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Trucking Capacity is in a Jam »

May 13, 2019

By Geoff Freeman, president and CEO, Grocery Manufacturers Association

We live in an on-demand culture. We expect what we want, when we want it, at an affordable price. And we typically don’t think beyond the store or the mailbox about how it gets to us.

But what if your daily essentials didn’t arrive? What if you went to the store to find an empty shelf or went online and found your favorite sunscreen cost more than last time you bought it?

As Infrastructure Week kicks off, we are reminded of this looming transportation crisis that threatens the availability and affordability of the products we all depend on. Eighteen of the 25-largest CPG companies say rising transportation costs have already or may lead to higher prices. Impending truck shortages, driver restrictions and crumbling infrastructure are all contributing to this issue, and American shoppers may end up paying for it.

Demand is Outpacing Supply

Today, there’s only one truck available for every 12 loads that need to be transported. Demand for more trucks is exploding as ecommerce continues to grow, and auto manufacturers simply can’t keep up, with a backlog of more than 200,000 trucks.

But even if the nation’s trucking supply could keep up with demand, available drivers are still needed to operate them. With nearly 900,000 new drivers needed over the next 10 years and only 108,000 expected to be hired, demand is sharply outpacing supply. Low unemployment rates mean a tight labor market and intense competition across every industry.

Last year, companies offered a 10% pay raise on average, according to the National Transportation Institute, on top of hefty signing bonuses to attract new recruits. Trucking companies are doing their best to stay competitive, but the average age of the American truck driver is 49 and as a large portion of drivers begin to retire, the market will remain tight even if the broader economy changes.

Regulations and Government Inaction Further Constrain Capacity

Illogical regulations complicate matters even further, allowing CDL-licensed drivers under 21 to make cross-state journeys that are hundreds of miles long, but prohibiting them from driving just a few miles to make a delivery across state lines. We want safe drivers, but state boundaries aren’t the guardrails for safe driving.

Though legislation has floated around Congress for years and the Department of Transportation has launched a pilot program, as it stands today, trained truck drivers in the military are not able to take their skills into the commercial marketplace once leaving the service if they are under 21.

Of course, the elephant in the room is infrastructure. America’s well-documented infrastructure crisis leaves trucks stuck in traffic longer, missing narrow delivery windows. The American Transportation Research Institute found that congestion on our roadways costs 1.2 billion hours in lost productivity annually — the equivalent of 425,533 truck drivers sitting idle for an entire year.

But America’s infrastructure problem won’t just mean a few extra bumps in the road or some inconvenient slow-downs on the highway. In 2016, the American Society of Civil Engineers projected America would lose nearly $4 trillion in GDP 2.5 million jobs by 2025 if significant investments were not made in our nation’s crumbling infrastructure. Our infrastructure supports millions of jobs and CPG products, empowering every family across the country. It is imperative that Congress acts soon to begin building infrastructure for tomorrow, before consumers pay the price.

Washington cannot sit idly by any longer. Americans rely on the daily essentials the CPG industry creates at the affordable prices they have come to expect. Ignoring America’s transportation problems today could mean a crisis tomorrow.

To learn more about the transportation crisis, read GMA CEO Geoff Freeman’s new op-ed in The Hill.



GMA Spring Update: Our Commitment to Driving CPG »

May 9, 2019

By Geoff Freeman, president and CEO, Grocery Manufacturers Association

This year, GMA set out a bold new agenda to empower the CPG industry to grow and thrive. We challenged ourselves to be focused, deliberate and impactful as we promote the incredible value of the CPG industry and the millions of lives these products power every day.

As part of our ongoing commitment to advancing our four strategic pillars, GMA debuted a new website homepage last week, highlighting the industry story and the organization’s fresh, new direction. This temporary online presence is only the beginning, with additional work underway to make our vision for a reimagined GMA a reality. Here’s an update on our efforts.

 

Enhancing Packaging Sustainability

Last month, GMA released our latest report, Reduce, Reuse, Confuse: How Best Intentions Have Led to Confusion, Contamination and a Broken Recycling System in America. The report focuses on the challenges we face combating a broken recycling system, highlighting the great work the industry does in this space and the steps stakeholders must take to ensure America’s recycling system is effective. You can find coverage of our report in Fast Company, Forbes and Huffington Post.

