Sustainability in the dairy processing industry focuses on implementing practices that minimize environmental impact and optimize resource use. Implementing sustainable practices can help dairy processing companies not only reduce their environmental footprint, but also contribute to a more sustainable food system.

However, implementing sustainability in the dairy industry presents several challenges, which often stem from the complex nature of dairy processing, supply chains and market demands.

Despite these challenges, many companies in the dairy processing sector are exploring innovative solutions, collaborating with stakeholders and adopting gradual changes to move toward more sustainable operations.


Area of focus

To gain insight into how dairy executives’ priorities have shifted over time, McKinsey & Co. recently completed its sixth annual survey of US dairy executives, conducted with the International Dairy Foods Association, revealing a shift in priorities for the dairy industry during Q4 of 2023.

The previous survey of dairy executives, conducted in 2022, showed that concerns were divided between growth, resilience and sustainability. But in the most recent study, sustainability moved to the center of the conversation. And while there has been progress on sustainability commitments and actions, challenges with addressing farm-level emissions remain.

About 75% of survey respondents said their sustainability efforts are motivated by their customers (retailers and other dairy vendors), and just under half said the same of consumers. However, interviewed executives said that consumers may not be willing to pay more for sustainable products, raising understandable concerns about the costs associated with sustainability initiatives.

Some signals suggest environmental, social and governance (ESG) programs could be growing in importance for consumers. In a joint analysis with Nielsen IQ, McKinsey found that yogurt and cheese products with ESG-related claims outperformed products without those claims.


Packaging solutions

Packaging in the dairy sector is a significant source of waste, and the transition to sustainable packaging options can prove challenging.

Suppliers are stepping up to offer their dairy customers support in these efforts. Earlier this year, packaging solutions supplier Amcor Flexibles North America announced a significant expansion of its printing and converting capabilities for the US dairy market to support customers’ needs for flexible packaging.

The installation of new equipment will aim to expand and optimize capacity while further increasing network reliability and responsiveness to serve customers, and support the conversion to more sustainable packaging.

”Amcor is committed to deliver innovation, service flexibility and agility that will ultimately enhance our customers’ experience,” said Derrick Sytsma, vice president and general manager for dairy, Amcor Flexibles North America. “This strategic investment represents the largest of its kind in Amcor Flexible North America’s extensive history within the cheese business and solidifies our commitment to the dairy industry, as well as continued support of our customers’ growth.”

The expansion complements Amcor’s comprehensive packaging portfolio, including technologies within the retail and foodservice offerings, and will support customer transitions to the company’s recycle-ready AmPrima Plus packaging line.

The company said this investment underscores its continued commitment to invest in the future of dairy packaging products to enhance capabilities, leverage new technologies and innovation, and deliver expertise and insights to its customers.

“We’re excited to be a true growth partner in helping our dairy customers navigate ever-changing market requirements, and anticipating and meeting their needs now and into the future,” Sytsma said.

 

Opportunity for innovation

Recyclability of packaging materials is an ongoing challenge for processors, but it also presents opportunity for innovation beyond food.

Cartons, made mostly of paper, a renewable resource from well-managed forests, contain some of the most valuable fiber in the recycling supply chain. When recycled, cartons can go on to have a second life as paper products, such as paper towels, toilet paper, and office and writing paper. It can also play a role in a growing manufacturing industry where they are used to make sustainable building materials.

The Carton Council is composed of four leading food and beverage carton manufacturers: Elopak, Pactiv Evergreen, SIG Combibloc and Tetra Pak. The organization works with others throughout the entire recycling supply chain to strengthen the infrastructure for carton recycling. The Carton Council is committed to diverting cartons from landfills to ensure their valuable material goes on to make new products, contributing to the circular economy.

Before the Carton Council’s establishment in 2009, carton recycling faced challenges in both the US and Canada. Limited access to recycling facilities and lack of awareness about carton recyclability contributed to cartons ending up as waste. The Council recognized the urgency and took on the mission of increasing carton recycling rates, reducing waste and promoting sustainable packaging solutions.

The Carton Council continues to grow a sustainable infrastructure for carton recycling nationwide and works toward their continual goal of adding access and growing recycling of cartons throughout the US. Since its formation, the number of households with access to recycle their food and beverage cartons through their local residential recycling program has grown by almost 240%.

Along with partners including Upcycling Group and Elof Hansson, the Council plans to launch a facility in 2025 that will convert 9,000 tons of used food and beverage cartons annually into sustainable building materials, such as roof cover boards and interior wallboard. This project aims to reduce waste and carbon emissions by repurposing the fiber, polyethylene and aluminum in cartons, while also addressing challenges like material supply and gaining wider adoption in the construction industry.

The Carton Council has set ambitious goals for the future. By 2025, the Council aims to expand carton recycling programs to 16,254 schools, increase the US recycling rate to 25% and elevate household access to carton recycling to 75%.

 

Ingredient sourcing

Food and beverage marketers are more mindful of ingredients they source, often with the intent to communicate an ingredient’s sustainability journey.

Many are looking for evidence of sustainable practices along the supply chain. The challenge is there’s no universal definition of “sustainable practices.”

The Federal Trade Commission has published its Green Guides, which are guidelines that caution against making unqualified environmental claims that may mislead consumers. As with all marketing, there are risks involved with making sustainability claims. The risks involve future regulation, as well as deceptive practice lawsuits filed by organizations policing claims.

Ingredient suppliers are more widely using third-party validation services to manage sustainability claims. The claims run the gamut of water stewardship to regenerative agriculture to upcycling.

“There is no standard or consistency in data collection across suppliers,” said Jennifer DuCray, sustainability manager, North America, for Kemin Industries, Des Moines, Iowa. “This lack of cohesiveness makes comparisons of ingredients dependent on assumptions that may not have the most accurate data. Validation is critical to reduce greenwashing across the ingredient segment so consumers have a solid understanding of what they are buying.”

For Kemin, sustainable cultivation methods include managing plant life cycles, minimizing inputs and using good agricultural practices. This enables the company to grow plants with more of the desired active molecules, with less land, water and other input usages.

“Focusing on shelf life is an approach that enhances manufacturing efficiencies, improves distribution channels and reduces food waste generated by manufacturers, retailers and consumers,” said Karen Winkowski, vice president, innovation, Innophos, Cranbury, NJ. “Extended shelf life lowers both the economic and environmental impacts of wasted food, helping to feed more people and sustain our planet.”