1. Understanding FMCG Litter Understanding Fast Moving Consumer Goods (FMCG) Litter Dr Brett Carroll, Environment Manager, Nestle Peter Shmigel, Director, Nolan-ITU Leading on Litter Conference May 2004 Melbourne, Victoria

2. Understanding FMCG Litter Todays Presentation Explain Nestles reasons for involvement in littering issue Outline path that Nestle is following Overview research outcomes by Nolan-ITU for Nestle Introduce a model for prioritisation of FMCG litter Comments on improving littering management

3. Understanding FMCG Litter Nestlé - Background Founded in 1866 in Switzerland - largest Food and Beverage company in the world Factories or operations in almost every country on earth Set up business in Australia in 1908 and now 2nd or 3rd largest F&B company in Australia DID YOU KNOW? - MILO was a uniquely Australian invention in 1934, now sold in over 30 countries worldwide

4. Understanding FMCG Litter Nestlé in Australia

5. Understanding FMCG Litter Market Background Fast moving consumer goods (FMCG): –purchased from retail for immediate consumption –consumer: low cost, low commitment, frequent purchases –industry: high volume, low margin Nestle FMCGs: confectionery, yoghurt, ice cream, and beverages Changing demographics –smaller households –more away-from-home consumption –smaller, convenience oriented packs

6. Understanding FMCG Litter Nestle Reasons for Involvement Social / market factors leading to higher probability of littering of FMCGs Corporate citizenship and environmental management goals National Packaging Covenant participation Broadening of Nestles environmental management program from internal operations focus to product life cycle Risk management: public policy, reputation, brand

7. Understanding FMCG Litter Nestle Pathway 1. Better understanding of scope and nature of littering of FMCGs –Whats the size and scale of the problem? –What currently works in managing it? 2. Open dialogue and co-operation –Australian Food & Grocery Council Enviro Committee –anti-littering stakeholders, including VLAA 3. Implementation actions - some still being identified - Eco-Design Guidelines (in Covenant Action Plan)

8. Understanding FMCG Litter Scoping the Problem Nestle engaged Nolan-ITU: conduct desktop review of existing litter data generate preliminary estimate of Nestlé products in litter stream examine quality of existing litter data on food and grocery products prioritise litter items outline current anti-littering initiatives

10. Understanding FMCG Litter Process Determine value of FMCGs (industry data) Determine value of consumed away-from-home (AFGC estimate) Assign $2 per item (Nolan-ITU assumption) Determine potential litter items (CCC/BIEC data) Estimate # of FMCG litter items (KABC data) Estimate % of Nestle litter items (industry data) Prioritise Nestle litter items by significance (Nolan-ITU methodology)

12. FMCG in Australian litter stream

13. REMAINING 64% 963 million littered units FMCG 33% 496 million littered units NESTLE 3% 50 million littered units Nestle products as proportion / # in litter stream

14. Understanding FMCG Litter Data Characteristics No national count since 1996 Previous to today, no public estimate of total size of litter stream or actual % of FMCGs in litter stream Brand names generally unrecorded Inconsistent recording of packaging types Geographical dispersion not well established

15. Understanding FMCG Litter Process - another way of thinking Determine potential litter items (2003 KESAB) –Extrapolate number of equivalent litter collection sites across Australia –Multiply by average number of items collected per site –Multiply from a quarterly to a yearly equivalent Est. size of total litter stream = 622 m. items Apply estimated 23% of FMCG litter items (2003 KESAB) –account for differences in beverages due to CDL Est. size of FMCG litter stream = 141 m. items

16. Understanding FMCG Litter FMCG Litter: How Significant? Major advances in understanding factors that contribute to littering Less understanding of actual impact of litter (with exception of some work on direct financial cost of management) Critical to estimate impacts in order to guide program priorities

17. Understanding FMCG Litter Direct Litter Indicator (DLI) Indicates the immediate, objective and quantifiable aspects associated with litter from a packaging type –Area (m2) – Maximum area of ground covered by FMCGs littered items –Persistence (years) – Estimated amount of time litter remains in the environment NUMBER OF LITTERED ITEMS X AREA X PERSISTENCE = DIRECT LITTER INDICATOR

18. Understanding FMCG Litter Direct Litter Indicator (DLI) Results for key Nestle items: –Confectionery wrappers = 7.86 –Ice cream wrappers = 2.89 –Yogurt containers = 0.17 –Other beverage bottles = 0.06 –Ice cream sticks = 0.02 –Bottle tops = 0.0036

19. Understanding FMCG Litter Cumulative Litter Indicator (CLI) Adds the dimensions of: –Environmental impact - in terms of ecosystem impact (primarily impacts on wildlife) and human toxicology (through emissions to water, air and soil); –Risk Level – in terms of the likelihood and severity of regulatory intervention and brand reputation damage. DIRECT LITTER INDICATOR X ENVIRONMENTAL IMPACT X RISK LEVEL = CUMULATIVE LITTER INDICATOR

20. Understanding FMCG Litter CLI Example - Confectionery Wrapper DLI = 7.86 Environmental impact = 2 ecosystem impact = 1 and human toxicity = 1 Risk level = 2 Regulation = 1 and reputation = 1 CLI = 7.86 x 2 x 2 CLI = 31.44

21. Understanding FMCG Litter Cumulative Litter Indicator (CLI) (cont) Results for key Nestle items: –Confectionery wrappers = 31.44 –Ice cream wrappers = 8.67 –Yogurt containers = 0.17 –Other beverage bottles = 0.18 –Ice cream sticks = 0.02 –Bottle tops = 0.01

22. Understanding FMCG Litter Comparative example Beverage containers –Amount = 28 million –Area = 0.13m –Persistence = 5y DLI = 17.90 –Enviro impact = 2 Ecosystem impact=1 Human impact = 1 –Risk impact = 3 Regulation = 1.5 Reputation = 1.5 CLI = 107.4 Confectionery wrappers –Amount = 28 million –Area = 0.23m –Persistence = 1y DLI = 6.44 –Enviro impact = 2 Ecosystem impact =1 Human impact = 1 –Risk impact = 2 Regulation = 1 Reputation = 1 CLI = 25.76

23. Understanding FMCG Litter Insights Attempting to quantify problem creates impetus for action by company, industry & stakeholders Prioritisation of items enables better targeting of efforts Strong need for broadly accepted, consistent and official litter measurement methodologies Collaborative approaches - on VLAA model - necessary