Championing Smart Regulation

From poorly designed rules that point to burdensome processes and not the needs of American consumers, to guidelines that create an unwieldy, expensive and unsustainable environment for success, patchwork regulations have negative impacts on both consumers and CPG companies. Later this month, GMA will shed light on some of the issues consumers and the industry face with a monthly series of case studies highlighting problem regulations.

Creating Frictionless Supply Chains

Infrastructure Week officially kicks off on Monday, May 13 and the CPG industry has a major stake in the future of our nation’s transportation capacity. In an op-ed appearing in The Hill, I explained the importance of finding a permanent solution, noting the urgency in fixing America’s deteriorating infrastructure before consumers are left with rising prices.

Next week, GMA will join more than 500 organizations from varying industries to urge legislators to act and build America’s infrastructure for tomorrow.

Building Trust in CPG

There are currently over 55,000 items on SmartLabel and we are on track to deliver more than 60,000 by year’s end. As the program expands, GMA remains committed to developing the roadmap for the next generation of this important industry program.

As GMA continues to reshape its brand and elevate itself as a leader in the industry, our commitment will be to continually highlight the vital role CPG companies play in every American home. These four pillars will be at the forefront of everything GMA sets out to accomplish, both this year and beyond.



Bette Midler Changed My View of the Environment »

April 19, 2019

By Katie Denis, senior director of industry narrative at the Grocery Manufacturers Association

The first time I realized that humans influenced the planet’s health was during a 1990 Earth Day television special led by Bette Midler as an ailing Mother Earth. In the special, she is helped by a who’s-who of stars — Meryl Streep, Robin Williams, Doogie Howser, Muppets, Ghostbusters and Golden Girls. Doc Brown even comes back from the future to warn us it doesn’t look good.

Not one to ignore warnings from the inventor of the flux capacitor, I wanted to help. And when Magic Johnson and Michael Douglas tell you to recycle, you recycle. A lot of people did. The recycling rate in 1990 was just 16%. It is now 34%.

Bette Midler would be delighted to learn that, today, 74% of Americans consider themselves extremely or very concerned about the environment. When asked how they felt a decade ago just 38% said the same.

We mean well. But that doesn’t mean we’re doing well.

The rise of single-stream recycling — one bin, no sorting — has created the aspirational recycler. Not sure if an item is recyclable? Toss it in the bin and hope it will get sorted. It’s a common philosophy shared by 40% of Americans — one that grows with those who are more environmentally concerned. But it is that kind of thinking that can contaminate an entire load of recycling.

It’s hard to know what you can recycle. Each one of the thousands of local recycling systems sets its own policies, creating a labyrinth of rules and very little certainty. Our survey found that Americans felt recycling was more confusing than building Ikea furniture, doing your taxes, playing the stock market or understanding the opposite sex.

Take, for example, the pizza box. If it’s grease-stained or has food residue it isn’t accepted anywhere, but from there, it differs from place to place. In Arlington, VA, it’s allowed. Step across the border into Fairfax County, it’s not accepted. If you’re in New York City, put that pizza box in the bin. But in Long Island, NY, it goes in the trash.

Americans Who Say You Can Recycle…

Plastic bags

60%

To-go coffee cups

55%

Plastic straws

53%

Source: GMA’s Reduce, Reuse, Confuse: How Best Intentions Have Led to Confusion, Contamination and a Broken Recycling System in America

Some items are more consistent. Plastic bags, to-go coffee cups and plastic straws are frequently on the list of items not accepted in curbside bins. But the majority of Americans don’t realize that.

The problem is that every time we toss something unrecyclable in the recycling, we risk contamination. Contamination, to a degree, has always been part of the system, but it became a much bigger issue when China stopped accepting items that had more than a 0.5% contamination rate — a practically impossible standard. Since then, the value of recycled materials has plummeted, leaving local systems scrambling.

Unfortunately, the answer to contamination so far has been to reduce the list of recyclable materials. Prince William County, VA has stopped taking glass. Marysville, MI is saying no to newspaper. Coast to coast, the struggle to continue recycling while dealing with its skyrocketing costs is prompting changes that are not a long-term solution and are unlikely to go over well with the 84% of Americans who say they expect their area to offer recycling.

So how can we save Bette Midler? Everyone — private industries, individuals and public entities — has a role to play if we’re going to fix America’s badly broken recycling system.

