According to recent studies by the International Bottled Water Association (IBWA) and the market research analyst firm Canadean, bottled water will overtake carbonated soft drinks (CSD) as the leading liquid refreshment beverage (LRB) between 2016 and 2019 – outpacing earlier assessments. This trend is being driven by growing consumer interest in healthier choices, the studies revealed.

Ask the CPO - Nestle Waters - Jim Markano Image - FullSizeRenderUnited States per capita consumption of bottled water stood at 32 gallons in 2014, up 4 percent from 2013, according to IBWA.
According to industry figures, bottled water uses far less water and far less plastic in production than any other LRB. Even so, translate the 10.9 billion gallons of water to meet demand into bottles and we have some packaging to talk about!

Fortunately, we had the opportunity to speak with Jim Markano, Head of Procurement at Nestle Waters, NA. Nestle Waters is the largest bottled water company in the U.S. and the third largest non-alcoholic beverage company overall. The major part of Jim’s role involves packaging. He and his team of 16 are responsible for every aspect of producing the pack.

With an educational background in engineering and a 25-year career in the beverage industry – at Nestle Waters since 1997 — Jim has developed experience across the supply chain. Today he coordinates packaging from R+D, to manufacturing, to marketing in what he describes as a collaborative and cross-functional process.

Since the Chief Packaging Officer of the future could come from any of the many functional areas that involve packaging, we were pleased to get Jim’s fascinating perspective. In the course of a wide-ranging discussion, we learned that at Nestle Waters, packaging is already a c-level conversation. We appreciate Jim’s sharing his insights about packaging today and in the future. Here’s what we talked about.

Q. At Nestle Waters, is packaging viewed as strategic, operational – or both?

A. Packaging is viewed as both strategic and operational here. Packaging has played a huge role in our strategic sustainability efforts. We’ve light-weighted our bottles, introduced recycled PET materials and eliminated corrugated. Also on the strategic side, in our extremely competitive industry, packaging helps us to differentiate our products for our various sales channels. By offering a wide variety of bottle sizes, we meet the differing needs of club stores, convenience stores, restaurants, grocery and so forth.

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On the operational side, we’re always working on ways to improve packaging performance both in the manufacturing process and the consumer experience. If low cost packaging materials don’t run well in the factory, they’re of no value. You’ll pay for it ten times over someplace else. Consumers also have to perceive packaging quality. We develop a value proposition for packaging at both the top and bottom lines.

Q. How far up the ladder do packaging discussions go at Nestle Waters?

A. It depends on the project, but many times discussions go all the way to the top. Our executive team – including our CEO — is very engaged in packaging efforts as they relate to sustainability, cost and customer experience.


Q. In your view, what is the greatest obstacle or bottleneck in the packaging process? How do you keep it moving along?

A. The greatest obstacle is to find and maintain a balance using less packaging for sustainability, finding cost savings and providing enough value to satisfy the consumer. Regarding bottlenecks, when trying to do anything that’s new or involves some change there are always as many opinions as there are people involved in the effort. This is a good thing and we have robust discussions to come to the right decisions. For every change there are pros and cons. Light weighting a bottle is great for sustainability but a lighter bottle gives more and makes a sound. We debate and test internally to determine if this will be a problem.

We keep our process moving along by not resting on history. We recognize that with evolving technology, what wasn’t possible a few years ago may work well today. Who would have thought that we could make an acceptable eight gram PET plastic bottle? But now we can. We help people get past pre-conceived notions to an evolved opinion. It’s important to be forward looking.

Q. We know that Nestle Waters has led packaging innovation in the past, including light weighting bottles for sustainability. How does packaging tie to innovation at Nestle Waters today?

A. Packaging is heavily tied to innovation here. Regardless of the initiative or where it originates, it always involves packaging in one way or another. Sometimes marketing comes to us with new packaging ideas and we help them match the desired features with pricing or manufacturing realities to evaluate whether it adds enough value. Sometimes a vendor will bring my team an idea and we’ll present it to marketing or other departments. Innovation flows in both directions.

One area that’s driving innovation today is how to get greater recycled PET content into our packaging. We’re doing this even though it’s still a bit unclear how important it is to consumers. We believe it’s the right thing to do.

The biggest challenge is getting enough quality material to keep up with demand. We’re working on improving this over time, given that for many towns it’s still not economically feasible to institute recycling programs. We’re trying to innovate around community recycling. For example we’re testing our Ready Refresh home and office delivery business to close the gap and get more bottles back in.

Q. What benefits do you see in tying packaging to sustainability efforts?

A. All of the best sustainability efforts actually save you money. Involving the packaging group helps to quantify that savings and justifies making additional capital investments in further sustainability initiatives, for example acquiring new manufacturing equipment that runs lighter weight materials.

There are softer benefits as well. Sustainability efforts involve change so may also involve change management initiatives. We make our internal teams aware of why we’re making a change and what it means for both our business and our customers. We have about 7000 employees and they can all be ambassadors when they understand why we’re doing something.

Of course, we do performance testing to check for unintended consequences. When we take something out of our packaging we make sure it’s not going to have a negative impact. We involve applications, logistics and quality assurance teams so that we assess and understand the costs as well as the financial and PR opportunities. This discipline really benefits our overall quality mindset.

Q. How would you define the role of a Chief Packaging Officer?

A. The success profile of a Chief Packaging Officer goes beyond engineering expertise. It would also be someone who is part CFO for cost control, part marketing manager to assess whether consumers will want and like the things you’re pursuing, part sustainability officer to optimize those efforts, which are the way of the future, and part salesman because you have to sell what you’re putting through internally to accomplish anything. If you’re too focused on staying within one functional silo, you can’t Ask the CPO - Nestle Waters - Image - Spring Outfall Ruby Mountainsucceed. He or she would have to step back and view packaging from the perspective of different roles in order to successfully bridge operational silos.

Q. What do you see as the most critical issue in packaging today?

A. We have to find new ways to push the envelope at the renewable/sustainable level. We need to improve the quantity and quality of recycled materials so that they work as well as or better than virgin materials and that we have enough of them. As we forge new ground as a society, technology will get better and so will materials and the number of uses for them.

Q. How do you view the role of technology in today’s packaging process?

A. Technology is absolutely critical. We couldn’t run current bottles with drastically reduced plastic content without new manufacturing technology. We can now make case packs without corrugated boxes. We have a new product development tool that we use worldwide to manage our projects, whether they are simple or complex, as well as to communicate to keep everyone in the loop and get feedback.

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Q. What haven’t we asked you about packaging that you’d like to add?

A. What’s the one thing the average person can do to help packaging evolve? My answer to that is, “Recycle more.” That’s what will drive packaging efforts going forward – giving us the infrastructure to create innovations that will help us to do better. You can’t use recycled materials if not enough people are recycling. We’re all in this together.


Ask the Chief Packaging Officer is a Q and A feature that explores the views of packaging leaders from CPGs, retail brands and pharmaceutical companies. They share their experience and their ideas about the current state and future evolution of packaging and offer insights about what the packaging leadership role can look like within the enterprise.

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