Sustainability Shareholder Pressure Is Coming for Private-Label Brands

Packaging-reform resolutions at PepsiCo, Kraft Heinz and Amazon signal what retailers must tackle next

Published 12 March 2025 – Private Label Advisors Insights

In the last twelve months, the world's biggest CPG companies have been bombarded with investor resolutions demanding concrete action on plastic and packaging waste. PepsiCo, Kraft Heinz and Amazon each tried (and failed) to keep these proposals off their 2025 proxy ballots; the U.S. SEC ruled that shareholders have a right to vote on them.

Sources:

• Food Dive: PepsiCo, Kraft Heinz face off with shareholder activists
• As You Sow: SEC Rules Amazon Must Face Shareholder Proposal
• As You Sow: SEC Rules In Favor of Shareholder Proposal at PepsiCo

Store-brand teams might assume this is a "big-brand problem." It isn't. The same activists, pension funds and ESG index committees will soon turn their lens on retailers' private-label SKUs—especially lines positioned as "natural" or "better for you."

What just happened?

Why does the SEC keep siding with activists? Because packaging waste is now classified as a "material economic risk." Brands that ignore it face litigation (see New York's suit against PepsiCo: PepsiCo beats New York state's lawsuit over plastics pollution), eroding shelf share, and potential market-access barriers as states roll out Extended Producer Responsibility (EPR) laws.

Why private-label leaders should care

1. Retailers can't hide behind national brands anymore.
   If ESG funds win a 49 % vote at PepsiCo, the same investors will ask your board (or suppliers) why the store-brand salsa pouch is still non-recyclable.

2. Packaging specs are public.
   Amazon's plastic mailers went viral on TikTok long before the SEC ruling. See: SEC Rules Amazon Must Face Shareholder Proposal. Shopper scrutiny on retailer brands is identical—sometimes harsher because consumers expect "our store's brand" to share their values.

3. EPR fees will bite margins.
   Under new state laws, non-recyclable films attract the highest fee tier. Private-label SKUs—often priced on razor-thin margin—can't absorb those penalties without redesign.

4. Marketing upside is real.
   Target's Good & Gather touts curb-side-recyclable flex packs and sees lift in basket value. Early movers capture the "conscious consumer" without discounting.

Three packaging moves to pre-empt investor scrutiny

1 Switch flexible pouches to mono-material PE or fiber-based film

Mono-PE qualifies for the How2Recycle "store drop-off" label and is already accepted in many EPR fee schedules' lower tiers. Fiber pouches (with a plant-based barrier layer) are curb-side recyclable. Pilot runs show ≤ 4 ¢ per-unit cost delta at 100 K MOQ.

2 Design for mass-balance PCR (post-consumer resin) at the outset

PepsiCo's miss on its 2025 PCR goal is exactly what activists attack. See: PepsiCo Inc: Sustainable Packaging Policies. Baking a 30–50 % PCR spec into bid sheets today prevents last-minute reformulation costs later.

3 Publish an auditable footprint table—before you're asked

Investors love numbers. A one-page PDF that lists annual plastic tonnage, % recyclable in practice, and roadmap milestones can defuse proposals before they're filed.

PLA's role: spec-ready kits for retailer RFPs

Private Label Advisors builds recyclable & minimal-material spec packs that slot directly into your vendor RFP:

• Mono-PE, mono-PP and fiber pouch dielines with barrier options
• Supplier short-list vetted for SQF Level 3 + ISCC mass-balance PCR certification
• Cost model comparing virgin, PCR, and fiber at volumes from 10 K to 1 M units
• Label copy templates ("How2Recycle drop-off" or "Curbside Recyclable") pre-cleared with legal

By walking into your spring line review with PLA's spec kit, you show buyers and shareholders that your private-label program is ahead of PepsiCo-scale scrutiny—without the PepsiCo-scale bureaucracy.

Ready to de-risk your packaging before proxy season?

Schedule a no-obligation discovery call with Private Label Advisors.
We'll map your current SKU portfolio, identify quick-win sustainable packaging swaps, and deliver a board-ready roadmap—often in under four weeks.

Let's make sure the only surprise at next year's shareholder meeting is how fast your private label hit its sustainability goals.