"National Foods Marketing Management Report"
National Foods Limited National Packaging Covenant Report F05 July 04 - June 05 NATIONAL FOODS LIMITED Contents National Foods Limited Packaging Covenant Commitment 3 Executive Summary 4 Packaging Covenant Steering Committee 4 Description of NFL 4 Brands & Products 5 Operating Locations 6 Distribution 7 National Foods & the Environment 8 Report on Progress F05 9 Overview 9 F05 Packaging Material Use 10 Quantity of Packaging Used per tonne Product Produced 10 Primary Packaging 11 Secondary Packaging 11 Tertiary Packaging 11 How recyclable is our Packaging? 12 Non Recyclable Packaging 13 % Recycled Content 13 F05 Packaging Waste 14 Sources of Packaging Waste 14 Packaging Waste Recycled 15 F04 Action Plan Report 17 Contact Person 28 Appendix 1 29 2 N AT I O N A L PA C K A G I N G C OV E N A N T R E P O RT F 0 5 ( J U LY 0 4 - J U N 0 5 ) 3 National Foods Limited Packaging Covenant Commitment National Foods Limited is committed to respecting and protecting the environment and this is one the Company’s stated key values. As part of this commitment, the company was an early signatory to the National Packaging Covenant, a national initiative aimed at reducing the environmental impact of consumer goods packaging in the waste stream. The packaging covenant plans and activities have the full support and endorsement of the Board and management of National Foods Limited. National Foods Limited Peter Margin Managing Director is committed to respecting and protecting the environment... NATIONAL FOODS LIMITED Executive Summary Packaging Covenant Steering National Foods, as a producer of packaged food products, recognises the Committee packaging covenant as a positive initiative towards responsible management National Foods has an established executive steering committee to of packaging waste in Australia. We are implementing the principles of oversee the development and implementation of this plan. This committee product stewardship to meet our commitment and responsibilities in this brings together senior representatives from operations, marketing, and risk area. Successful integration with the company’s environmental and risk management. This committee meets monthly and reports to the Executive management systems and site improvement plans are starting to lead Risk Management committee and key stakeholders on progress and issues. towards meaningful results. Description of NFL This document contains a report for the F05 ﬁnancial year from July 04 National Foods was created in 1991 by amalgamating several dairy and food to June 05. An action plan for the newly merged Berri and National Foods related businesses with brand names and histories dating back to the 1800’s. business will be developed and will guide further progress and achievements National Foods Limited is one of Australia’s largest food companies with core for the next 3 years. The National Foods Packaging Covenant action plan activities in fresh dairy foods, milk and specialty cheeses. commits the company to a pro-active program targeting the new Packaging Covenant overarching goals. In May 2005 National Foods was purchased by San Miguel Corporation and was de-listed from the Australian stock exchange. In June 2005 the business was merged with the Berri Ltd to form a new business with core business in dairy and fruit juice. This report describes progress against plans for the original National Foods business (excludes Berri). 4 N AT I O N A L PA C K A G I N G C OV E N A N T R E P O RT F 0 5 ( J U LY 0 4 - J U N 0 5 ) 5 Brands & Products brands products Pura Whole Milk / Modiﬁed Milk / Classic Flavoured Milk / Cream Farmers Union Iced Coffee / Yogurt / Cheese Big M Flavoured Milk Masters Flavoured Milk Yoplait Yogurt / Le Rice Dairy Snack / Petit Miam & Baby / Go-Gurt / Optimal Feelgood Flavoured Milk Frûche Original and Lite Dairy Snack / Frûche on Fruit National Foods manufactures YoGo YoGo Dairy Snack Divine Classic Dairy Dessert a large range of brands and King Island Dairy Specialty Cheese / Cream / Créme Fraiché South Cape Antipasto / Specialty Cheese / Crispbread / Cheese Twists products. The flagship Pura brand Timboon Farmhouse Cheese Organic Farmhouse Cheese / Crispbread Tilba Specialty Club Cheese is manufactured and sold in all Superior Gold Smoked Salmon and Trout / Marinated Mussels Clover Creek Specialty Cheese States of Australia. Butterﬁelds Cheese Swissﬁelds Cheese Vitasoy Original, Calci-plus, Vitality Plus, Lush, Rice milk, So Milky NATIONAL FOODS LIMITED Operating Locations National Foods has production facilities and sales ofﬁces in every Australian registered office 1. Melbourne, Victoria State and employs approximately 2,100 people. All products are manufactured milk plants 2. Chelsea Heights, Victoria to precise quality standards in world-class production facilities. dairy food plants specialty cheese plants 3. Penrith, New South Wales soy beverage plant 4. Salisbury, South Australia 5. Crestmead, Queensland 6. Bentley, Western Australia 7. Lenah Valley, Tasmania 8. Morwell, Victoria 9. Palmerston, New Zealand 5 10. King Island Dairy, Tasmania 11. Murray Bridge, South Australia 9 12. Timboon, Victoria 6 4 13. Central Tilba, New South Wales 11 14 3 15 13 12 1 14. Wodonga, Victoria 2 8 10 15. Cobden, Victoria 7 6 N AT I O N A L PA C K A G I N G C OV E N A N T R E P O RT F 0 5 ( J U LY 0 4 - J U N 0 5 ) 7 Distribution The majority of products are distributed and consumed within Australia. However, the company also exports milk and fresh dairy products to the Asian region and cheese to many countries throughout the world. Distribution in Australia is made daily through a refrigerated network involving over 400 distributors, in excess of 100 depots and 9 distribution centres. The method of distribution differs depending on the State and customer but may be direct to store from the factory, or shuttled to depots or distribution warehouses before being delivered to retail outlets. NATIONAL FOODS LIMITED National Foods & the Environment National Foods is committed to implementing environmental best practice We continue to use the risk management system and its support tools to help and driving continuous improvement. This is emphasised both in our stated the business operate consistently well within safe controls. The risk system company values and the Quality, Safety and Environment Policy. brings together previously separate business continuity, quality, health, safety and environment activities and focuses them under a uniform and integrated A 3 year environment strategy guides the business on how to develop robust framework and methodology. and sustainable methods of environmental management so as to maintain strong performance in the food industry. Issues addressed by the plan include, Improvement plans and environmental key performance indicators have material use and efﬁciencies (including packaging and milk), waste disposal, been enhanced throughout F05. Work is currently underway to produce the water use and energy usage. Speciﬁc activities underway within the company company’s environment report, a method of formally reviewing and reporting include milk loss, chemical and water reduction programs and corporate and our progress. manufacturing site driven packaging projects as detailed in this report. 