Sourcing FSC certified paperboard helps global carton manufacturer engage with customers and mitigate risk. Since introducing its first paper-based beverage packaging more than 50 years ago, Tetra Pak® has become a global leader in its industry, and that leadership has included a major commitment to sustainability.
Tetra Pak manufactures its distinctive beverage cartons out of 'liquid paperboard' - a flexible paper product coated with plastic - that it purchases from an array of suppliers, more and more of which are earning Forest Stewardship Council (FSC) certification. According to Mario Abreu, Tetra Pak International's Environmental Performance Director, the company's ultimate goal is for all of its packaging to be FSC certified.
"We haven't done this to specifically please an NGO," Abreu said. "We did it because we wanted to enhance our ability to position our beverage packaging." Abreu explained that Tetra Pak competes with plastic and metal packaging for clients in the food and beverage industry, and one of the attributes of its cartons that the company uses to make sales is the fact that they are primarily made of wood fibre, which is a renewable resource. To ensure that the company's raw materials come from sustainable, legal operations and to enhance the credibility of its marketing strategy, Tetra Pak decided to use a third party certification, and after consulting with its suppliers, the company chose FSC.
"We purchase liquid paperboard from suppliers in North America, South America, Scandinavia, China, Pakistan, India and Japan, so we wanted one international standard that could provide guidance to local standards," he said. "We decided that to be able to communicate externally effectively, there was no other certification standard that we could use but FSC."
Nearly half of the cartons the company manufactures are made of wood fibre from FSC certified operations, which has helped Tetra Pak to minimise risk, engage with its customers, and strengthen its brand.
Since it was founded in 1994, FSC has become the world's leading sustainable forestry certification body with more than 185 million hectares of forests and tree plantations certified under its standard by the end of 2014. Marcelle Peuckert, FSC Business Development Director, explained that FSC has worked with partners ranging from Tetra Pak to the environmental organization WWF to raise consumer awareness of its certification and mission. FSC also has 25 national websites and is increasingly using social media to increase the visibility of its logo.
Peuckert explained that FSC undertook consumer research as part of global brand positioning in 2014 that included online surveys of more than 9,000 consumers in 11 markets. The research found that consumer recognition of the FSC logo has grown significantly in recent years, reaching more than 50% in markets such as Germany and the UK. The survey revealed that consumers are concerned about issues such as climate change and environmental pollution and that 80% of them believe that companies should be responsible for solving such problems. However, because consumers don't always believe what companies tell them, third party certifications play an important role.
Abreu explained: "Most of the products we package are associated with nutrition, so our message is normally geared toward the family shopper. Our motto is 'protect what's good' and I think that is very much in line with FSC, which works to protect the forest. So FSC enhances the goodness of the packaging. There is a linkage between the package protecting the food and its nutrients, and at the same time coming from a source that we are doing our best to protect as well."
A survey conducted by TetraPak completed by 7,000 consumers in 11 countries in 2013 revealed that 37% of them regularly look for environmental labels, though more than half of consumers in Japan and South Africa look for such logos.
"More than 50% of the consumers we surveyed believe that certification seals, like FSC, are the most trusted information on these issues. I think there is a business benefit for responsible companies, in that FSC certification increases the level of consumer trust with regards to their social and environmental credentials."
While the FSC logo helps Tetra Pak to engage consumers with positive messages, the FSC standard has helped the company to avoid negative press, NGO campaigns or legal problems, because it prevents wood fibre from non certified, controversial sources from entering its supply chain. Some of Tetra Pak's liquid paperboard suppliers own productive forests or tree farms, most of which are now FSC certified, but many other suppliers purchase timber from independent forest owners, which makes for complex supply chains. Abreu stated:
"One thing that FSC has improved for us is the knowledge of the sources of the wood that our suppliers are using. We now have more information and more transparency about the geographic origin of the raw materials."
"The main risk for us is that one of our products could be linked to some kind of illegal harvesting or deforestation. We don't believe that we have that in our supply chain, but FSC helps us to prove it. We also have an internal auditing system, but the FSC standard helps us to be sure," Abreu explained.
Abreu added that FSC certification also helps Tetra Pak to comply with laws regulating the import of wood products, such as the U.S. Lacey Act or E.U. regulations. "Many of the steps that we have to take to comply with these laws are covered by the FSC standard, and it helps us to have third party verification by a respected certification body," he said.
Peuckert noted that risk mitigation is one of the main reasons that companies choose FSC certification. The organisation strives to make its chain of custody system as rigorous as possible and welcomes FSC's innovations such as DNA testing of wood fibres.
Sustainable Supply Chains
Abreu noted that one of the bottlenecks for reaching Tetra Pak's goal of 100 percent FSC certified packaging is that its suppliers purchase timber from thousands of small forest owners. Tetra Pak has consequently worked with WWF and other partners to enable and expand FSC certification, including among small forest owners and communities.
The experience of the Brazilian paper and cardboard manufacturer Klabin - one of the first Tetra Pak suppliers to get FSC certified - confirms the business case for FSC certification. Klabin was the first paper-product company in Latin America to earn an FSC certification, in 1998, and since 2009, all of its forestry operations and its entire chain of custody are FSC certified.
According to the Klabin's Commercial Director, Edgard Avezum, Tetra Pak was the only customer interested in FSC certified product when Klabin began getting its operations certified, but in recent years, a growing number of customers have asked for it. "I would say that FSC certification is important for more than 80% of our sales.
When we talk to people in the food industry, it is becoming obligatory," he said. "A significant part of our paperboard sales are leveraged by this certification. FSC certification has definitely helped Klabin to grow." Abreu observed that for Tetra Pak and its suppliers alike, FSC certification has proven to be a good business decision:
"We have a stronger position in the market, a stronger position with our customers. For us, we believe that the benefits have outweighed costs. We have had higher costs, but FSC certification has also provided us with value. That's one of the reasons that we keep moving forward."
Originally published 2014