The untapped business potential of reusable packaging
How collaboration is key for moving toward a reusable packaging paradigm
Remember the time when milk was delivered to your door in reusable glass bottles? If not, you were probably born during the plastics-era, which began about 50 years ago. Until the 1980s, glass or cotton bags were the go-to packaging materials for many products, such as milk and flour. Today, plastic has taken over. In 2018, 40% of the 360 million tonnes of plastics produced globally were converted to packaging. Prized for its durability and ultimate convenience, the plastic addiction from business to consumer is proving hard to shift. But the increasing presence of post-consumer plastic littering the natural environment is a sobering reminder of the extent of damage our love-affair with plastic has delivered. Ultimately, we cannot fix this with recycling alone. Alternative materials and models such as biobased packaging and reuse offer a prime opportunity to extend the lifetime of valuable materials and deliver financial savings to businesses.
The case for reusable packaging
If we succeed in building and scaling reuse systems, they will outperform single-use systems. This not only benefits the environment but also businesses. About 95% of the value of plastic packaging material (€70 to €105 billion annually) is lost to the economy after a very short first-use cycle. Most of it ends up in our environment. In contrast, research and on-the ground experiences with reusable packaging by Searious Business, a solution provider for zero plastic waste practices, show yearly financial savings of up to 30% compared to throw-away versions. Thus, reusable packaging is not only key to achieving a circular economy and solving the plastic pollution problem, but equally presents untapped business potential. To grasp this potential, business must explore collaborations and capacity sharing to achieve wide-scale success and profit.
Benefits of teaming up
Only when key stakeholders align their efforts, can the industry change towards a paradigm of reuse. Replacing single-use with reusable packaging may seem straightforward — technically speaking. Most reuse concepts, such as ‘bring your own’ are rather simple. However, our current packaging system is geared toward single-use packaging.
Take the food sector, for example. In today’s fast-paced world, ready-made meals are the preferred option for many consumers. Producers parcel ready-made food in small portions in thoughtfully designed packaging, which ends up in the bin soon after consumption. Reusable packaging provides an environmentally friendlier, financially viable alternative: Together with three major retailers, Searious Business has identified opportunities to reduce carbon footprint by 43 tonnes per year through reusable food containers. Financial pay-offs have appeared within eight months.
However, these results cannot be achieved alone. They require close collaboration with waste management players, cleaning facilities and logistics companies. Where the packaging was previously disposed of, the retailer now needs to arrange collection points, ensure timely collection by the cleaners, and likewise timely return so that the packing can be reused. The retailer also needs to invest in marketing the benefits and exciting consumers about the opportunity to change to a circular packaging model, so that the system is well used and adequate scale can be realised to make a successful change. Numerous stakeholders need to engage in coordinated actions to reduce plastic waste and gain financial benefit for all parties involved. For reuse platforms to be financially viable and make an impact, scale up through collaboration and capacity sharing is inevitable.
How to get started?
As the above example demonstrates, collaborations are crucial for reuse endeavours. But how can a business get started? Circle Economy’s guide for collaborations in a circular economy directs businesses through the process of identifying attractive partners and establishing successful partnerships.
The impact organisation found that in scoping a potential new collaboration, businesses first need to understand the local context, market and material flows. This includes relevant legislation, consumption habits, the distance to sourcing, and the existing reuse infrastructure, which can vastly differ between locations.
Choosing the right partner to implement reuse packaging systems further depends on the company vision. Once a business has a clear vision for the future, it needs to assess which capabilities and resources are needed to reach this vision and what can be filled internally. Gaps identified can then be filled by partners.
Crucial roles a partner can take
Based on the gaps identified, businesses can determine which type of collaboration they need to make the circular transition happen. To illustrate this process, we identify three major roles that a reusable packaging partner can take on, as well as five significant characteristics.
1. When McDonald’s and Burger King joined food delivery platform Deliveroo, they did not only want to meet evolving consumer demands for mobile ordering. They also recognised the benefits of serving as each other’s impact extenders. When competitors collaborate to reach common goals, they can learn together, overcome hurdles, increase volume and scale, share investments, or establish standardisation of packaging. Such ‘coopetition’ is often pooled under reuse platforms like Deliveroo.
2. Businesses looking to introduce reusable packaging can also partner with companies that serve as promoters, and help to make reusable packaging accepted and ordinary (again) — or even desirable — through marketing campaigns. Social enterprise Dopper, known for its reusable water bottles, has collaborated with the Amsterdam-based Van Gogh museum to create a Special Edition of their bottles with prints of the famous painter’s works.
3. Returnable packaging schemes like BarePack meal containers in Singapore and RePack packages in Europe work much in the same way that library books are borrowed, enjoyed and returned. With both consumers and businesses recognising their environmental and financial benefits, these schemes are gaining market share and increasingly becoming part of our daily lives. Here, we see how businesses tapping into the potential of product-service-systems and product-life-extension business models can serve as use-phase-supporters for businesses seeking to introduce reusable packaging. As reuse system operators, BarePack and RePack support businesses with elements such as (reverse) logistics, cleaning and refilling.
What makes a winning partner
Deciphering the gaps that your business needs filled is the first step, but the nitty-gritty is crucial too: certain characteristics that can amplify your partnership should also be on your radar.
Partnering companies should aim to find a strategic fit: your vision on circularity aligns and your market, context and geographical fit. While knowledge exchange collaborations might operate globally, geographical proximity is needed to ensure resource efficiency and profitability when implementing reusable packaging on the ground.
Reusable packaging is a playground for innovation, so creativity is a desirable characteristic: out-of-the-box thinking and novel business models.
Open communication and collaborative learning are also important as they can enable joint progress towards successful reuse models and uncertainties can be reduced.
Partners should also show alignment with the mission. Being on the same page in terms of sharing interests and benefits will result in flexibility.
Finally, circular economy collaborations are characterised by mutual dependence and long-term goals. Therefore, a partner should show commitment in terms of wanting the change and investing resources.
Don’t just wait and see
Are you ready to move to reusable packaging? Remember that collaboration is key. We’re curious to hear more about your experiences and the challenges you are facing.