Toward Closing The Loop For Bottled Beverages: Nestle Waters, WM-Green Ops, McDonough Braungart Design Chemistry, Greenopolis

Toward Closing the Loop in the

Bottled Beverage Industry

Andrius Dapkus, Nestlé Waters North America

Paul Ligon, WM-Green Ops, LLC

James Ewell, McDonough Braungart Design Chemistry

Anthony Zolezzi, Greenopolis

Recycling in the U.S.

FACT: Nearly 40% of U.S. households do not have access to curbside recycling1

FACT: The current consumer recycling rate for plastic water bottles is 23.4%2

FACT: 86% of Americans would recycle more if it was easier3

1 Source: American Forest & Paper Association. "2007 AF&PA Community Survey.“

2 Source: National Association for PET Container Resources. “2007 Report on PET Water Bottle Recycling.”

3 Source: Container Recycling Institute 2007

Barriers

• Limited access, convenience and education about recycling

• Consumer mindset that plastic is waste

• Value, supply and lack of producer demand for rPET

• Inconsistencies in government policies

• Need for authenticated “clean stream” of rPET

• Challenges of building rPET market

Our Challenge

Can we create the first closed-loop system for plastic water bottles?

A Unique Collaboration

• Common vision for more effective reuse and recycling of plastic

• Cross-industry collaboration

• Founded on concept of shared responsibility

• Intensive, year-long planning process

Approach

Create a brand and recycling system designed to directly engage consumers in the importance of recycling

•Increase consumer education

•Implement retail-based recycling programs

•Offer consumers an incentive to recycle

•Demonstrate the valuable uses for recycled plastics

•Give consumers opportunities to recycle beyond curbside

•Fully leverage the power of a brand and packaging

•Recapture and recycle as many plastic bottles as produced

•Reduce waste by increasing access and visibility of recycling programs

An important first step toward changing consumer behavior

and increasing U.S. recycling rates

Partner Point of View

• The leader in healthy hydration

• Track record of environmental stewardship

• Recognized the need to address both societal and environmental issues with our stakeholders

Nestlé Waters plays an important societal role, whether ensuring healthy

hydration for an on-the-go culture, serving as a convenient alternative to sugared

beverages, or as a reliable, safe source of water in disasters. At the same time,

our company is committed to deeper sustainability and we must evolve our

business to address both social and environmental issues.

“

”– Kim Jeffery

Nestlé Waters N.A.

Partner Point of View

We believe that businesses as well as individuals must assume their

share of responsibility as tenants of Planet Earth. The use of recycled

plastic in re-source™ bottles and the innovative in-store recycling pilot

program will help to raise recycling awareness and give our customers

another opportunity to be part of the solution.

“

”– Michael Besancon

Whole Foods Market

• Need for more responsible product choices

• Opportunity to engage customers in the solution

• Must be authentic and transparent

Partner Point of View

• Consumers are looking to recycle packaging materials away from home and work

• GreenOps contributes to internal goal of tripling material recycled

• Less than 30% of packaging material is recycled each year in the U.S., wasting very valuable natural resources

“

”– David Steiner

Waste Management

Sustainability means so many things to us at Waste Management – and to the people we do business with every day. But perhaps most important, it means that we are helping our company and our customers run better, more efficient, more environmentally conscious businesses and households. One of our chief goals going forward is to increase the volume of recyclable materials we process. Today that number stands at more than 7 million tons per year-- we expect to triple that number between now and 2020.     

GreenOps Summary

• Consumer oriented recovery system

• Product tracking

• Point of use rewards

• Recovery authentication/ verification

• Reverse logistics and processing

• On-line rewards, information and interaction

• Scalability

To eliminate the concept of waste means to design things – products,

packaging and systems – from the very beginning on the understanding

that waste does not exist; it means that the valuable nutrients contained

in the materials share and determine the design.

Partner Point of View

Understanding and Optimizing Life Cycle Design:

“Safe Nutrients Flowing in Cycles”

“

”– William McDonough & Michael Braungart

Cradle to Cradle

Cradle to Cradle Certification

1.0 Material Health

2.0 Material Reutilization/DfE

3.0 Energy

4.0 Water

5.0 Social Responsibility

Platinum

Gold

Silver

Basic

• Combination of product metrics & company metrics

• Spur innovation & ongoing optimization

The Result: re-source™ Natural Spring Water

• Brand dedicated to directly engaging consumers in the importance of recycling

• Bottles made of 25% recycled plastic

• Pilot of incentive-based, in-store recycling programs at select Whole Foods Markets

• For every plastic beverage container recycled, 5 cents will be donated to Keep America Beautiful, up to $200,000

• Consumer education about recycling via packaging, POS and Web site

• Cradle to CradleCM certification and GreenOps seal

• Building rPET market infrastructure so recycled bottles can have a second life as a new product

• Consumer tools to track and measure recycling efforts

CPG

Consumer info and

package data

Consumer rewards &

incentives

ECOSTATION automated recapture

GreenOps inclusion on packaging1Consumer purchase, consumption, disposal

choice

2

End-of-life product recapture, data collection and tracking3

Pickup , backhaul and commodity

processing & support

4 Beneficial end-of-life reuse such as recycled, reprocessed

products

5

re-source/GreenOps Process Flow

Think

Green

Rewards

Milestones-to-Date

• re-source product launch – Earth Day 2009• Over 1MM bottles available at Whole Foods Market locations

nationwide

• Recycling pilot program launch in select Whole Food Market locations

• Capturing PET, HDPE, AL, glass product packaging• Tracking over 7,000 products (and growing)• Initial evidence suggests significant brand lift for products

associated with tracking system as well as increases in retail foot traffic

• ThinkGreen rewards created and linked to GreenOps Tracking Stations

• On-line rewards platform that allows consumer to track and discuss individual product recycling activities

Key Learnings

• Collaboration is critical

• Need to consider sustainability efforts from all angles

• Dare to have a big vision

• Set long-term goals to work toward

• Don’t wait for perfection

• Every journey starts with small steps

Looking Ahead

• Continued rollout of recycling pilot program

• Plan to reach 200 Whole Foods Market locations by September 2009

• Steadily build infrastructure for rPET market

• Gradually increase percentage of rPET in bottles

• Long-term goal of 100% rPET bottle