Equity Research

Finding Sustainability in Every Corner of the Economy

June 2019 / 3 min read
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A rising tide of consumers from millennials to baby boomers are now embracing the idea of sustainability in more and more purchases they make, supporting brands and products that are better for the environment and society. According to a benchmark 2015 survey by Nielsen, 66% of consumers will spend more on a product if it comes from a sustainable brand. Among millennials, the percentage is almost three in four.

So it's no surprise that investors and businesses are also embracing the idea. More and more companies are appointing chief sustainability officers and adopting a host of initiatives to be better global citizens—sourcing ingredients locally, using less fossil fuel, limiting their landfill, using and producing recyclable products, among a growing host of initiatives.

"They are doing it because it’s the right thing to do but it’s also good for business," says William Blair analyst Jon Andersen.

Freshpet, Aptar embrace sustainability

To illustrate the breadth and depth of the trend, Andersen cites two very different companies: Freshpet, a pet food manufacturer, and Aptar, which makes plastic caps and pumps for bottles and tubes.

Puppy eating dogfood

New Jersey-based Freshpet, a newcomer to the giant pet food industry, embraced the idea of social responsibility from the start. The company sources 70% of its ingredients within a 200-mile radius of its production facility. Freshpet Kitchens are landfill free and wind powered to cut fossil fuel use. The company has also planted 25,000 trees as it works its way toward a zero-carbon footprint by 2025.

"Not only do we have this mission and this focus on bringing fresh food to the pet food category, but we want to do it in a way that was good for pets, people, and the planet," Freshpet co-founder Scott Morris said during the company's investor day last year. "It's also important from a consumer standpoint because they feel that they're buying products from a company that's being thoughtful about the way that they're made."

Water bottle sitting in the grass

Aptar, named to Barron's 2019 Top 100 Most Sustainable U.S. Companies list, formed a task force a few years ago with a clear mission: replace its use of fossil-based resins to make plastic caps. Already, Aptar has launched several flip tops in North America made from recycled resins.

Aptar is one of 250 companies that signed on to a global commitment from the Ellen MacArthur Foundation to start building a "circular economy" for plastic.

In February, Aptar also became a member of the World Business Council for Sustainable Development (WBCSD). Both initiatives aim to find ways to re-circulate used plastic to keep it in the economy and out of the natural environment, especially landfills and oceans.

Aptar CEO Stephan Tanda said: "We are particularly interested in WBCSD’s innovative work in relation to the circular economy, including the Global Plastics Alliance."

To receive Jon Andersen's research reports on Freshpet or Aptar, contact your William Blair representative. View disclosure information.