Nestlé invests in Closed Loop Leadership Fund

Swiss company Nestlé has announced that it is investing $30 million in the Closed Loop Leadership Fund, the private equity fund of New York City-based circular economy investment firm Closed Loop Partners. The investment is intended to help lead the shift from virgin plastics to the use of food-grade recycled plastics in the U.S. and is the first to use Nestlé's packaging venture fund established earlier this year. The packaging venture fund is part of Nestlé's overall investment of up to 2 billion Swiss francs designed to accelerate the development of sustainable packaging solutions.

"This investment is one of many solutions we are exploring to address the global plastic waste challenge," says Véronique Cremades-Mathis, global head of sustainable packaging, Nestlé. "It will help create a more sustainable recycling system and, at the same time, assist us in achieving our commitment to reduce our use of virgin plastics by one third by 2025. This is particularly important as increasing the use of recycled plastics could substantially reduce the environmental impact of our packaging."

The Closed Loop Leadership Fund is a private equity fund that was created to acquire companies along the value chain to build circular supply chains. The fund invests in companies that aim to increase recycling rates in the U.S. and keep valuable materials in packaging supply chains by integrating and improving all aspects of supply chains, from access, collection and sortation to processing, Nestlé says in a news release announcing the investment.

"It is important that we do our part to help keep recyclable materials out of landfills and increase recycling rates in the U.S., and this investment is a significant move in that direction. It is also a critical step in our effort to secure access to high-quality, food-grade recycled plastics which can be converted into new packaging material for use across our product portfolio," Steve Presley, chairman and CEO of Nestlé USA, says.

The investment will be used to finance the Closed Loop Leadership Fund's acquisition of well-established, best-in-class companies that are advancing the circular economy in the U.S., Nestlé says. The fund aims to increase recycling rates by an additional 25 percentage points in areas serviced by the portfolio companies.

"Nestlé's investment is a significant commitment to help modernize, optimize and capitalize circular economy infrastructure in the U.S. and harness innovative technologies to keep materials in manufacturing supply chains," says Ron Gonen, CEO of Closed Loop Partners. "In addition to the investment, Nestlé has committed to create an end-market for the food-grade recycled plastics processed through the companies we acquire. This will enable us to fully close the loop on valuable materials."

Through its investment in the Closed Loop Leadership Fund, Nestlé will have access to recycled plastics feedstock processed by companies in which the fund will invest to achieve greater volumes of food-grade recycled plastics for its packaging.

Nestlé says having access to high-quality food-grade recycled polyethylene terephthalate (PET), polyethylene (PE) and polypropylene (PP) will increase Nestlé's ability to incorporate recycled plastics into packaging across its food and beverage portfolio.

Nestlé uses PET in bottles for Coffee Mate and Starbucks creamers, in trays for Stouffer's entrees and across its bottled water portfolio, which has doubled the amount of rPET used since 2019 across its still water portfolio in the U.S. to 16.5 percent. The company uses PE in rigid canisters of Nesquik powder, and PP in Lean Cuisine trays and in the new Gerber Incredipouch, a single-material baby food pouch designed to be recyclable. Flexible films appear in a variety of packaging formats, including bags of Nestlé Toll House morsels and the wraps on refrigerated cookie dough.

Nestlé Waters North America previously invested $6 million in Closed Loop Partners' Infrastructure Fund, which finances recycling programs and infrastructure improvements to create a circular economy in the U.S.