One Grocer Wanted to Give Up Plastic. It Got Rotting Bananas.

One Grocer Wanted to Give Up Plastic. It Got Rotting Bananas.

Iceland Foods, a well-known supermarket chain in the U.K., is discovering just how difficult it is to eliminate plastic from its shelves. 'We're not going to go from A to Z like a flip of a switch.'

Iceland has roughly 1,000 stores across the U.K. Bloomberg
Iceland has roughly 1,000 stores across the U.K. Bloomberg

When one of the best-known supermarket chains in the U.K. decided to remove plastic from its products, it hadn't anticipated a spike in shoplifting.

Yet that is what happened when Iceland Foods Ltd. started selling steak in recyclable paper trays. Some customers bent the pliable containers in half and stuffed them down their trousers, executives said. Such theft wasn't as easy when the steaks came wrapped in more rigid plastic packaging.

Iceland, a frozen-food-focused grocer that has roughly 1,000 stores across the U.K., is grappling with a number of unexpected challenges as it races to meet a self-imposed target of scrapping single-use plastic for its hundreds of store-brand products by the end of next year.

So far it has cut or eliminated plastic on dozens of products -- from fish and chicken to apples and berries -- but executives say they may not achieve the target in time.

Disentangling plastic packaging from food can be exceptionally hard in the best of times. A surge in demand for plastic-wrapped food during the pandemic and recent supply-chain disruptions caused by the war in Ukraine are making this objective even harder.

More-expensive paper packaging is proving to be a liability at a time of rampant inflation, particularly because Iceland typically caters to more price-sensitive consumers.

The zero-plastic drive also produced a series of unintended consequences that demonstrate how difficult it is for any company to shed plastic packaging entirely.

When Iceland wrapped bananas in paper bands instead of plastic bags, the fruit rotted more quickly or snapped off. When it packed bread in opaque paper bags, sales fell as shoppers balked at buying something they couldn't see. When it punched holes in paper bags filled with potatoes to make the contents more visible, the bags ripped.

"You walk into our stores, it's still a wall of plastic and that's frustrating as hell," said Iceland's managing director, Richard Walker, the son of the company's co-founder. "We're not going to go from A to Z like a flip of a switch."

A surfer's mission

Plastics and food have a long and complex relationship. After World War II, plastics such as cellophane played a pivotal role in creating the modern grocery store, allowing retailers to bring precut, pre-wrapped meat, fish and produce under one roof and obviating the need for counter-staff at butchers, fishmongers and greengrocers.

Concerns about a lack of recycling, litter and greenhouse gas emissions from plastics began swirling in the 1970s, accelerating toward the end of the following decade and picking up momentum again in recent years.

That is particularly so in the U.K., Iceland's home country.

A documentary by veteran broadcaster David Attenborough sparked a national outcry about plastic waste, spurring the government to take a leading role in trying to curb it.

In April, Britain implemented a tax on packaging made from non-recycled plastic. The country is also looking to shift the full cost of handling the waste generated by packaging to the producers and retailers who make and sell it.

The measures could serve as a blueprint for other countries, including the U.S.

Iceland has a history of trying new approaches.

British businessman Malcolm Walker started the company in 1970 as a side hustle separate from his day job at a Woolworths store, breaking up large packs of frozen burgers and fish fingers to sell them loose from a single store near the Welsh border.

His wife -- who worked the checkout -- named the company Iceland after its focus on frozen goods. Frozen food is now roughly one-third of what Iceland sells.

Iceland became the first big grocer in the U.K. to ban genetically modified ingredients as well as artificial colors, flavorings and monosodium glutamate from the foods sold under its own label.

And it stopped using palm oil -- which is widely linked with deforestation -- for its own-label brands, though it recently restarted this after the war in Ukraine hit supplies of sunflower oil. It also installed reverse vending machines for the recycling of plastic bottles in its stores.

This current zero-plastic campaign is a personal project for the co-founder's 41-year-old son, a keen surfer who chairs a U.K. nonprofit called Surfers Against Sewage and says plastic in the ocean disgusted him.

"We're also very aware that as a supermarket we're terribly responsible for this," he said.

The younger Mr. Walker joined Iceland as a shelf stacker and cashier in 2012 and took over Iceland's sustainability efforts five years later.

Iceland's 2023 zero-plastic pledge was made in 2018. The company estimates costs to handle its plastic packaging waste could jump by more than 10 times if it didn't take action.

