multinationals like] Unilever, can step back and say: ‘This didn’t quite meet our expectations. We’re not going to roll it out.’”

The senior environmental source believes these comments reflect a naivety about the speed at which the machines need to work to achieve scale. “You need to put your destination economics into the model. These are public companies; they can’t miss profit targets.”

But that’s precisely why Foulkes-Arellano thinks the revised plastic targets will work. They are “realistic” because “they have to look after their share price”.