The packaging industry has made commendable progress on packaging sustainability through innovations in recyclability and the use of recycled content. The logical next step on the journey is to reuse and refill systems. This will be much harder, as it will require a disruptive innovation leap that will impact all areas of an organisation’s operations and how they collaborate across supply chains. To succeed in this transition, packaging industry players will need to undergo a mindset shift in how they view themselves – from the current, product-orientated, linear economy perspective, to a service-orientated, circular economy perspective. But is the industry ready to make this leap?
Progress on packaging sustainability
Looking around the exhibitors at London Packaging Week last week, it was clear that sustainability is high on the agenda for the packaging industry. There was barely a stand that didn’t have some eye-catching sustainability claim about their packaging solutions or organisational-level sustainability achievements.
For every pack type out there, from stand-up pouches to MAP trays, you can be pretty sure that somebody can offer a version that is 100% recycled, 100% recyclable, made from 100% bio-sourced ingredients, or is manufactured using 100% renewable energy.
The R&D effort by the packaging industry to deliver these more sustainable solutions has clearly been substantial. These investments have been driven by increasing consumer concern about packaging waste and litter (accelerated by the ‘Blue Planet effect’ in 2017) and the impact of regulations and voluntary agreements, such as the Plastic Packaging Tax, the EU Single Use Plastics Directive, and the UK Plastics Pact – see this post for further details.
“Job done!” some might say. The sustainability box can now be ticked! Alas, there is still a long way to go. With 56.5 billion units of single-use plastic packaging sold in the UK each year, it is clear that switching to recycled or recyclable packaging solutions will not, by itself, solve the challenges of packaging litter, ocean plastic pollution, carbon emissions and unsustainable resource consumption. Many of the conference presentations reflected this and focused on climbing up the waste hierarchy towards reuse and refill packaging systems.
Refill and reuse pilots in retail
Catherine Conway of Unpackaged spoke about the various pilot schemes that major retailers have been conducting in the last few years, including Tesco, Waitrose, M&S, and Asda. A common feature of these pilot activities is that they have generally focused on the product lines that are the ‘simplest’ from a reuse and refill perspective i.e. ambient, loose products such as rice, pasta, muesli, tea and coffee.
Of the pilots, Tesco, working with Loop, claim to have completed the largest scale pilot activity involving 10 stores and over 200 product lines. The Loop ‘pre-fill’ system sees consumers purchase products in pre-filled, reusable containers that are returned to store by the consumer once empty. Participants must download the Loop app and sign-up for a Loop account, which tracks how many reusable containers have been taken from store and issues the container deposit refund when they are successfully returned to store.
𝘙𝘦𝘵𝘶𝘳𝘯𝘪𝘯𝘨 𝘢 𝘳𝘦𝘶𝘴𝘢𝘣𝘭𝘦 𝘤𝘰𝘯𝘵𝘢𝘪𝘯𝘦𝘳 𝘸𝘪𝘵𝘩 𝘵𝘩𝘦 𝘓𝘰𝘰𝘱 𝘢𝘱𝘱 𝘢𝘴 𝘱𝘢𝘳𝘵 𝘰𝘧 𝘵𝘩𝘦 𝘛𝘦𝘴𝘤𝘰 𝘱𝘪𝘭𝘰𝘵 (𝘴𝘰𝘶𝘳𝘤𝘦: 𝘛𝘦𝘴𝘤𝘰).
Tesco have since published a report about the lessons learnt from this pilot. The key lessons were:
1. Keep simplifying the customer experience – the pilot system required consumer behaviour changes (e.g. downloading an app, remembering to return containers, finding container collection points in store etc.), all of which had the potential to be simplified.
2. Competitive price – the ‘per unit’ cost of reusable containers is inevitably higher than a single-use package, and the cost of cleaning and prefilling reusable containers was also identified as a significant cost. Tesco believe that these costs will reduce considerably when the scale of these systems is increased.
3. Cultural shift towards reuse – Customer surveys conducted by Tesco found that most people consider reusable containers to have a similar environmental impact to recyclable. More effort is required to educate consumers on the enhanced sustainability benefits of reuse and get the consumers engaged.
4. Collaborating for success – 30 businesses were involved in the Tesco-Loop pilot of 200 product lines. As Tesco state: “One company cannot create a successful and scalable reuse proposition in isolation.”
Catherine of Unpackaged also mentioned the work of the Refill Coalition, which brings together major retailers and solution providers to try and solve the challenges of implementing refill systems. They are currently looking at how to reduce the effort required on the part of the retailer to manage a refill system. One example is to develop in-store refill stations that can be filled at the factory rather than being manually topped up by staff in store.