8 N AT I O N A L PA C K A G I N G C OV E N A N T R E P O RT F 0 5 ( J U LY 0 4 - J U N 0 5 ) 9 Report on Progress F05 Overview The F05 action plan has largely been completed with some notable achievements listed below. Initiatives to integrate the packaging covenant principles into the company’s environmental program in F05 have included: • Introduction of 15% recycled material into polypropylene milk crates in June 05 expected to reduce annual usage by more than 60 tonnes in • Implementing the environmental code of practice for packaging requiring the coming year. the completion of a comprehensive assessment of environmental impacts of all new packaging. • Elimination of all pallet liners from Victorian manufacturing site –net reduction of 23 tonnes of cardboard per year. • Revising all site environmental improvement plans addressing all relevant packaging covenant actions. • Support and participation in the PACIA (funded by Packaging Covenant) Polystyrene Recycling (Post Consumer) feasibility study. • Standardising the packaging tendering process to request continuous improvement opportunities from all packaging suppliers. • Introduction of stretch tape in Victorian manufacturing site expected to result in 6.4 tonne reduction in plastic used during F06 • New waste contracts developed requiring provision of improved recycling services and measured data for accurate packaging waste monitoring. • Introduction of Green Ofﬁce program in Melbourne ofﬁce & improved recycling services at Penrith & Tilba manufacturing sites. • Materials efﬁciency project (sponsored by Eco-Recycle) to determine in- process waste levels in 2 Victorian manufacturing sites. • Improved data collection including Cobden manufacturing site (acquired late F04) and Vitasoy Australia Pty Ltd. • Liaison with the Australian Food & Grocery Council (AFGC), RMIT Sustainable Packaging Alliance (SPA), Dairy Manufacturers Environmental • Improved database on packaging use and waste suitable for National Forum (DMEF) and Polysytrene Australia (PSA) to identify opportunities for Packaging Covenant baseline data submission in Nov 05. collaboration on packaging environmental issues. NATIONAL FOODS LIMITED F05 Packaging Material Use National Foods uses a varied mix of packaging materials to deliver products Quantity of Packaging Used per tonne to consumers safely and to their expected level of quality. Total packaging Product Produced usage in F05 was 30,700 tonnes. Packaging to Product ratio increased slightly from F04 (32 kg/tonne) due to Total packaging quantities in this report include exported packaging on products the inclusion of Vitasoy and Cobden product ranges. This is because these and exclude packaging from third party contract packed goods. F05 saw the products are transported in cardboard outer cartons rather than re-usable introduction of 2 new sites into data collection 1) UHT milk manufacture at Cobden crates used for fresh milk which have a lower weight to product ratio. in Victoria and 2) Soy milk production at Wodonga in Victoria. Therefore total There has been a continued growth in milk volumes and also a continuing usage quantities increased from F04. shift away from liquid board cartons to HDPE plastic bottles. HDPE bottles are a more efﬁcient use of packaging mass (kg) per litre of product and therefore this partly offsets the trend towards smaller (less weight efﬁcient) packs in the cheese and dairy foods part of the business. Packaging : Product Ratio 33kg/tonne 10 N AT I O N A L PA C K A G I N G C OV E N A N T R E P O RT F 0 5 ( J U LY 0 4 - J U N 0 5 ) 11 Primary Packaging Secondary Packaging Material Type Packaging Item % Total usage Material Type Packaging Item % Total usage High Density Polyethylene, HDPE (2) Milk & cream bottles 40.8% Cardboard Outer cartons 13.9% Liquid Paper Board Milk cartons 19.6% Polypropylene (5) Milk crates 2.6% Polystyrene (6) Yogurt & dessert cups 8.2% Low Density Polyethylene, LDPE (4) Bottle caps & bottle sleeves 3.9% Tertiary Packaging Liquid Paper Board UHT UHT Milk cartons 2.6% Material Type Packaging Item % Total usage PET (1) Milk bottles 2.2% Polyethylene Plastic (4) Pallet Stretch Wrap 0.5% Composite Materials Labels, lidding, Cheese wraps 2.0% Cardboard Pallet liners 0.1% Cardboard Inner product sleeves 1.5% Polypropylene (5) Cream & dessert packs 0.7% Mixed plastic (7) Cheese bags & ﬁlm 0.5% PVC (3) Cup lids & shrink sleeves 0.3% Aluminium Foil lids 0.4% Glass Cheese jars <0.1% Wax Cheese packaging 0.2% Balsa Wood Cheese boxes <0.1% Cloth Cheese wrapping <0.1% Steel Cheese Jar lids <0.1% NATIONAL FOODS LIMITED How recyclable is our Packaging? F05* The standard deﬁnition of recyclable packaging materials now includes only materials recycled via a post consumer recycling system widely throughout Recyclable 26,344 tonnes (85%) Australia (excludes polypropylene, PVC and PS partially accepted through majority Australia Wide kerbside systems). Non Recyclable Packaging 4,311 tonnes (15%) Overall quantities of both recyclable and non-recyclable materials increased recyclable not widely recyclable through Australian from F04 to F05. Non recyclable material types increased at a greater rate post consumer system non recyclable when compared to recyclables. This is partly due to the revised deﬁnition of recyclability, but also the volume increases of products in non recyclable *deﬁnition of recyclable materials has been altered to follow the new packaging (notably UHT cartons). packaging covenant KPI deﬁnitions and guidelines UHT cartons account for a notable 18% of non-recyclables. It is important to note that this is a temporary non-recyclable status due to a problem with the existing board grade used by the supplier. It is anticipated when board grade is changed that UHT will be acceptable through the mixed paper/cardboard recycling stream. This is expected to occur in 2006. Polystyrene remains the single largest volume of non-recyclable material types. It continues to be a focus of National Foods’ improvement plans. 