The Future of Plastic Packaging: Embracing Reusability for a Sustainable Tomorrow

The 5-Rs and The Reusability Pillar

The 5-Rs framework tells us that four actions should be taken, if possible, prior to 'recycling': refuse, reduce, reuse, repurpose, and then recycle. In accordance with this, what are some solutions that already exist?

On the consumer side, more and more customers have started refusing to purchase products with plastic packaging. As a result, more companies have had to shift away from such packaging or have opted to create an alternative (trends around sustainable packaging are on the rise). Similarly, repurposing also occurs in creative consumers’ households. It occurs in small acts like using empty plastic containers for organization, or for crafts.

Supply-side solutions include technologies that have been developed to help companies reduce unnecessary plastic in their supply chain. This can be done through supply-chain mapping, monitoring tools to identify improper disposal of plastic, and identification of problem areas that can lend itself to a circular solution. Not only does this cut down on costs, but it also cuts down on the waste produced.

Many plastic recycling initiatives have also popped up globally. However, recycling is often considered the last resort for circularity as the act could have negative environmental side-effects. Breaking down plastic requires a lot of energy, water, and can release pollutants into the atmosphere.

And finally, the pillar we have not mentioned yet: reusing. Reusability systems used to be commonplace for commodities like milk in the past. The valuation of the reusable packaging industry has been increasing, with the industry’s CAGR in 2023 being 5.5% as more companies realize the economic and societal value of such a system. However, in a globalized world with long and complex supply chains the concept of reusability can be complicated, and demand coordinated efforts from stakeholders. It requires the promotion of a sustainable foundation when making packaging in the first place.

Reusable Packaging and its Trajectory

Single-use plastic products are everywhere. For many of us, they have become an integral part of our daily lives. The level of greenhouse gas emissions associated with the production, use and disposal of conventional fossil fuel-based plastics is forecast to grow to 19 per cent of the global carbon budget by 2040. Few countries are now beginning to ban single-use plastic or impose taxes to promote the adoption of reusable packaging:

• France: Specific reuse targets have been introduced (5 percent by 2023 and 10 percent by 2027) with an increased focus on standardization of containers as an enabler; there will also be a ban on premises serving via single-use solutions from January 2023.
• Germany: Restaurants, bistros, and cafes that sell food or drinks “to go” are obliged to also offer their products in reusable packaging from 2023.
• South Korea: Disposable cup deposits for coffee shops and fast-food outlets were introduced in 2022.

Reusable packaging can be divided into four different solutions.

All four concepts currently face several barriers mainly linked to cost, supply chain, acceptance, and food safety. McKinsey projects reusable packaging as a base case would reach only 5 percent share or less of the global packaging market by 2030 within a handful of segments that offer a clear rationale for further penetration:

• Beverages. Existing deposit-and-return systems form a basis for wider adoption of reusable glass or plastic containers.
• Food service. Take-away food-grade container loops are in their infancy but have the potential to spread across large cities. A previous attempt at this solution in Singapore shut down, and sustainability leaders claimed more regulations were needed in the area. However, quick-service restaurants are reacting to sustainability pressures and running trial solutions (for example, this is becoming mandatory in Paris, France).
• Packaged food. This applies to low-to- no-barrier grocery items like dry bulk products (such as rice, flour, and pasta). Eco-friendly grocery stores are popping up worldwide, including some that have become multi-national chains.
• Home care. Despite services being available for refill/concentrate formats for standard bulk products (like detergent) in South and Southeast Asia, there is limited uptake.
• E-commerce packaging. The rapid increase of e-commerce during the pandemic poses an extra focus on e-commerce packaging to be more sustainable and generate less waste in consumers’ homes. Reusable packaging can be one route ahead.
• Retail secondary packaging/transport packaging. Many food products could be delivered to retail stores in specialized reusable crates as opposed to regular crates. For example, Swedish Return System crates that became Sweden’s standard 20 years ago.

Focusing on innovation in reusable packaging can offer compelling economic and environmental benefits despite current challenges. While virgin plastic often costs less than recycled plastic and recycling processes can be expensive, reusable packaging systems can provide long-term savings and sustainability advantages. Although initial investments in logistics, collection, and cleaning are required, the overall lifecycle cost of reusable packaging can be lower due to reduced waste management costs and the decreasing cost of reuse technologies. Additionally, as the demand for sustainability grows and technologies advance, economies of scale and efficiency improvements are likely to make reusable systems more economically viable. Transitioning to reusable systems, if done properly, can significantly cut down on environmental impact and offer competitive financial returns over time.