Progress in personal care and cosmetics
There was discussion of refill and reuse in the world of cosmetics and personal care. Christine Lawson of the Cosmetic, Toiletry & Perfumery Association (CTPA) highlighted some of the specific challenges for this sector. A key challenge is product safety risk linked to product spoilage when reusing or refilling perishable cosmetics formulations. She also highlighted the challenges around consumer behaviour, identifying that whilst many consumers are now accustomed to thinking about packaging waste and recycling in the kitchen, they appear to be less inclined to think about these issues in the bathroom. This may present an additional barrier to refill and reuse in the cosmetics and personal care sector.
Gemma Hembrow of Wrap talked about some of the consumer behaviour research and survey work they are going. Having a really clear, simple message for consumers about what they need to do, and the benefits are key to consumer engagement with reuse and refill systems.
James Melia of the design agency Blond provided a critique of some of the early attempts at reuse and refill systems from the personal care world. Whilst recognising the good intent, questions were raised about the sustainability benefits of products such as the SKKN refill range from Kim Kardashian. These products use what looks like a standard single-use pump bottle as the ‘refill’, placing it in a decorative case – which is the only reusable part of the system.
SKKN refill method (source: SKKN Instagram).
James of Blond went on to suggest that the well-received refill pouches launched by P&G in 2021, which use 60% less plastic compared to single-use plastic shampoo bottles, could be further enhanced from a circularity perspective if the pouches themselves could be reused.
P&G launched a shampoo refill system in 2021 (source: P&G).
Key challenges for refill and reuse
In summary, the key challenges faced by organisations that want to implement reuse and refill systems are:
- Increased cost – How quickly can reuse/refill solutions reach cost parity with single use packaging systems? And if they can’t, can the additional cost be justified in terms of sustainability performance gain or added value for the consumer, retailer, or manufacturer?
- Maintaining brand identify – How do you enhance shelf presence and differentiate your product when the product is presented in identical-looking refill systems or standardised ‘prefill’ containers?
- Maintaining product safety, freshness, and quality – How can you ensure that product kept in the in-store refill systems is not tampered with? Can you be confident that no product is retained during the container cleaning process? How will shelf life be impacted?
- Increased labour and management activities for retailer – How can in-store process be enhanced to become as efficient and cost effective as selling single use items?
- Consumer engagement – How best can reuse/refill systems progress beyond the eco-conscious early adopters to engage mainstream consumers? How to ensure an excellent user experience for consumers trying out reuse/refill systems?
- Need for enhanced supply chain collaboration – How to communicate the changes and coordinate the implementation of reuse/refill solution across manufacturers, retailers, logistics providers, recyclers etc.?
The path forward…
Clearly, despite the positive progress being made, there are still many challenges and unanswered questions when it comes to the wide-scale adoption of packaging reuse and refill systems. But beyond any of the specific challenges mentioned above, my personal reflection is that the biggest challenge related to packaging sustainability is the need for a mindset change. We need organisations to recognise two important points.
First, whilst the move to recycled and recyclable packaging solutions has been achieved through a large volume of technical R&D and incremental innovation, the move to reuse and refill solutions will require more disruptive innovation – which will impact all aspects of how companies operate across design, manufacturing, logistics, and marketing.
Secondly, packaging manufacturers will need to move away from the current mindset of “We sell packaging. We make more money by selling more units” – which is firmly based in ‘linear economy’ thinking. This will need to be replaced by something that is more relevant to the Circular Economy, such as: “We sell the service of ensuring your product reaches the consumer in its ideal state. We make more money by finding more resource-efficient, value adding ways of delivering our service”.
Understanding what, when, where, why and how to make a disruptive innovation leap, such as the one facing the packaging industry, is clearly a very complex challenge with many barriers to overcome. So where to begin? The packaging industry may be able to gain valuable guidance from the academic research on ‘product-service system’ implementation. This work has analysed industry case studies, such as the move from selling cars to selling mobility as a service, or from selling light bulbs to selling lumens. Insights from this research has enabled the development of useful tools, terminology and tips to help organisations design, plan, implement and evaluate their product-service system. Here at Strategic Innovation, we have developed our Strategic Model of Innovation, which can help by providing a holistic overview of the factors at play within a system, enabling you to address each challenge in turn and assess your readiness so that you can make your innovation leap without requiring a blind leap of faith!
London Packaging Week has shown what fantastic progress the packaging industry has made on packaging sustainability. To take the next step on the path to sustainability will require disruptive innovation. Innovation that will impact many aspects of how organisations operate and will require much greater levels of collaboration across supply chains. I’m confident that the agile packaging industry can make the change of mindset necessary to make this next leap possible.
If you are interested in hearing more about our other packaging-related findings, get in touch and we would be happy to have a chat.