12 N AT I O N A L PA C K A G I N G C OV E N A N T R E P O RT F 0 5 ( J U LY 0 4 - J U N 0 5 ) 13 Non Recyclable Packaging % Recycled Content Due to food safety standard requirements all primary packaging is currently Material Type Qty Packaging Item Comments manufactured from virgin material. However the majority of cardboard outer (tonnes) cartons and pallet pads contain 100% recycled content. There are some Polystyrene (6) 2,506 Cups & overlids (yogurt, cream & Some commercial recycling, limited post consumer. Approximately exceptions, driven by functionality, that contain approximately 80% recycled desserts) 5.5% recovery* board. In 2005 National Foods began purchasing milk crates with a recycled UHT Liquid Paper Board 808 UHT Milk cartons Temporarily not recycled until board grade is changed in F06 content of 15%. Composite Materials 455 Labels & lids (on non-recyclable Insufﬁcient volume to be economical or attached to non recyclable primary packaging) & Cheese wraps plastic Polypropylene (5) 206 Cream & dessert cups Recycling is regionally dependant. Some post consumer available but not Australia wide (approximately 9.9% recovery*) Mixed plastic (7) 142 All cheese bags & ﬁlm No post consumer processing to recycle mixed plastics Aluminium 128 Foil lids (yogurt, cream & desserts) Format is not practical for aluminium recycling Other No post consumer recycling process offered or format not suitable for recovery. Wax 53 Cheese packaging Balsa Wood 12 Cheese boxes Cloth 0.5 Cheese wrapping Steel 0.6 Cheese Jar lids NATIONAL FOODS LIMITED F05 Packaging Waste Total solid waste quantities (waste to landﬁll and recycling) continue to be Sources of Packaging Waste monitored by all manufacturing sites on a monthly basis and opportunities to improve recycling rates have been taken up by many. Packaging waste forms a considerable proportion (> 50%) of a sites solid waste. Packaging waste from our operations is comprised of 1) packaging from delivery delivery of incoming goods 2) in-process waste 3) returned damaged product finishing goods 4) post consumer packaging from ofﬁces. in process This is the fourth year of obtaining estimates on packaging waste from office waste manufacturing sites. Methods of calculation were improved, but there remain areas within the company where estimates have to be made due to the absence of measured data. Calculations from measured data are made using known waste collection volumes, materials efﬁciency data from data management systems and calculations of packaging incoming from purchased raw materials. This data collation currently takes signiﬁcant time and will need to be improved. 14 N AT I O N A L PA C K A G I N G C OV E N A N T R E P O RT F 0 5 ( J U LY 0 4 - J U N 0 5 ) 15 1) Packaging from Delivery of Incoming Goods 3) Returned/Damaged Products Packaging Waste Recycled Ingredients and packaging materials delivered into our factories are packaged Damaged ﬁnished goods requiring disposal are difﬁcult to recycle due to The majority of sites recycle signiﬁcant quantities of their packaging waste. in a variety of materials including plastic bags, drums, plastic lined paper bags the presence of product contents and labour required to clean and separate Highest levels of recycling are achieved with cardboard and HDPE plastic. or cardboard boxes. These are usually palletised with plastic stretch wrap materials being cost prohibitive. The most beneﬁcial action is to reduce During F05 new recycling services were established at the Melbourne ofﬁce material. The majority of these materials are recyclable. Plastic drums used quantities of ﬁnished product waste and this remains a key target for all sites. and Penrith and Tilba manufacturing sites. Currently few recycling services at for chemicals are largely returned to suppliers for re-use. It is packaging from sites include the addition of staff generated post consumer packaging. 4) Post Consumer Packaging delivery of incoming goods that forms the majority of packaging waste from Employees generate quantities of post consumer packaging waste through Improving recycling rates continues to be an area of focus for our business. National Foods operations. ofﬁce consumption of stationery, food, beverages and other products. Majority Planned activities include roll out of improved recycling services at ofﬁce 2) In-Process Packaging Waste locations and investigation of commingled collection services to include the of these materials are paper and cardboard, glass & PET plastics. In-process packaging waste is classiﬁed as packaging that would have been capture of post consumer packaging (ﬂavoured milks, soft drinks etc). used on ﬁnished product but has been damaged or lost in the ﬁlling and The total quantity of packaging waste (manufacturing + ofﬁces) generated packaging process making it unﬁt for its purpose. In-process packaging waste from National Foods sites is approximately 4000 tonnes. We estimate that includes obsolete packaging due to artwork print changes and new product 31% of this material was recycled in F05. releases. landfill recycled NATIONAL FOODS LIMITED F04 Action Plan Report Information below provides a detailed account of our progress against Progress has been measured as: speciﬁc actions points between 1st July 04 and 30th June 05. C =completed O =ongoing PC =partially complete NC =not completed Reducing Packaging Use Product Stewardship Action Measure Progress Category Research Reduce use of virgin polypropylene in milk a) kg’s recycled polypropylene used as a % C All milk manufacturing sites (excluding VIC) commenced purchase of a new milk crate containing crates of total propylene approx 15% recycled content in June 05. Expected quantities of recycled propylene in F06 are in the order of 60 tonnes. 1. Commence use of milk crates in all states (exc. VIC) Apr 05 A project has commenced to include recycled content in the Victorian crates (different crate design and supplier). 2. Determine plan for implementing nationally (i.e. including VIC) Oct 05 Research Reduce use of transport packaging: Kg’s of transport packaging used per kg Feasibility study in collaboration with RMIT centre for packaging design was successfully completed product in Oct 04. Stretch tape was determined as feasible with a number of advantages (including reduced 1. Complete feasibility study of stretch tape C use of plastic). for 1 site Oct 04 A new machine was purchased and commissioned on site in May 05. The stretch tape machine 2. Implement stretch tape as replacement C is currently wrapping about 25% of the sites product and upon further optimisation of wrap for plastic stretch wrap if feasible –site conﬁgurations is expected to reduce the quantities of transport packaging per kg product by 1 April 05 approx 70%. 3. Complete feasibility study on stretch tape PC King Island, Murray Bridge and Cambellﬁeld have all completed preliminary assessments and are -3 sites Dec 05 awaiting completion of project above prior to further action. 4. Optimise pallet wrapping procedures and PC Stretch wrap conﬁgurations at the Qld site have been optimised to use only 140-180g per processes other sites June 06 pallet wrap. Research Continue investigation and support of use of kg’s recycled PET used as a % of total PET PC Investigation into recycled PET and ability to include in current PET milk bottles was made. Next step recycled PET in PET milk bottles is to benchmark supply of PET bottles between suppliers and include ability to utilise recycled PET resin as an aspect of this benchmarking exercise. Trials will not take place until and understanding of 1. Trial recycled PET in PET milk bottles current use and risks of recycled PET bottles in the Berri business is obtained. May 06 16 N AT I O N A L PA C K A G I N G C OV E N A N T R E P O RT F 0 5 ( J U LY 0 4 - J U N 0 5 ) 17 Reducing Packaging Use Product Stewardship Action Measure Progress Category Research & Design Reduce use of virgin cardboard material • 5% reduction in Cheese (SA) cardboard Reduced weight of Le Rice twin pack outer cartons by 13% in July 04 by changing board weights