Finding a Path to The Circular Economy
At Pathfinder, we recently held our fourth ‘Path to’ event dedicated to the Circular Economy, and part of a series of talks on how the future is being shaped in several industries, with handpicked players from the corporate and startup world. During this fourth talk, which took place on April 10th, we decrypted sectoral trends and invited our audience to then identify existing problems and pitch innovative business solutions.
On stage, Pathfinder’s Raphaele Leyendecker talked with Meriem Riadi, chief digital officer of Suez Group (leading firm in sustainable resource management), Baptiste Corval, director of Phenix (a startup specialized in intelligent unsold goods and waste management) and Arnaud Lancelot, co-founder of CoZie (brand of organic cosmetics in reusable bottles).
Here are several subjects matters on how the circular economy will redefine consumption patterns, upstream and downstream, of the value chain.
Breaking the traditional process
The steps collecting / treating the waste, are no longer an effective solution with the dramatic increase of waste observed over the past 70 years. In fact, the process of the conception of a product only represents the fixed points upstream of the value chain. Recycling and recovery, as a single solution for waste treatment, are therefore ultimately only one step in the consumption chain.
Today, major economic, societal and environmental trends are affecting part of the value chain. In this new context, there is now a real awareness among citizens and consumers on environmental issues, food loss and waste representing a major amount of squandering resources. Consumers are finally trying to change their consumption patterns to reduce their printing environmental impact.
Still totally absent from this universe or not yet created 10 or 15 years ago, many players are now interested in this value chain.
At the event, we had the chance to get insights from entrepreneurs now operating on the circular economy value chain and breaking away from the linear economic model. Forget about production — consumption — disposal following one another, the entire cycle of the production to minimize its environmental impact and limit the waste of resources is actually revised.
Among our speakers, Baptiste Corval, director of Phenix insists on the fact that a real economy is created around waste. His startup processes 50 to 100 tons every day in its established channels and its donations to associations represent a reduction of 60 to 80% on food waste. A significant data showing that it is possible to transform waste into a real resource.
A work connected to a real awareness
Consumers are nowadays sensitive to zero waste solutions, and a growing search for large bulk distribution stores is being noticed. In order to reach an industrial scale, products must first of all appeal and be distributed by an inspiring brand, so the circular economy has an essential role to play in this equation.
CoZie, understands the challenges! The startup directly addresses a real need of users in the market and make the circular economy easily available. Its co-founder, Arnaud Lancelot, insisted on the fact that circular economy must not be a restriction for the consumer. According to him, the consumers should only make small gestures, for CoZie it implies that they have to return empty bottles of the organic cosmetics products.
Giving visibility to waste and ensuring that more and more intelligent solutions are developed is the role of new players challenging this value chain. But, some tech giants have already started to make moves into the circular economy field by developing new services and/or technologies to meet oppressed needs.
Well… Obviously GAFAs are entering the game and big things are coming!
Tech giants are beginning to tackle the circular economy by redesigning the development of their products and services in order to be able to control the value chain from its conception to the end user.
For instance, Apple’s latest innovation is not a phone, watch or other consumer product, but Daisy, a recycling robot’ — “This is about the big hairy goal of making all our products from recycled materials,” said Lisa Jacksons, Apple’s vice president of environment, policy and social initiatives. This action is going to take a while but the impact on innovation is legit.
Furthermore, one of the upcoming projects designed by Sidewalk, a subsidiary of Alphabet (Google), is to take new waste management systems at a far-reaching point. Smart cities with autonomous robots delivering waste to tunnels located under districts is on his way.
But what about big corps?
In response to this reality, large companies are also shifting their business model in favor of new approaches that allow them to control the entire value chain, in particular by fitting into all links in the value chain. Brands such as Philips or Ikea no longer see the product as a result but rather as a support to sell a service.
Indeed, instead of selling single-use lighting devices, Philips now offers to his customers a complete lighting service that includes the installation, maintenance and replacement of lighting devices… indefinitely. Philips’ remuneration depends on the level of consumption of its customers, a pay-per-lux business model that encourages users to limit energy waste. Ikea on another side, is currently exploring new ways to transform by renting its furniture. It can be repaired, reused and resold to promote a service that extends the life of these assets.
Other companies have adopted this circular economy philosophy. Leading firm in the sustainable resource management, Suez’s motto: “We must be responsible in the management resources” highlights the key challenges.
Meriem Riadi, CDO at Suez Group, present at our debate, noted that genuine fundamental work needs to be carried out on the circular economy field and must be taken to the next level. Suez’s vision on this subject is clear: Encourage, Educate, Help citizens and brands.
Work has begun to act on all stakeholders. The purpose? Provide solutions to industrial players and to scale up on these subjects. In the B2B sector, short loop solutions have been implemented. In fact, in order to prepare for the reuse of organic materials much more quickly, Suez marketplace, Organix, puts organic waste producers in touch with the methane producers who convert this waste into energy. In addition, spots actions with brands in order to raise awareness around nudge behavior has begun.
But, an big corps actually integrate these initiatives to meet oppressed needs? Would it be possible, for a group such as L’Oréal, that is already on an extremely large industrial scale in the cosmetic market? The question was actually discussed.
Baptiste Corval appears to be quite skeptical. According to him, it is too heavy and important transition on internal processes. Substantial financial resources will not compensate for the time allocated to the implementation of these processes. In another way, Meriem Riadi points out that transformation for big corps is difficult per se, but that partnership with different actor can help innovation.
In fact, Suez group is “ready to follow all the challenges”. It is with this perspective that they launch into the creation of new businesses outside the group in order to avoid suffering from its long-standing constraints. An approach on which we are familiar with.
How do we help do all that at Pathfinder?
Throughout this masterclass and workshop, we brought forward one of our big convictions at Pathfinder, that all players, particularly incumbents, should broaden their views and embrace the digital transition by looking at other value chains and learning from the disruptive practices of other corporate players and startups.
Our motto at Pathfinder is to realign interests of entrepreneurs and big corps. Our clients? Big corps. Our mission? Create their new businesses to rule the digital transition of their value chain. In startup mode. With entrepreneurs.
Stay tuned for our third episode on July 2 at 6:30pm at The Family Paris, where we will focus on the Silver Economy. With industry leaders and startups, we will break down the Silver Economy value chain and understand the different trends affecting and shaping its future.