  • Create more recyclable, reusable and compostable packaging. We’re making good progress here. 100 percent of the 25-largest CPG companies have commitments to creating recyclable, reusable and compostable packaging.
  • Learn the local rules. Our recent report made it clear that even though we think we know how to recycle, we have a lot to learn.
  • Find ways to simplify recycling and lower contamination rates. Thousands of systems create thousands of different rules. Clearing up confusion will reduce contamination, making recycling more economically viable.

2019 marks the 49 years since the first Earth Day (and 29 years since one of the most epic television specials graced the silver screen). By next year’s 50th anniversary, let’s do more than hope we see change — let’s create it.



Making a Commitment to America’s Recycling Future »

April 11, 2019

By Meghan Stasz, vice president of packaging and sustainability at the Grocery Manufacturers Association

I went into sustainability — like every wide-eyed hopeful starting in the field — to save the world. After more than 15 years, I’m still hopeful, but more aware than ever of the magnitude of the challenge before us.

Working on behalf of consumer packaged goods (CPG) companies, I know how committed the industry is to sustainability. I also know recycling and waste are major concerns for consumers, especially when packaging doesn’t end up where it should.

Every CPG company I’ve encountered focuses on sustainability. All of the 25-largest CPG companies have made commitments to increasing recyclable content, minimizing packaging or reusing material. Eighty percent of them are working toward fully recyclable packaging for all products by 2030 — at the latest.

The industry is also driving innovation, from developing shampoo bottles made from beach plastic to investing in zero-interest loans for cities to upgrade their recycling infrastructure. While a start, these efforts alone won’t be enough.

Our recycling system needs major improvement, and everyone must play a role. Tackling this problem requires three simple but significant actions.

1. Innovate for the long-term.

One-off solutions won’t fix the problem. Even materials consumers perceive as more environmentally friendly present challenges. Glass, for example, is recyclable, but hard to handle – it breaks and is heavy, requiring more fuel to transport. Such complications show why we must think holistically about packaging innovations.

The CPG industry is investing in packaging design and product distribution innovation. In a new initiative called Loop, Clorox, P&G, PepsiCo and Unilever are among the 25 companies partnering with the recycling company TerraCycle to pilot a new sustainable packaging model that delivers products in reusable containers to consumers. PepsiCo piloted its Tropicana orange juice in refillable glass bottles and lines of its Quaker cereal in stainless steel containers that are picked up after consumption, cleaned and refilled. P&G will offer Pantene shampoo products in aluminum bottles and Tide detergent in stainless steel.

2. Be “all-in” on recycling.

Even as Americans have improved their recycling, we still throw out 22 million tons of recyclables each year. According to the EPA, Americans recycle just nine percent of plastic, 26 percent of glass and 34 percent of metal.

The first step is getting recyclables in the bin — but it’s also about getting them there the right way. Thousands of recycling programs use dramatically different technology. Some deploy optical sorters, magnets and fans to sort by weight and material type. Others use workers to hand-pick higher value material from a conveyor belt. The result? What’s recyclable in one town is prohibited in the next.

Confusion creates contaminated items that can’t be recycled but end up in the recycling stream. Contamination rates are rising, from seven percent 10 years ago to 25 percent today.

Contamination became an even bigger problem last year, when China, the biggest buyer of our recyclables, limited contaminants to no more than 0.5 percent — a level our system cannot reasonably meet. Accordingly, mixed paper and plastic exports to China plunged over 90 percent from 2017 to 2018, exacerbating the American recycling problem.

3. Create a system that supports recycling.

Following China’s policy change, recycled material’s value plummeted, as U.S. recycling programs lost their biggest market. What some local programs used to sell for a profit, they now pay to get rid of. This dramatic shift forced hundreds of programs to reduce or suspend recycling efforts.

The recycling system has many failure points. If consumers don’t recycle, CPG companies can’t reuse material. If companies only design packaging to protect the product and not with the full lifecycle in mind, we wind up with packaging that can’t be recycled or recovered. If local systems aren’t using best practices and educating residents, participation rates fall and municipalities struggle to afford recycling programs.

Today, the attitude on recycling is “why wouldn’t we?” But it could easily shift to “why bother?” We need to come together, support what works and drive innovation at every level of the process.

The CPG industry is making real investments to increase sustainability, but it is one part of the equation. We need the parts of the whole to come together to enact meaningful change to our recycling system — change we desperately need. If we can do that, every wide-eyed hopeful that comes after me will know what’s possible.


Meghan Stasz is vice president of packaging and sustainability at the Grocery Manufacturers Association. She has 15 years’ experience in environmental sustainability at GMA and with the Environmental Defense Fund and has worked extensively on packaging and recycling, food waste and responsible sourcing.