grade. Reduction in cardboard from this activity was 25tonnes (3%) of the sites cardboard 1. Implement projects to increase recycled PC usage. Further opportunities have been identiﬁed but not yet implemented. content in SA June 05 • 2 tonne reduction of VIC slip sheets and liners All slip sheets were removed from VIC dairy foods operation reducing cardboard usage 2. Trial removal of slip sheets Sept 05, C by 23 tonnes. Implement Jun 06 Recycled content of majority (approx 80%) of outer cardboard cartons is 100%. There are 3. Initiate projects to reduce use virgin C functional requirements for use of virgin board in some outer cartons and therefore limited material after review of % recycled further opportunities. It was identiﬁed that inner cardboard sleeves currently do not contain content recycled material and may be an opportunity –these will be investigated as part of the new action plan. Design Reduce use of polystyrene sheet through Reduction in total usage of polystyrene in PC Trials were completed in Aug 04 however project was placed on hold from July 04-Aug 05 optimising sheet thickness form ﬁll seal operations per tonne product. due to need to review and re-establish optimum performance of thermoform process prior to Expected savings are approximately introducing material changes. The project is recommencing in Sept 05 and expected savings 1. Trials Sept 04-Apr 05 60 tonnes remain approx 60 tonnes per year. 2. mplement May 05 Design Reduce weight of labelling material for dairy Total usage of PE Paper labelling per kg NC Implementation of this project was dependant on outcomes of polystyrene sheet optimisation desserts product (estimated annual savings expected above. Labelling on dairy desserts and yogurt packaging provides strength and support to the to be 10 tonne) primary plastic tub so light weighting needs to be assessed as a completed pack unit. Results 1. Trial reduced GSM labelling material of preliminary assessment identiﬁed that dollar and environmental savings would be greater by June 05 getting maximum polystyrene weight reduction rather than packaging labelling. Therefore this 2. Implement reduced GSM labelling Jan 06 project is no longer active. Design Assess opportunity to remove C Blue colouring in all Yoplait Baby cup base was removed. Use of plain white polystyrene packaging inks sheet now allows off cuts and waste at the packaging manufacturing site to be recycled. Total purchase quantities of this material in F05 were 8700kg. Other products were reviewed 1. dairy dessert cup base colours –Jun 05 but colours were determined as being core to brand marketability and sales so no further opportunities were identiﬁed. Design Improve milk bottle design to reduce Reduced quantity (kg’s) of ﬁnished goods PC Further research and development on milk bottle designs was completed in F05. Target is to quantities of leaking product (& ﬁnished waste from inferior packaging. improve tamper evidence and reduce quantity of product and packaging lost through leaking goods waste) packaging. Trials on one design are planned for late 2005. NATIONAL FOODS LIMITED Reducing Packaging Use Product Stewardship Action Measure Progress Category Design Investigate feasibility of standardising box Costs and beneﬁts known and understood. PC Standardised box sizes were investigated as part of a project to assess opportunity to remove outer sizes on production lines to reduce waste carton lids and dividers. These however were not determined feasible. Reasons included risks to from size changeovers –May 05 product integrity and issues around requirement for standard stackable box sizes which would not be optimised for all products. An alternative lower GSM board for inner sleeves on 4x100g Yoplait baby Implement if net beneﬁt –Jan 06 was also investigated. Trials on inner sleeves are planned for late 2005. Production Review product changeover procedures Costs and beneﬁts known and understood. N/A Was not reviewed in this reporting period in dairy dessert manufacture to reduce polystyrene wastage –July 05 Implement if net beneﬁt –Dec 05 Research & Design Investigate opportunities to modify machine Known costs and beneﬁts associated with N/A Was not reviewed in this reporting period setup and use to reduce polystyrene waste machine changes generation during cup formation Aug 05. 18 N AT I O N A L PA C K A G I N G C OV E N A N T R E P O RT F 0 5 ( J U LY 0 4 - J U N 0 5 ) 19 Facilitate Recycling & Re-use of Packaging Materials Product Stewardship Action Measure Progress Category Research Develop company policy regarding polystyrene Long term improved recyclability of dairy PC Provided brand owner representation on the PACIA and Polystyrene Australia project use desserts and yogurt used packaging. steering group for post consumer polystyrene recycling. Project was due for completion in March 05 is still in progress. The project is funded through the packaging covenant 1. Participate in industry post consumer recycling and aims to determine the economic and technical feasibility of recycling. study. Feasibility of post consumer polystyrene recycling in Australia known and understood Company policy regarding use of polystyrene awaits outcomes of post consumer –March 05 study. Interim policy is to continue using polystyrene and review each new project as individual case following the company’s environmental code of practice and packaging 2. Determine policy regarding polystyrene use environmental assessment. June 05 Production Improve recovery rates of used polystyrene plastic Increased % of total polystyrene material C Communication to staff through memo aimed at improving discipline around segregation (post factory) for recycling collected for recycling. processes was provided in F05. Ongoing reminders and communication of achievements to day will be required. 1. Complete staff education/awareness of process –Mar 05 + ongoing Quantities of polystyrene captured for recycling are weighed and monitored. Quantity collected for recycling in F05 was 17,500kg 2. Implement regular monitoring of collection quantities –Mar 05 + ongoing Preliminary assessment on formed cups recovery has been undertaken with current recycler. In addition to this supply of all plastics to alternative recycling process is also 3. Investigate collection of formed cups for being pursued (plastics to fuel). recycling Jan 06 Design Decrease the use of non-recyclable packaging Improved % of recyclable preformed cups C Alternatives to non-recyclables are being assessed and investigated as part of the that are recyclable. company environmental assessment process. Successful changes are largely managed 1. Use alternative recyclable plastics in new through identiﬁed projects in the packaging covenant action plan (eg. alternatives to PVC products where provides net beneﬁt -ongoing Reduction in non-recyclable packaging shrink sleeves, recyclability of polystyrene plastic). used by SA dairy desserts operations 2. Replace existing polystyrene preform cups in by 100 tonnes (4% reductions from All Le Rice polystyrene pre-form cups were changed to polypropylene plastic in June South Australia with alternative materials where current) F05. 