Few grocers have taken the same approach. Many have focused instead on making sure their packaging is recyclable or rolling out niche refill programs allowing customers to bring their own containers to fill up on products such as pasta or shampoo.

Iceland made its decision to focus on plastic elimination partly because recycling faces major challenges. Analysts say poor sorting infrastructure, dirty material and a lack of buyers mean little food packaging actually gets recycled into new packaging in the U.K., the U.S., and the rest of the world.

To achieve its goal, Iceland created 11 working groups focused on different types of packaging such as plastic punnets, trays and lid pots, and wrote to more than 400 suppliers asking for help.

The retailer also tried to shift shopper attitudes with advertising campaigns such as "Too Cool for Plastic," telling consumers how much plastic they are saving by, for instance, switching to paper bags.

Paper instead of plastic has become a key part of the campaign even though many waste-reduction advocates say paper has its own environmental drawbacks. For instance, paper can result in higher carbon emissions through the production and transport process, and can only be recycled four to six times, degrading in quality each time.

For products such as beef that generate high carbon emissions, the first priority should be using packaging that preserves the meat, even if that is nonrecyclable plastic, said Helen Bird, head of business collaboration at U.K. waste-reduction nonprofit WRAP.

Iceland says paper is a renewable resource and trees can be grown sustainably.

"Looking at carbon does not take into account the incredibly detrimental impact of plastic on the environment and ecosystem," said Stuart Lendrum, Iceland's head of packaging. "If the plastics industry got its way and took a purely carbon approach we'd wrap the planet in cling film."

The banana experiment

Scrapping plastic is particularly tricky for a number of products Iceland offers. Bacon that isn't wrapped in plastic quickly discolors, salad leaves wilt and unwrapped cucumbers rot more quickly.

When Iceland first replaced the roughly 10 million plastic bags it used for bunches of bananas with paper bands, the switch lasted just a couple of months. The bananas shrank 20%, snapped off and rotted more quickly.

The grocer scrapped a separate trial selling loose bananas and other produce after customers found it inconvenient and sales dropped 30%.

It later ran several trials in the U.K., packing the fruit in paper bands that let it tally up the concomitant food waste, testing which displays work best in stores and assessing the impact on sales.

Iceland then shifted to running tests with banana suppliers in the Caribbean that agreed to change machinery to apply paper bands.

To limit how much the bananas are touched and bruised, suppliers put the banded fruit in plastic-lined cardboard boxes that are shipped to ripening centers in the U.K. When they finally arrive at Iceland stores, the same boxes are lifted onto shelves, leaving the fruit untouched.

But sales of paper banded bananas are "significantly down" compared with the same product in a plastic bag and Mr. Lendrum said Iceland isn't sure why.

Still, he believes customers will get used to the new format in time. "We haven't given up."

Despite these efforts, Iceland ranked last in a 2021 report from Greenpeace and the Environmental Investigation Agency that examined U.K. supermarket efforts to slash plastic.

The nonprofits ranked grocers on a range of approaches, from transparency about plastic use to plastic reduction commitments.

Mr. Walker said the analysis was flawed because it favored larger supermarkets that can put pressure on branded suppliers to reduce plastic, and that it included refill programs that Iceland doesn't offer.

Iceland has made other adjustments to move past some stumbles. After introducing paper potato bags with die-cut holes, it switched to bags with smaller punched holes to prevent tearing on machines or while in transit.

For many of its products, Iceland is also working with packaging suppliers to use paper coated with a thin layer of plastic that can be later separated at paper mills.

"The paper does all the physical hard work and the plastic provides the barrier but nothing more," said Mr. Lendrum, Iceland's head of packaging.

The greasier the product, the more plastic it needs to stop the grease seeping out of the pack. A paper bag for frozen shrimp needs a thinner coating than one for chicken nuggets, for instance.

For some products -- such as pet food, which needs high grease resistance but also an oxygen barrier -- plastic-coated paper isn't suitable, said Falk Paulsen, sales and business development director at Mondi, one of Iceland's packaging suppliers.

Even foods such as dried pasta benefit from plastic that offers a water-vapor barrier preventing shrinkage, he added.

For now, Iceland is absorbing the extra expense of swapping in paper for plastic, though Mr. Lendrum is counting on costs dropping once Iceland scales up the effort.

"You're trialing this stuff against plastic that has been operating at scale for 30 to 40 years and been optimized to perfection," he said. "You have to invest."

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