Nestlé said it has invested $30 million in the Closed Loop Leadership Fund, a private equity fund created to help build circular supply chains, to lead the shift from virgin plastics to the use of food-grade recycled plastics in the U.S. This investment is the first to utilize Nestlé's packaging venture fund established earlier this year, which is part of the company's overall investment of up to CHF 2 billion to accelerate the development of innovative sustainable packaging solutions.
 
"This investment is one of many solutions we are exploring to address the global plastic waste challenge," said Véronique Cremades-Mathis, global head of sustainable packaging, Nestlé. "It will help create a more sustainable recycling system and, at the same time, assist us in achieving our commitment to reduce our use of virgin plastics by one third by 2025. This is particularly important as increasing the use of recycled plastics could substantially reduce the environmental impact of our packaging."
 
Closed Loop Leadership Fund is a private equity fund that was created to acquire companies along the value chain to build circular supply chains. The fund invests in companies that aim to increase recycling rates in the U.S. and keep valuable materials in packaging supply chains by integrating and improving all aspects of supply chains, from access, collection, sortation to processing.
 
According to the United States Environmental Protection Agency, the U.S. recycling rate for all materials, including plastics, is around 25%. Recycling rates, however, can vary significantly by material type. This is due in part to the different ability of municipal recycling systems to accept and process materials.
 
"It is important that we do our part to help keep recyclable materials out of landfills, and increase recycling rates in the U.S., and this investment is a significant move in that direction. It is also a critical step in our effort to secure access to high-quality, food-grade recycled plastics which can be converted into new packaging material for use across our product portfolio," said Steve Presley, chairman & CEO of Nestlé USA.
 
The investment will be used for the financing of Closed Loop Leadership Fund's acquisition of well-established, best-in-class companies that are advancing the circular economy in the U.S. The Fund aims to increase recycling rates by an additional 25 percentage points in areas serviced by the portfolio companies.
 
"Nestlé's investment is a significant commitment to help modernize, optimize and capitalize circular economy infrastructure in the U.S. and harness innovative technologies to keep materials in manufacturing supply chains," said Ron Gonen, CEO of Closed Loop Partners. "In addition to the investment, Nestlé has committed to create an end-market for the food-grade recycled plastics processed through the companies we acquire. This will enable us to fully close the loop on valuable materials."
 
Through its investment in the Closed Loop Leadership Fund, Nestlé will have access to recycled plastics feedstock processed by companies in which the Fund will invest in order to achieve greater volumes of food-grade recycled plastics for its packaging.
 
As consumer interest in more sustainable packaging continues to grow and manufacturers compete for supply, having access to high-quality food-grade recycled PET, polyethylene (PE) and polypropylene (PP) will increase Nestlé's ability to incorporate recycled plastics into packaging across its food and beverage portfolio. The increasing use of recycled plastics will help reduce carbon footprint, aligned with the company's ambition to achieve zero net greenhouse gas emissions by 2050.
 
This investment has the potential to impact a variety of brands in its U.S. portfolio. Nestlé uses PET in bottles for Coffee mate and Starbucks creamers, in trays for Stouffer's entrees, and across its bottled water portfolio which has doubled the amount of rPET used since 2019 across its still water portfolio in the U.S. to 16.5%. The company uses PE in rigid canisters of Nesquik powder, and PP in Lean Cuisine trays and the new Gerber Incredipouch, a first-of-its-kind, single-material baby food pouch designed to increase recycling value. Flexible films appear in a variety of packaging formats, including bags of Nestlé Toll House morsels and the wraps on refrigerated cookie dough.