05. Polypropylene has improved recovery compared to polystyrene, although it is not feasible Dec 04 recyclable in all areas of Australia. 3. Identify opportunities to replace existing preform N/A Not investigated in this reporting period. cups with alternative materials –Sept 05 NATIONAL FOODS LIMITED Facilitate Recycling & Re-use of Packaging Materials Product Stewardship Action Measure Progress Category Production Increase recovery of used plastic packaging Increase plastic waste recycling rates from C A new waste contract for VIC manufacturing site has been developed which includes full plastics for recycling 25% to 50% Jun 06. and cardboard recycling and provision of collection quantities. Service was implemented in July 05 –actual qty’s recycled will be reviewed in 2006. An improved plastic recycling agreement was 1 Incorporate plastic recycling into current negotiated for NSW manufacturing site including collection of all plastic bottles and stretch wrap. waste collection services –SA, VIC May 05 WA increased recovery of plastics materials now including stretch wrap and plastic strapping. Production Increase recovery of used cardboard 95% recycling rate for recyclable cardboard C A national review of existing paper and cardboard recycling services was completed in Feb packaging for recycling packaging Sept F05 05. New or improved services were implemented at Queens Road, Cambellﬁeld and Tilba. All manufacturing sites with the exception of King Island now have paper and cardboard recycling. 1. Incorporate paper and cardboard King Island due to its isolation is more difﬁcult however a number of options are being reviewed. recycling into current waste collection Further improvements to recovery rates need to be made at all sites. services for all sites May 05 2. Implement paper cardboard recycling all PC site Sept 05 Design 1. Continue to monitor impact of current Known impact of PVC sleeves on HDPE C PVC sleeves are a contaminant in the HDPE recycling process but are currently at PVC shrink sleeving on milk bottle plastic recycling process. acceptable levels. recycling processes –ongoing Costs of alternative shrink sleeving materials were obtained in F05. Trials on a PET material are 2. Re-evaluate costs and beneﬁts of C planned for late 2005 to determine functionality. alternative materials prior to new Alternative materials are now assessed as part of the packaging environmental assessment packaging development –ongoing process. This assessment is part of the standard new product development process. 20 N AT I O N A L PA C K A G I N G C OV E N A N T R E P O RT F 0 5 ( J U LY 0 4 - J U N 0 5 ) 21 Systems to Support Reduced Packaging Use and Waste Product Stewardship Action Measure Progress Category Design Review success of Packaging Development Code of Reduction in kg packaging used in new products PC Full implementation of Packaging Code of Practice has taken large majority of Practice (COP) implementation per tonne of product. F05 period. The Environmental assessments was reviewed and improved in April 05. Completed assessments for all new product development projects have been 1. Audit completed June 05 & June 06 completed since April 05. General Improve accuracy of site solid waste data by obtaining % sites obtaining measured quantities solid waste C Requests for measured waste quantity data continue to be made and will be part collection quantities (kg’s) from waste providers in (to landﬁll and recycled) of all new waste service contracts. Currently 7 out of 15 sites track and monitor place of existing estimates measured quantities of solid waste. Remaining 6 sites estimate quantities based on frequency and size of collections. 1. 50% sites using measured quantities by Aug 05 2. 100% sites using measured quantities by June 06 General Continue monitoring packaging material usage by site Annually reported packaging to product ratio C Refer to page 10 of this report (kg/Tonne). General Continue monitoring of used packaging waste by site Annually reported quantities of used packaging C Refer to page 15 of this report per product (kg/Tonne) and % Recycling Rates of Used Packaging General Obtain data from suppliers on % recycled content of % recycled content of packaging documented in C % recycled contents of packaging materials are known. All primary packaging current packaging materials speciﬁcations is 100% virgin. Cardboard cartons are largely 100% recycled ﬁbre board, with some exceptions due to functional requirements. Information on recycled content 1. 90% of packaging materials known by June 05 is recorded in all new packaging speciﬁcations. 2. Data reported in F06 report General Continue regular monitoring and documentation of • Monthly PC steering Committee Meetings C 9x steering committee meetings were held during the F05 ﬁnancial year action plan Minutes • 6 monthly site progress reports –Dec & June. Progress reports were completed by all sites in Jan 05 and June 05. General Support Packaging Covenant & transitional funding Annual payments to Packaging Covenant Council C arrangements NATIONAL FOODS LIMITED Educate Staff, Suppliers & Customers about Packaging Covenant & Environmental Impacts of Packaging Product Stewardship Action Measure Progress Category Review ﬁnished goods packaging to identify Updated artwork briefs C A review of all packaging material components was completed in May 05. Documented guidelines opportunities for improved labelling (relating to for use in artwork development and consumer enquiries centre have been developed to ensure environmental impact, recycling, and litter/disposal) that labelling of all new products (& changes to existing) have appropriate plastics identiﬁcation, recycling and disposal information. Guidelines will be issued with the revised company Code of 1. Audit 50% milk and dairy foods artwork Nov 05 Practice in Oct 2005. 2. Complete audit of all packaging June 06 Continue communication of action plan Distributed environment reports C Internal environment report is scheduled for completion in Oct 2005. Presentations to head ofﬁce achievements and progress employees on environmental plans were made in Dec 2004. Updates to both the intranet and internet were made throughout F05. 1. Complete Internal environment report Dec 04 2. External environment report Oct 05 Continue communication of packaging covenant A national review of environmental induction training has not been completed –but will remain in principles and environmental code of practice the new action plan. 1. Redevelop general environmental induction NC A green ofﬁce communication program to raise the awareness of paper use and recycling in training ofﬁces was developed in Jan 05. Implementation commenced at Melbourne in May 05 and roll out has started to occur at Cambellﬁeld and Mulgrave. 2. Develop green ofﬁce program Mar 05 C 3. Implement green ofﬁce program Queens Road C ofﬁce (Jun 05) and Mulgrave ofﬁce (Oct 05) Maintain up to date information for the consumer Document revised annually C Document was reviewed in May 05 and will be re-issued as part of the company Environmental response centre relating to packaging and recycling code of practice for packaging. 