Case Study | 31 December 2025
From Crisis to Circularity: How the Consumer Packaged Goods Company Reinvented Its Supply Chain for a Sustainable 2035?
Posted by : Preeti Wani
The present era is readily defined by eco-conscious consumers, wherein a sustainability strategy by a notable U.S.-based consumer packaged goods company almost precipitated a collapse in its overall operations. The unexpected shift from plastic to paper-based packaging across its huge portfolio, which is deliberately fueled by environmental targets, effectively disclosed severe vulnerabilities in its international supply chain. Besides, unidentified raw material volatility, along with fundamental product integrity risks, resulted in significant financial loss and eroded customer trust. Therefore, this case study has detailed the strategic consultant's intervention from Research Nester, providing in-depth and progressive solutions, which are essential to overcome the crisis and also reposition the organization as a forward-thinking and resilient leader in the sustainable packaging industry by 2035.
An overview:
- The consumer goods plc company is located in Chicago and belongs to the food and beverage sector. Founded in 1985, the organization markets, distributes, and manufactures a comprehensive array of grain-specific snacks, a line of beverages, and ready-to-eat meals. Its overall products are purchased and enjoyed by customers across more than 250 nations, which has generated yearly revenue of USD 50 billion.
- In a tactical move, which is readily aligned with worldwide sustainability, the company declared in June 2021 its intention to shift its overall product line to completely paper-specific packaging by the end of 2022. The approach was unveiled to the acclaim of environmental groups. However, the full-scale plan failed to cater to the immense complication of high moisture and liquid content products.
- The organization’s supply chain system was rapidly halted by volatility in raw materials, especially recycled and virgin pulp. Geopolitical challenges also affected timber exports and enhanced competition from other nations, which resulted in a 125% price surge for quality packaging pulp between mid-2021 and 2022.
- Despite the paper packaging being of high quality, there was vulnerability to temperature and humidity fluctuations during storage and transit. By October 2022, there has been an increase in consumer complaints by 305%, with different reports pertaining to compromised structural integrity, such as off-flavor beverages, spoiled snacks, and soggy boxes, owing to microbial contamination and oxygen ingress.
- In terms of the economic impact, the consumer packaged goods company was unable to produce suitable and viable stock to cater to the market’s demand. Eventually, the organization’s market share was readily lowered by 20% in the second quarter of 2022, and the yearly revenue for 2023 plunged to approximately USD 40 billion.
- Identifying the restrictions of its internal management team, the company’s board sought to gain international consultancy from Research Nester in December 2022 to effectively conduct a large-scale diagnostic of the supply chain disruption and develop a suitable recovery approach for its operations.
The Story
The consumer goods plc company developed its reputation on innovation and quality, with its vision statement featuring a standard commitment for environmental stewardship, wherein packaging plays a pivotal role in safely delivering products while reducing ecological impact. Its corporate objective focused on a multifaceted strategy to ensure suitable package design, sustainability prioritization, stringent food safety administration, preserving product quality, cost-effectiveness, and revolutionary customer preferences.
Therefore, driven on this goal, the organization’s leadership effectively set a standard target, with the intention to completely make its packaging processes biodegradable, compostable, and recyclable by the end of 2023. Hence, this efficient transition to paper was a public relations success on one hand, but an operational disruption on the other. Besides, the research and development (R&D) department in the company deliberately failed to conduct generous real-world and large-scale testing. In addition, they underestimated fragility in the supply chain system, which was extremely strained, owing to international demand, and overestimated the capabilities of paper-specific materials against environmental aspects. Meanwhile, experiencing a surge in loss and diminished brand image, the management was aware that internal solutions are not at all sufficient. Therefore, Research Nester was effectively brought in to conduct a robust post-mortem, demand analysis, and prescribe a data-based solution to ensure future growth and development.
Our Solution:
The analytical team from Research Nester effectively conducted a rigorous audit for 3 months, and their ultimate conclusion was that the packaged goods plc company’s actual error was undertaking the control of a mission-critical component in packaging. The solution demanded to regain control, successfully embrace technical advancement, and implement a pragmatic and phased approach.
- Vertical adoption through in-house manufacturing: Research Nester’s analytical team integrated for a suitable capital expenditure of USD 2.5 billion to develop automated and in-house packaging manufacturing infrastructures across Asia, North America, and Europe. This projected to shield the organization from volatility in raw material expenses, diminish logistics costs, lower lead times by approximately 45%, and ensure a smooth supply chain system. Besides, by 2035, the objective was to source at least 75% of packaging needs internally.
- Technological jump to aseptic packaging: For the high-moisture and beverage food line, Research Nester suggested a probable transition to aseptic packaging that readily utilizes a polyaminate layer structure. This acts as a suitable barrier against light and oxygen, which are the two essential agents for product degeneration. Additionally, this process includes product packaging and sterilization in separate ways with high-temperature steam in a sterile environment. This has further extended the shelf life for up to a year without the need for refrigeration.
- Developing a circular value chain: Instead of only utilizing recycled materials, Research Nester recommended creating a positive value chain, which involved collaboration with the inclusion of municipalities and waste management organizations to ensure a closed-loop system where the company can tend to participate in and fund collection and processing post-consumer packaging. This secured a sustainable and cheap paw material source, along with boosting the organization’s green credentials.
- Portfolio creation with smart packaging: The consultant firm further suggested revolutionizing the product portfolio by implementing smart packaging technologies, including QR codes to link temperature-sensitive indicators and sustainability stories that display product freshness. This, in turn, aligned with modernized consumer demands for innovation and transparency, thereby permitting the company to provide a premium price.
- Agile and phased integration: The consultant firm also suggested abandoning the big bang strategy, through which the 2035 target could have achieved complete sustainable packaging. This permitted the company to evaluate the newest technologies, ensure consumer accessibility, administer capital allocation, and combat repeat system failure.
Results
The consumer packaged goods company successfully adopted Research Nester’s tactical blueprint with standard execution by implementing an agile and phased strategy, which commenced with its largest margin beverage lines. By 2024, its in-house aseptic packaging infrastructure was operational in Los Angeles by stabilizing the supply for the overall market in North America.
Moreover, the transition to aseptic packaging achieved overwhelmingly optimistic customer feedback and a subsequent decrease in product recalls and spoilage, thereby restoring the brand's trust. Besides, the aspect of investments in the circular value-chain developed standard private and public collaborations and ensured a cost-effective and stable stream of recycled materials. By 2035, more than 85% of its packaging is anticipated to be produced in-house, as well as through controlled joint ventures, thereby mitigating its overall supply chain to international shocks. Meanwhile, despite the painful risk, an effective shift resulted in securing the organization’s market position, not only in food and beverages but also as one of the leaders in sustainable, resilient, and progressive supply chain management.
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