With the renewed interest in the industry, there are several startups focusing on reusable packaging materials and experimenting reusability as a business model. They are pioneering solutions for a more circular economy, where packaging materials are designed to be reused, recycled, or composted, rather than ending up in landfills or the natural environment. The growing interest and investment in packaging circularity startups is a testament to the urgency and importance of this issue. As the world struggles to address the environmental consequences of our linear "take-make-waste" economy, these innovative companies are leading the charge towards a more sustainable future.

By developing alternative packaging materials, improving recycling and waste management systems, and creating new circular business models, we will not only be addressing the plastic waste crisis but also drive broader systemic change.

Current Barriers for Reusable Solutions and Startups

Many trials in the pilot phase have difficulty scaling. Scalability is a challenge due to several limiting factors within the current packaging value chain, including lack of acceptance, infrastructure, regulatory impetus for reductions in overall packaging, and cost.

There are inherent challenges with reuse/refill containers that must be tackled to scale such solutions:

• Reuse and refill models present logistical complications, such as installing enough refill machines in the right places.
• Furthermore, reusable containers need to be used several times to have a smaller environmental impact than single-use packaging. Container loops, for example, need to last at least 10 cycles to have a net environmental benefit.
• The returns are still manual and must be digitized to capitalize on the potential.

There is also a shortage of systems to support the re-entry of these reusable packaging back into the supply chain. Startups developing circular packaging solutions need the following facets accounted for, despite them having barriers.

1. Innovating Cost-Effective, Sustainable Packaging: Developing new materials and designs that meet regulatory and performance standards while remaining cost-efficient. Investment in R&D is crucial.
2. Navigating Complex Regulatory Landscapes: Adapting to varied regulations across regions and industries requires continuous monitoring, proactive engagement with policymakers, and guarantee that solutions meet standards.
3. Scaling Operations Sustainably: Achieving scalability is challenging due to interdependencies between different supply-chain actors, high reverse logistics costs, and potential environmental trade-offs.
4. Building Strategic Partnerships: Forming alliances with suppliers, manufacturers, and retailers can enhance resources, market reach, and customer bases. But excessive reliance on these partnerships can also pose risks.
5. Overcoming Startup Limitations: New circular startups face challenges such as limited resources, legitimacy, and difficulties in forming essential partnerships. Success often favors established companies with lower economies of scale. Most successful models tend to be from well-established companies.
6. Managing Reverse Logistics and Consumer Engagement: Effective reverse logistics and consumer participation are vital for scaling, but changing consumer behavior remains a significant challenge.

Facilitating Packaging Circularity through Reverse Logistics Platforms (RLPs)

Reverse Logistics Platforms are systems designed to manage the process of returning goods from consumers back to manufacturers or retailers, or to recycling and disposal facilities. They handle various tasks including returns management, recycling and waste processing, and product remanufacturing. These platforms coordinate transportation and warehousing for returned items and use data analytics to optimize processes and improve efficiency. By streamlining returns, promoting recycling, and facilitating product reuse, reverse logistics platforms help companies enhance sustainability and reduce costs while contributing to circular economy goals.

RLPs serve an important role in facilitating the shift to a more circular economy for packaging materials. These systems help to streamline the collecting, sorting, and reprocessing of used packaging, ensuring that valuable resources are recovered and reintegrated back into the supply chain.

One important feature of RLPs is their capacity to build effective take-back programs and collecting networks. By collaborating with retailers, consumers, and waste management providers, these platforms make it easier for end users to return unwanted packaging for disposal or recycling.

Furthermore, RLPs can improve the flow of packaging materials by giving data and analytics on collecting, sorting, and processing. This data can be used to inform product design, material selection, and recycling infrastructure investments, ultimately improving the circularity of packaging systems.

By leveraging RLPs, companies can more effectively close the loop on packaging waste, reduce their environmental impact, and contribute to the development of a truly circular economy. These platforms are essential in overcoming the challenges of establishing reverse logistics and consumer engagement, which are critical barriers for startups in the circular packaging space.