22 N AT I O N A L PA C K A G I N G C OV E N A N T R E P O RT F 0 5 ( J U LY 0 4 - J U N 0 5 ) 23 Contact Person Susan Blacklow is the contact for packaging covenant related issues, responsible for monitoring and overseeing the implementation of the plan. Susan Blacklow Environment Manager National Foods Limited. 5 Queens Road Melbourne,3004. Phone (03) 9234 4300 Fax (03) 9234 4820, Email: email@example.com Appendix 1 This report covers National Foods and its subsidiaries in Australia: National Foods Milk Limited National Foods Dairy Foods Limited. King Island Company Pty Limited. Vitasoy Australia Products Pty Limited (49% ownership) It does not contain data or report progress on Berri Ltd or products manufactured and packaged by a third party. These will be incorporated into the 2006 annual report. National Foods Packaging Covenant Action Plan and Baseline Data 2005 Contents 1. Executive Summary ..................................................................................... 2 2. Description of NFL ....................................................................................... 2 3. Summary of Major Achievements under Previous Covenant Action Plans .. 2 4. Product Stewardship and Roles, Undertakings and Commitments .............. 2 5. Implementation of the Environmental Code of Practice ............................... 3 6. Indicative Baseline data against relevant KPI’s............................................ 4 7. National Foods 3 Year Action Plan & Individual Targets (Dec 05-Dec 08)... 7 1 1. Executive Summary National Foods, as a producer of packaged food products, recognises the packaging covenant as a positive initiative towards responsible management of packaging waste in Australia. National Foods’ 3 year Packaging Covenant action plan details commitments towards reducing environmental impacts of packaging and achieving the overarching targets of the strengthened packaging covenant. This plan will see National Foods undertaking activities in all product stewardship categories. National Foods has an established executive steering committee to oversee the development and implementation of this plan. This committee brings together representatives from operations, marketing, logistics, procurement and risk. The committee meets 6 weekly and reports to the Executive Risk Management committee on progress and issues. Information regarding previous achievements has been documented in the 2005 National Foods and Berri Packaging Covenant Reports and are referenced below. Copies of both reports are attached. 2. Description of NFL National Foods was created in 1991 by amalgamating several dairy and food related businesses with brand names and histories dating back to the 1800's. National Foods Limited is one of Australia’s largest food companies with core activities in fresh dairy foods, milk, juice and specialty cheeses. In May 2005 National Foods was purchased by San Miguel Corporation and was de-listed from the Australian stock exchange. In June 2005 the business was merged with the Berri Ltd to form a new business with core business in dairy and fruit juice. Further information about National Foods’ products, brands and operations is available in 1) National Foods Limited National Packaging Covenant Report 05 pages 5-8 and 2) Berri National Packaging Covenant Report 05 page 11. 3. Summary of Major Achievements under Previous Covenant Action Plans A summary of achievements and initiatives under the previous covenant actions plans is provided in National Foods Limited National Packaging Covenant Report 05 page 9. Further details of achievements are provided in main text of NFL and Berri 05 Packaging Covenant Reports. 4. Product Stewardship and Roles, Undertakings and Commitments National Foods has adopted principles of product stewardship and ultimately share with the supply chain the responsibility for environmental impacts from our products. The action plan outlined on page 7 commits NFL activity in the following areas: • Design • Production • Distribution • Wholesaling and Retailing • Recycling & Disposal • Research & Market Development • Communication & Education 2 5. Implementation of the Environmental Code of Practice NFL requires the completion of environmental assessments for all new packaging prior to business approval. The environmental assessment demonstrates full implementation of the Environmental Code of Practice for Packaging. These assessments continue to be a core component of our packaging covenant program and are included in the 3 year plan on page 7. 3 6. Indicative Baseline data against relevant KPI’s KPI Baseline Data Assumptions & actions to establish comprehensive data for 2006 1A Packaging tonnes by material type sold into Total Tonnes domestic packaging 43,777 Packaging quantity for majority of products is the domestic market believed to be accurate representation. Areas for improvement include: • Imported qty’s (estimated at comprising <0.1% of total qty’s) are not complete or accurate and have not been included in reported data. Incomplete data will be sourced and reported in 2006. • As stipulated export data has been excluded –however database accuracy requires improvement • Approximately 50% of contract packed product has been included –total contract packed product equates to 0.2%. Requires collection of data from contract packers in 2006. 1C Total weight of consumer packaging : total Tonnes packaging:Tonnes product =0.0498 Volumes of milk converted to Kg using weight of products packaged average density for milk. 3. Examples of Improvements made to packaging Refer to ACTION: and their effect on minimising environmental • pages 16-22 NFL Packaging Covenant Report 05 continue to report on specific examples in impacts of packaging • pages 4-10 of Berri Packaging Covenant Report 05 annual reports 4 KPI Baseline Data Assumptions & actions to establish comprehensive data for 2006 4. Changes to protection, safety, hygiene, shelf There are general trend in dairy foods market towards smaller ACTION: life or supply chain considerations affecting the convenience packs with greater packaging:product ratio. There aim to provide specific examples of type of packaging used with examples of their is also a general trend in milk towards larger 2-3L pack sizes with impacts in 2006 annual report. impact lower packaging: product ratios. Retailers are currently investigating shelf ready distribution packaging and alternative distribution methods to improve their retail efficiencies. Many options may not improve overall efficiencies of the supply chain and it is possible that these changes will increase the environmental footprint of packaging. • Refer page 10 of NFL Packaging Covenant Report 05 6A. Tonnage of non recyclable packaging by Total Tonnes Non Recyclable Packaging 8,694 material type Tonnes non-recyclable packaging by material type LDPE (4) 1508.9 **Polypropylene (5) 855 Polystyrene (6) 2233.1 Mixed Plastic (7) 325.6 Aluminium 110.9 Composite Materials 3606.5 Wax 44.4 Wood 10.2 Cloth 0.5 ** Qty Polypropylene milk crates