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LIVE from the ELC: CPGs Lean on OEMs to Help Navigate Sustainability, Workforce

A panel of packaging pros from Pepsi, Colgate, and ACH were asked how they’re tackling today’s challenges. Topping the list was earlier and more robust OEM participation, both in new sustainability projects and in selecting automation to replace labor.

From left, Stephanie Neil, OEM; Tony Vandenoever, Pepsi; Tom Heaslip, Colgate-Palmolive (retired); and Herb Dutra, ACH.
From left, Stephanie Neil, OEM; Tony Vandenoever, Pepsi; Tom Heaslip, Colgate-Palmolive (retired); and Herb Dutra, ACH.

How are CPGs and brands navigating the latest constellation of challenges related to supply chain, sustainability, and workforce? And how can their materials, automation, and machinery partners help them to better deliver to consumers the products they’re demanding in an efficient, safe, and ecologically friendly manner?

Stephanie Neil, Editor-in-Chief of OEM Magazine, set out to find the answers to those questions and more at PMMI’s recent Executive Leadership Conference, held at the end of April. She moderated a panel of heavy hitters: Tony Vandenoever, Director, Supply Chain Engineering, PepsiCo Beverages North America; Tom Heaslip, Colgate-Palmolive (Retired); and Herb Dutra, Head of Engineering and Commercialization, ACH Food Companies, Inc. They talked turkey about their ideas on successful partnerships, operator needs, automation demands, training and field service requirements, and more. Here’s what caught our eye during the panel.

CPGs’ self-imposed goals force OEMs to keep pace

Big CPG companies like Colgate-Palmolive, ACH, and PepsiCo have committed themselves to ambitious sustainability goals that are highly quantified and explicitly stated. Leaving themselves no wiggle-room for fudging numbers, these goals aren’t just aspirational or something to shoot for. They’re company directives with precise targets that will either be met, or unmet. Colgate, for instance, in 2014 set goals of no PVC, 50% recycled material, and 100% recyclable packaging by 2020.

Said Colgate’s Heaslip, “For anything that’s so quantified, in a company like ours, there’s an enormous amount of project management systems tracking [the goals]. It’s something that’s publicly reported. It's something that is CEO-relevant; he knew where we stood in all those numbers every moment of time. So, we had 400 projects just to deliver against those goals. And in 2019, before we had delivered on our 2020 goals, we were already coming up with a 2025 strategy, where we asked how we could build upon that further. … And it's only getting harder, to be honest. All of the easy projects were done in the first few years. What's left are the stragglers that we really don't have technical solutions to.”

That means that for people in packaging roles at CPGs and brands, meeting sustainability goals is an almost Sisyphean task. When one goal is met, another more ambitious one is set. This sends ripples up the supply chain—unless they’re brought in early to solve such problems together, OEMs are forced to reactively innovate to keep up. For instance, Heaslip told the audience of mostly OEMs that he knows Colgate could engineer bottles today that are lighter weight than any current bottling and filling equipment can run. But did OEMs know that if they weren’t involved in the project?

This fact demonstrates that there’s always a lingering potential for disconnect between CPGs and their suppliers. If CPGs are on a journey toward greater sustainability, OEMs—whose equipment is often designed to last decades—needs to be on a journey of their own. In the best case, both will be on the same path at the same time.

Pepsi’s Vandenoever agreed, citing a Pepsi project aimed at light-weighting, caps/closures on PET bottles. When new, lighter weight caps were introduced to existing packaging machinery, the equipment wasn’t gentle enough to handle the ultra-sensitive tamper-evident bands on the caps. The amount of scrap was unacceptable, and the cost of implementing new equipment that could handle the more delicate caps worked against the cost gains the brand was seeing by using less material in a lighter weight cap.

“Our R&D didn’t go to the OEMs that designed and built all of that equipment that’s between full boxes of caps, and the filler and applicator on the line,” he said. “They tested it in their R&D facility, and it was sufficient there. But it wasn’t when we got to the distances and the scale of real production environment. It’s also important to factor in the age of the equipment that’s on production lines, which isn’t always the same as in controlled environments.”

But for CPGs, capital isn’t always available to simply buy new equipment, and there are always downtime and upstream/downstream integration considerations and potential for further bottlenecks. Plus, machinery is intended to have a long life, and big CPGs have massive installed bases of aging, but still useful, legacy equipment. That’s another opportunity for OEMs and CPGs to innovate together, vis a vis aftermarket service and support. When Dutra of ACH is looking to run more sustainable materials on older equipment, he’s leaning on OEMs to help.

“We have to reverse engineer and be creative,” he said. “We have to use some food-grade duct tape.”

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