HGTV or CPG: Open Concept is What Consumers Want »

March 29, 2019

By Karin Moore, senior vice president and general counsel

I’ll admit it: I’m an HGTV junkie. Take me through your house-buying process. Show me your before and after. Let me judge you for wanting a tiny house with a finished basement with room for a pool table.

After countless hours of analysis, the one thing every buyer and homeowner has in common is wanting open concept. Walls need not apply.

via GIPHY

Coming away from the first day of GMA’s Legal Conference, my biggest takeaway isn’t all that different. When it comes to consumer packaged goods, consumers want open concept too.

There’s little clarity about how to achieve the transparency that consumers want — and likely will come to demand in time. Regulatory actions are disparate and murky. The federal government moves at a glacial pace. States and localities create a patchwork that companies need to comply with or stop selling their product, resulting in increased costs and less choice for the consumer.

But as we look at what consumers want in the future, we don’t need to wait for regulators to bring the walls down — and in many cases, we aren’t.

Consumer expectations are growing — and will continue to grow. Just like every home show, they want open concept and granite countertops, outdoor space and a double vanity. In the case of CPG products, they have a significant wish list and, unlike a homebuyer looking for granite countertops, they are unlikely to compromise on the things they care about.

At the GMA 2019 Legal Conference, we heard four consistent themes about what consumers want and what legal teams will need to account for in the future:

  • Insight into how a product is made. Is it ethically produced? Is it humanely sourced?

  • Packaging that makes sense. Is it sustainable in some way—or better, every way? Does it fit the product inside or will you have slack fill problems?

  • Visibility into ingredients that matter to them. Is it low sodium, organic, gluten free, vegan, Halal? Where were the potatoes grown? And where was the tuna caught? You name it, consumers are more interested in that information.

  • Clear and simple label information. They want to know about ingredients, but they don’t want labels cluttered to the point of confusion.

None of these wish list items are surprising or unreasonable. Unfortunately, sometimes the wires get crossed — and that often happens when regulations conflict and conflate the problem.

For example, whole grain cereals are considered healthy by the FDA. But California’s Prop 65 requires warning labels on products containing chemicals that have been known to cause cancer, regardless of amount and regardless of how it got in the product. According to California, that requirement would extend to the acrylamide formed when you bake whole grain cereals. While California presumably would rather consumers were sold uncooked whole grain cereal, whole grain cereals are healthy in the other 49 states. A morass of 50 different sets of rules creates an unhealthy regulatory environment. Regulations serve a purpose, but patchwork, conflicting regulations only serve to confuse consumers.

Regulations can also create a problem where none exists in the minds of consumers. There is a debate raging right now about what certain plant-based foods should be called. Can almond milk be called milk? Should cell- or plant-based meat be allowed to have “meat” on its label? These are not arguments that consumers will concern themselves with. “Consumers don’t really care, they just want the option for these foods,” said Emily Lyons of Michael Best & Friedrich LLP. “They just want truth in labeling and advertising.”

It is incumbent on legal teams to be ahead of regulations, not just compliant. Let’s do the work of giving consumers the open concept CPG products they want and deserve.

The 2019 GMA Legal Conference was held March 4-5. The annual event features in-house and outside counsel that provide expertise on the legal and regulatory challenges CPG companies are facing. Join us next February 25-26, 2020 in Rancho Mirage, Calif.



Our Vision for GMA’s Future »

February 13, 2019

By Geoff Freeman, president and CEO, Grocery Manufacturers Association

Over the past several months, we have been working with GMA’s leadership to develop a long-term strategy to fundamentally transform our organization. Together, we have set a bold goal: to elevate GMA as the leading voice of the consumer packaged goods (CPG) industry. GMA must become highly effective at articulating the industry’s narrative with key audiences, spearheading advocacy efforts to inform policy and driving initiatives that power growth.

Five core pillars will guide our work:

1. Transform the Organization

We will fundamentally reimagine and reconstruct GMA, building an organization that is prepared to succeed now and in the future. Every aspect of GMA — our identity, mission, structure, core capabilities and operations — must be aligned with our new vision. Incremental steps are not enough to achieve our goals; we must embrace organization-wide change.

2. Establish Distinct Purpose and Mission

The transformation of GMA must begin by answering two foundational questions: “who is GMA?” and “what is our mission?”