excluded as are 100% reused and recycled 6B Total non-recyclable packaging as a % of 20% Packaging sold 16. Provision of on site recycling facilities On site recycling services are provided to all manufacturing sites ACTIONS except King Island. King Island is currently investigating As per recycling and disposal section alternative recycling solutions to overcome isolation and freight of the 3 year action plan (pg 9) costs. Standard recycling services include cardboard, paper, HDPE & PET plastics + some LDPE and polystyrene. Recycling services do not yet include recycling of office post consumer waste other than paper and cardboard waste • Refer to pages 14 & 15 of NFL Packaging Covenant Report 05 5 KPI Baseline Data Assumptions & actions to establish comprehensive data for 2006 21. Estimated amounts consumer packaging Approximate quantities of packaging and post consumer waste Data is not accurate as not all sites from onsite collection which is sent for recycling from NFL (juice and dairy) manufacturing and office locations is have ability to track actual waste and (tonnes and % of total) and to landfill (tonnes and 6231 tonnes recycled quantities. Estimates have % total) We estimate that 30% (1869 tonnes) of this is recycled and 4362 been made for sites without data. tonnes goes to lanfill. ACTIONS • Qty’s requested with all new • Refer to pages 14 & 15 of NFL Packaging Covenant waste contracts as part of 3 Report 05 year action plan • Regular review of solid waste monthly KPI data 22. Formal adoption of ECoPP –report actions Refer to sections 5 (pg 3) above and 3 year action plan (pg 7) of and commitments that demonstrate adoption this document. 26.Implementation of buy recycled purchasing National Foods currently does not have a Buy Recycled policy but policy will action this as part of 3 year action plan ( pg 10) 27.Establishment of baseline performance data 2005 baseline data will be provided again in 2006 to correct any Data provided above has some inaccurate assumptions, and to include imported packaging. assumptions ACTION • Reassess 05 baseline data in 06 with improved data management system 28.annual reporting against action plan Will be completed 30th October 2006 Reporting for integrated Juice and Dairy business in Oct 06. ACTIONS • 6 weekly Management review • quarterly Exec review • Quarterly site progress report • Improved data management systems configured for baseline data reporting –Jun 06 29.demonstrated improvement against individual To be completed 30th October 2006 targets 6 7. National Foods 3 Year Action Plan & Individual Targets (Dec 05-Dec 08) Packaging Design Action Measure Timing Responsibility 1a. Complete an environmental assessment for all new Completed environmental assessment for all projects Annual Packaging Development products in compliance with National Foods and Industry prior to PD-03 signoff review Managers (T&I) Packaging Environmental Code of Practice Record of KPI data for new packaging 1b. Determine benefit of NFL support of industry packaging Completed business case assessment for PIQUET financial April 06 Environment Manager (Risk) assessment (PIQUET) tool. support 2 10% recycled content in all milk crates –introduce Increased recycled content of Victorian crates – Mar 07 GM Dairy Manufacturing recycled content into VIC crates estimated 28 tonne reduction in plastic (Operations) 3 Improve reliability & consistency of form fill seal Reduce packaging waste on form fill seal production Apr 07 Vic dairy foods Operations packaging operations lines Manager Completed assessments on reduced sheet thickness Jan 07 4 Optimise Milk/Juice packaging and handling to reduce Packaging Development the incidence of leakers and finished product waste Managers (T&I) • Trial alternative packaging designs Trial completed Jun 07 • Implement improved packaging design Reduced incidence of leakers. Dec 08 5 Research alternative materials with Australian and OS Database developed on qualities and costs of alternative Jun 06 Packaging Development suppliers to reduce the use of non-recyclable materials. materials +annual Managers (T&I) • current preform PS & PP cups (juice/milk) Assess feasible recyclable materials and determine Apr 07 • PVC & mixed plastics action regarding policies for use. 6. Review packaging designs to identify opportunities to Database developed on qualities and costs of alternative Apr 06 + Packaging Development improve post consumer recyclability materials Ongoing Managers (T&I) • Review alternatives to PVC shrink sleeves and Assess feasible recyclable materials and determine Mar 07 other packaging known to have components action regarding policies for use. that are incompatible with recycling processes. 7. Review juice packaging for further light weighting opportunities & Implement 300mL & 1.5L bottle light weighting complete June 06 Juice Packaging Development • Target 15% weight reduction -300mL Implement weight reduction opportunities May 07 Manager (T&I) • Target 10% weight reduction -1.5L 8. Review opportunities for introducing recycled content Supplier capability determined Jun 06 Packaging Development in all fibre board (primary packaging boxes & sleeves) Trial recycled content (dependant on above) Jun 07 Managers (T&I) Implement recycled content (dependant on above) Jun 08 9 Investigate opportunities to reduce number of Opportunities to reduce packaging components actioned Dec 07 Juice Packaging Development packaging components Manager (T&I) • Removal of wad induction seal • Removal of neck label 7 Production Action KPI/Measure Timing Responsibility 1 Incorporate best practice waste/efficiency into design Higher efficiencies in all new form fill seal machines Dec 08 GM Dairy (Operations) or GM for all new filling equipment compared to current operations. Engineering 2 Review change over procedures and machine setup to Review completed and opportunities identified at all sites Jan 07 Site Operation Managers identify opportunities for waste reduction –all Actions incorporated into site improvement plans manufacturing sites. Reduction in site in-process packaging waste Mar 07 Mar 08 3 Monitor quantities of finished product waste and Records of weekly finished product waste –all sites Dec 06 Site Operation Managers identify opportunities for reduction-all manufacturing Actions to reduce finished product waste incorporated into sites site improvement plans Jan 07 Reduction in site finished product waste Jan 08 4 Review process for management of product deletions Process revised and responsibilities for controlling packaging Dec 06 GE Marketing & Innovation and packaging writeoffs to minimise waste waste during deletions clearly understood 5 Request contract packer to review operations to Contract packers contacted July 06 National Procurement Manager identify packaging waste reduction opportunities Review completed Jan 07 6 Review the use of export standard packaging in local Optimise use of export quality (heavier weight) packaging, Mar 07 GM Juice Operations production. minimal use in domestic market Distribution Action KPI/Measure Timing Responsibility 1 Use stretch tape equipment in place of stretch film for Completed review Mar 06 Site Operations Managers new or replacement pallet wrapping operations Stretch tape implementation incorporated into site May 06 • Review sites that box product and determine improvement plans opportunity and likely dates for changeover Expected 75% reduction in film usage for each site making • Implement according to review outcomes change. 