The Stockout: Kraft Heinz cleans up its packaging

Kraft Heinz takes another step toward a more sustainable future. In the last edition of The Stockout, I wrote about how Kraft Heinz is testing the company’s first microwavable cup, set to launch sometime during 2021 upon the completion of testing. On Friday, Kraft Heinz announced that it was launching a new eco-friendly sleeve multipack in the United Kingdom. 

Image: The Kraft Heinz Company

This move will eliminate 550 tonnes of plastic on supermarket shelves, Kraft Heinz said. The cardboard packaging that Kraft Heinz will be using is PEFC-certified paperboard and is completely recyclable and sourced from renewable and sustainably managed forests.

“We will continue to explore new and innovative ways of working to reduce our environmental impact wherever possible, while always offering the same great value (and great taste) our consumers know and love,” Kraft Heinz said in a LinkedIn post.

Switching directions to the coffee sphere, Nestlé announced on Thursday that it is expanding its sustainability efforts by further investing in its Nescafé Plan. The Nescafé Plan was created 10 years ago with the goal of improving farmers’ lives along with paving the way for a more sustainable future and enriching rural communities. By 2025, Nescafé expects to have 100% responsibly sourced coffee, which means that it will be able to be traced back to an identifiable farmer group. 

According to a report by Bloomberg, investment in this plan will double in the next decade.

The company previously pledged that by 2025, 100% of its packaging will be recyclable or reusable along with cutting its greenhouse emissions in half by 2030 and hit net zero by 2050

New sustainability efforts are announced almost weekly from CPG companies and are expected to help increase brand loyalty. According to GlobalData’s Recovery Survey, 44% of consumers indicated that their choices were often/always influenced by how ethical/sustainable a product was. 

“According to the same survey, over four out of five (84%) of global respondents claimed that ethical or sustainable production methods are as important or more important than before the pandemic,” GlobalData consumer analyst Ramsey Baghdadi said in a statement after PepsiCo announced its plan of net-zero carbon emissions in its supply chain by 2030

PepsiCo’s senior vice president gives insight into consumer spending habits. Undoubtedly, consumer spending patterns have changed since the COVID-19 pandemic began, especially in e-commerce’s penetration of CPG. 

“It’s hard to imagine but just four years ago CPG companies had only a 1% penetration rate online,” Jeff Swearingen, Pepsico’s senior VP and head of the company’s Demand Accelerator, recently told Chain Store Age. 

Over the past year, it has become clear that online shopping trends have been magnified by the pandemic, but what happens when the pandemic is behind us? 

“Our data shows that despite a drop in visits to physical outlets for grocery shopping during the pandemic, the majority of consumers are craving normality and would prefer to shop in-store, so we expect many consumers to return to the store once this crisis is behind us, with a sustained increase in online grocery shopping as well,” Swearingen said.

I agree with this sentiment, but I believe that CPG companies will benefit tremendously from investing in their online shopping experience. Direct-to-consumer (DTC) has become a major focus for CPG companies due to the need to provide customized products to consumers. PepsiCo has two DTC websites, and, to help better serve its customer base through the pandemic. 

Direct-to-consumer works well when there are outlier events that create a surge in demand such as the COVID-19 pandemic. When traditional retailers suffered stockouts last spring, consumers turned to any outlet they could find to buy their essential goods. DTC tends to struggle more so when high price tag items are involved due to consumers desiring a more hands-on experience for big purchases.