GMA has struggled to clearly answer these questions in the past, which led to confusion and conflicting priorities. In particular, GMA attempted to represent both consumer-facing and non-consumer-facing brands, and it focused on a number of “aisle-specific” issues that failed to unite industry interests.

Instead, we propose the following two simple, strategic answers:

  • We are consumer-facing brand manufacturers at our core.

The leadership of branded CPG companies must drive GMA’s agenda and priorities going forward. In today’s world, consumer-facing companies operate in a fundamentally different environment; understanding and shaping this environment must be the core of GMA’s mission.

  • We are an umbrella organization built to drive industry growth and profitability.

The new GMA will embrace a proactive, strategic agenda focused on the business of consumer packaged goods. We will be an umbrella organization that unites the industry by taking its cue from C-suite leadership and removing barriers that impede growth for our core member companies.

3. Build Proactive Advocacy Agenda

To achieve our new mission — delivering industry growth for consumer-facing brand manufacturers — GMA must develop modern advocacy capabilities that are on-par with the best trade associations. This means multi-faceted advocacy that integrates strategic communications, research, ally development and government affairs.

To build this vital function, GMA will:

  • Develop and articulate a clear, compelling industry narrative.

We will create a cohesive narrative that spotlights and quantifies our industry’s value, from economic contributions and jobs to industry innovations and environmental sustainability. This positive, compelling story will provide the basis to change perceptions, generate political and public support and shape policy.

  • Align issue priorities to C-suite priorities.

GMA’s agenda must shift to reflect the priorities of our member companies’ top leaders. This is the only way GMA can effectively drive industry growth and ensure relevance for those we serve.

  • Adopt a pro-consumer orientation.

Choice. Affordability. Access. Product Innovation. Aligning our advocacy around these pro-consumer concepts exponentially increases our prospects for success.

  • Possess a bias for offense.

Our advocacy agenda must be built on an offensive mindset — seeking opportunities for growth, driving a clear, positive narrative, actively shaping industry perceptions and framing the debate.

4. Focus on Clear Set of Priorities

We will make informed and disciplined choices about our priorities, focusing on the critical imperatives that yield the strongest returns. Instead of trying to be all things to all people, we will bring clarity to our strategy and set defined goals.

With this in mind, two core themes will drive everything we do:

  • Promote the value of our industry.

We must build a narrative about the power and impact of our industry, establishing GMA as the go-to source for influencers, expertise and research on critical consumer and industry trends. We must tell our story, instead of allowing others to tell it for us.

  • Champion smart, uniform regulation. 

We must highlight the negative impacts of costly, patchwork regulations, while calling for a smart, informed federal regulatory framework that promotes choice and builds consumer trust across the sectors we represent, from food and beverage to cleaning products.

In addition, three practice areas will command our primary focus through 2020:

  • Build trust in products.

We are a complex industry built on complicated science, chemicals and emerging technologies. Contrast that with strong emotions, rapid information sharing and a world of “alternative facts” and you have the makings for an environment that erodes trust between brands and consumers. GMA will seek to build trust by promoting our industry’s ability to provide consumers with the information they seek, shaping a more informed environment about our commitment to safety and leveraging programs, such as SmartLabel, to fill a void in the information marketplace.

  • Enhance packaging sustainability.

The industry boasts a wide range of sustainability commitments and advancements that need to be communicated to key audiences. GMA must also help demonstrate the widespread confusion around the current recycling system and the roles others must play in advancing recycling innovation.

  • Create frictionless supply chains.

Our industry is a global leader in supply chain innovation. GMA must help secure industry standing as a key stakeholder – and expert voice – on supply chain issues. Making up one-fifth of all freight, transportation capacity is an issue of immediate concern to the industry, and GMA will focus on the consumer impact of these issues, while quantifying the negative impact of recent mandates that have exacerbated transportation capacity challenges.

These areas are ideal starting points for the new GMA to earn trust with consumers, promote industry leadership and educate diverse stakeholders. Expect to hear more about these initiatives in the near future.

5. Engage Retailers Strategically

GMA is committed to determining and pursuing that which is in the best interests of manufacturers. We will seek opportunities to collaborate with retailers where our interests align. We will also expand our retailer relationships to be consistent with the customer base of members and representative of the totality of the retailer community.

Looking ahead, these five pillars will now guide GMA’s direction and decisions. We look forward to beginning this challenging, but critical work to transform our organization and create a new, powerful voice for the consumer packaged goods industry.



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