2 Review palletisation configurations –to determine Completed review of palletisation configurations Dec 06 Site Operations Managers optimum transport & distribution conditions –all sites Implement improvements Jun 07 3 Evaluate current delivery formats with suppliers and Review of delivery formats completed Dec 06 Site Operations Managers & GM operations to identify improvement opportunities Opportunities implemented Dec 07 Supply & Trading 4 Complete business case for loose stacking crates –milk Reduced use of stretch wrap for distribution of loose stacked Jun 07 Site Operations Managers sites milk crates 8 Wholesaling & Retailing Action KPI/Measure Timing Responsibility 1 Complete environmental assessments in consultation Environmental impacts of comparative distribution packaging Ongoing GM Supply Chain with retailers regarding future packaging formats (e.g formats are known Development shelf ready) 2 Incorporate environmental design considerations into Development briefs with environmental July 06 GE Marketing & Innovation & marketing point of sale development briefs. specifications/criteria Environment Manager Recycling, Reprocessing & Disposal Action KPI/Measure Timing Responsibility 1 Seek improved polystyrene recycling for manufacturing Increase recovery of polystyrene for recycling from Feb 07 Site Operations managers sites including: manufacturing sites (> 10%) • recovery of formed cup waste and packaging in contact with product (currently not recovered) Increased recycling of polystyrene from manufacturing sites June 08 • opportunities to supply plastic waste to diesel fuel (>25% recovery) operations. 2. Participate & support a coordinated approach to litter Evidence of participation in AFGC litter forum Quarterly Environment Manager Support & facilitate the establishment of an Industry forum review for this purpose (thru AFGC) 3 Review tender process and waste service agreements to Improved accuracy of reported waste quantities Jan 07 National Procurement target improved recycling services -include provision of Improved recovery of factory packaging waste Jun 07 Manager & Site Operations measured waste quantities as a service requirement. Managers 4 Implement Green office program at all NFL office Increased provision and use of recycling facilities Environment Manager locations 6 sites Jun 06 15 sites Jan 07 All sites Jun 07 9 Market Development and Research Action KPI/Measure Timing Responsibility 1 Support and actively participate in the development of Opportunities for polystyrene post consumer recycling known Quarterly Environment Manager feasible process and market for polystyrene recycling in and understood & communicated review Australia • Participate in PSA technical feasibility study as steering committee member • Support initiation of an industry forum which aims to implement recommendations from technical feasibility study • Support the development of a plastics to fuel operation in Australia –by actively seeking out opportunities to supply material. 2 Support recycling markets by implementing a Buy Green Develop policy and guidelines Jan 06 Supply & trading GM & purchasing policy Information included in all tender responses Mar 06 Environment Manager • request information on availability of Incorporated into service level agreement where meets Ongoing recycled products, recycled content and business requirement recyclability of products with all new purchasing enquiries and arrangements 3 Investigate feasibility of incorporating recycled PET in Supplier capabilities known & understood Aug 06 P&I Procurement Manager & PET bottles Feasibility assessment completed June 07 Packaging Development • Evaluate supplier capability to product PET bottles with recycled content (include in tender evaluations) • Complete feasibility assessment including trials 4 Understand impact of NFL packaging in recycling process Evidence of regular review with ACOR Quarterly Environment Manager streams review Monitor impact by maintaining regular contact with Australian Council of Australian Recyclers (ACOR). 10 Communication & Education Action KPI/Measure Timing Responsibility 1. Improve labelling and provision of information to consumers about recycling, litter and disposal • Develop guidelines for juice Mar 06 Juice Packaging • Annually review & update guidelines Development • Information provided to Consumer Enquiry Jun each yr Packaging Development & centre Environment Manager 2 Incorporate request for environmental Revise tender process and standard document May 06 Supply & Trading GM & improvements opportunities in tender process Opportunities incorporated in service level agreement Environment Manager • Determine whether supplier is a signatory to the Packaging Covenant • Request proposals on opportunities for environmental and business improvements • Address the NFL Buy green policy requirements 3 Incorporate minimum environmental standards in Guidelines developed for standard service level agreement May 06 Supply & Trading GM & service level agreements Environment Manager • Revise standard service level agreement in supplier contracts to communicate expected minimum standards and desirable standards in relation to packaging and environmental 4 Maintain Internal communication program Environment Manager • Annual report Intranet, email posting of PC report Annual • intranet and site visits • site improvement plans Incorporate PC actions into site improvement plan Various • site progress reports Progress reports completed Quarterly • steering committee Steering committee minutes circulated 6 weekly • induction and training program Induction and training program developed Dec 06 5 Maintain external communication program Environment Manager • Public website Annual revision to website Oct each yr • Conference presentations & Industry AFGC environment committee Quarterly Committees Conference & other industry presentations Ongoing 11 Other Action KPI/Measure Timing Responsibility 1 Integrate Environment program with Juice sites Environment Manager and • Improvement plans Improvement plans completed all sites June 06 GM Juice Operations • Environmental KPI’s Environmental KPI’s reporting commenced Feb 06 • HSE compliance system HSE compliance system commenced Feb 06 • Green office program Green office incorporated into site plans June 06 2 Update packaging specifications –document data Updated packaging specification records Ongoing – Packaging Development from environmental assessments (recycled content, annual Managers (T&I) packaging weight per kg/ product etc, recyclability) review 3 Improve accuracy and automation of packaging Incorporated into design of any new IT data management system Dec 06 Business Systems covenant baseline data collation and reporting 12