Sustainable FMCG Brands Leading the Green Wave in West Africa

Africa's total population is expected to reach 2.4 billion people by 2050, with Nigeria, the continent's most populous country, accounting for the largest proportion. While not as populous as Nigeria, Ghana’s population is also growing significantly, increasing from 24.7 million in 2010 to 30.8 million, according to the country’s last population census in 2021.

The populations of both countries are skewing young, mirroring the continent’s trend and pointing to a growing market for fast-moving consumer goods (FMCG). In tandem with population growth, the region's retail market has seen proportional expansion in recent years, even in the face of challenges posed by the COVID-19 epidemic and other disruptions.

As populations rise and climate change awareness grows, sustainability in FMCG and other manufacturing sectors becomes increasingly vital. This has prompted the establishment of overarching government policies and initiatives by FMCG industry players.

Let’s examine the prevailing policy landscape and some notable sustainable manufacturing companies in the region.

Government Policy on Sustainability in FMCG

In Ghana, the national development agenda, outlined in a 40-year roadmap known as the Long-Term National Development Plan of Ghana, emphasizes that sustainability hinges on the ability to maintain conscious policies and controlled resource utilisation by sustainable FMCG brands and others over a long period of time. Building upon this plan, Ghana has committed to reducing greenhouse gas emissions and overall environmental pollution.

Similarly, with a growing FMCG sector, Nigeria’s government is taking steps to improve sustainability. For example, it has adopted the International Sustainability Standards Board’s (ISSB) Sustainability Disclosure Standards , which require companies operating within its borders to identify risks and opportunities related to sustainability across their value chains.

Additionally, the country has a national climate change act that contributes to the implementation of its environmental sustainability strategy. This act outlines various sustainable initiatives and allocates resources specifically for climate action.

Private Sector Initiatives on Sustainability in FMCG

To align with evolving consumer expectations and government policies, many sustainable FMCG brands are adopting strategies that minimise their environmental footprint.

These include:

1. Vertical integration

Some retailers and manufacturing companies are integrating their supply chains and distribution channels to strengthen their market position and enhance sustainability in FMCG. This is particularly helpful in regions with underdeveloped supply chains, where integration allows companies to exert more control over sourcing, transportation, storage, and even packaging.

For example, Imperial, a DP World subsidiary, acquired Africa FMCG Distribution Ltd, a large regional distributor, to gain greater control over the region’s value chain and boost its market position. Similarly, Coca-Cola acquired Chi Ltd, a market leader in the fruit juices and value-added dairy industry, to increase its influence over beverage production and distribution in Nigeria.

2. Responsible sourcing by sustainable FMCG brands

Businesses have realised that ethically and sustainably sourcing raw materials and strengthening their supply chains can positively impact their bottom lines. This approach, which considers social, environmental, and economic implications, has a net positive effect.

One of these sustainable manufacturing companies In West Africa is Coca-Cola, which has prioritised sourcing practices that promote fair treatment of farm workers, protect ecosystems, and align with its Principles of Sustainable Agriculture.

3. Reducing carbon emissions

The reduction of carbon emissions is a primary focus for sustainable FMCG brands and green supply chain initiatives. Proctor & Gamble Africa, for instance, is embarking on an ambitious campaign to improve sustainability across all aspects of its operations, including supply chains and product life cycles. This includes a commitment to slash their greenhouse gas (GHG) emissions by 50% by 2030.

Unilever, another major FMCG player in West Africa, has established the Climate and Nature Fund, investing €1 billion over the next 10 years into projects that will accelerate decarbonization globally. The company is also exploring partnerships with suppliers who share its climate goals and are dedicated to reducing greenhouse gas emissions.

4. Water management

Governments and sustainable FMCG brands share a common concern for the preservation and management of water, a vital natural resource.

Water is especially crucial for production in the beverage industry, and therefore, responsible water management is essential. Recognising this, major companies in West Africa are implementing various strategies to ensure water sustainability in FMCG.

Coca-Cola Africa has committed to improve its water use efficiency by 20% by 2030. This commitment includes:

• Facilitating access to potable water for communities in which they operate.
• Implementing wastewater treatment to replenish water used in beverage production.
• Investing in the Replenish Africa Initiative (RAIN), which aims to improve access to clean water for over six million people on the continent.

Nestle is another sustainable FMCG brand that has taken steps to address water management in Central and West Africa, aiming to reduce wastewater discharge and ensure that all wastewater meets and exceeds regulations. They have also constructed an on-site wastewater treatment plant in their Tema facility in Ghana, which enables the reuse of 30% of treated wastewater, resulting in a 10% overall reduction in water consumption at the factory.

5. Renewable energy

Energy generation and consumption, particularly in regions reliant on fossil fuels, significantly contribute to GHG emissions. Transitioning away from non-renewable energy sources offers sustainable FMCG brands a substantial opportunity to reduce their environmental impact.

Recognising this, Unilever East and West Africa has pledged to power its operations with 100% renewable energy, including scaling up the use of heat pumps across its facilities. This is one of many sustainable manufacturing companies of companies shifting towards renewable energy.

6. Plastic waste reduction

Plastics, used in packaging throughout the FMCG value chain, have become a ubiquitous environmental concern.

To mitigate their plastic footprint, sustainable FMCG brands are taking proactive measures such as promoting waste collection, reducing plastic use, and encouraging recycling.

For example, Nestle Ghana has partnered with the Pure Water Waste Collection Association, and the country’s Ministry of Environment, Science, Technology, and Innovation to collect discarded plastics. As part of this sustainability in FMCG initiative, Nestle Ghana provided 40 tricycles and essential supplies like gloves and waste-picking tools to support recycling efforts.

Moving towards a more sustainable future with logistics

Sustainability is gaining traction, and the FMCG industry is not left behind. Industry giants are leading the way in implementing sustainable practices in accordance with government policies that encourage the greening of the industry and its supply chains.

As consumer awareness rises and regulations evolve, businesses will require greater visibility into their supply chains to understand their impact on the environment. This information can then be translated into concrete steps for determining the best approach for boosting their sustainability.

The logistics industry is similarly motivated by the goal of sustainability. Many logistics providers are focusing intently on several initiatives, including decarbonization, digital solutions, monitor carbon footprints, biofuels, and alternative sources of energy amongst many other factors of sustainability. In order to identify the ideal logistics partners for their sustainability goals, FMCG companies must delve deeper to get a better understanding of the logistics solutions offered by the providers that best suit the company’s own sustainability agenda.

To learn more about the kind of solutions Maersk offers, click here.