Topic 2 Reusable packaging
Reusable packaging is a USD 10+ billion innovation opportunity that can deliver significant user and business benefits. Innovative reuse models can unlock significant benefits, enabled by digital technologies and shifting user preferences. Such models can help deliver a superior user experience, customize products to individual needs, gather user insights, build brand loyalty, optimize operations, and save costs.
Reuse presents an innovation opportunity to change the way we think about packaging from something that’s simply as inexpensive and light as possible to viewing it as a high value asset that can deliver significant benefits to users and businesses.
According to Ellen Macarthur Foundation (2019) , the 6 benefits of reuse are:
- Cut costs: Packaging and transportation costs can be reduced by supplying refills for reusable containers in compact form, such as in concentrates or solids, e.g., as tablets.
- Build brand loyalty: Brand loyalty and customer retention can be achieved through deposit and reward schemes for reusable packaging.
- Improve user experience: User experience can be improved by enhancing the look, feel or functionality of reusable packaging (which can be more high-end as its initial production cost is divided over many uses).
- Gather intelligence: Information on user preferences and system performance can be gathered by incorporating digital technologies such as RFID tags, sensors, and GPS tracking into the reusable packaging system.
- Optimize operations: Economies of scale for distribution and logistics can be achieved through sharing reusable packaging across brands, sectors or wider networks.
- Adapt to individual needs: Individual needs can be accommodated by reuse models that let users mix and match flavors, personalize packaging or choose desired quantities.
Business-to-consumer reuse models differ in terms of packaging “ownership” and the requirement for the user to leave home to refill/return the packaging.
Here are depicted the “Four Reuse Model”, which are new ways to rethink packaging
- Refill at home: Users refill their reusable container at home (e.g., with refills delivered through a subscription service);
- Return from home: Packaging is picked up from home by a pickup service (e.g., by a logistics company);
- Refill on the go: Users refill their reusable container away from home (e.g., at an in-store dispensing system);
- Return on the go: Users return the packaging at a store or drop-off point (e.g., in a deposit return machine or mailbox).
Source: Reuse: Rethinking Packaging – Ellen Macarthur Foundation.
Refill at home can work in both traditional and online retail. The model works particularly well for e-commerce as the online interface enables communication of an integrated solution and at the same time there I no competition for shelf space from products sold in standard packaging
Current examples of Refill at home include:
- E-commerce for compact refill products that are used at home or in office buildings on a regular basis (e.g., beverages, home care, and personal care products);
- Traditional retail outlets for standard-sized (non-compact) refills (e.g., for home care and personal care products).
Refill on the go requires a physical store or dispensing point, which makes it better suited to traditional retail outlets and urban environments. In low-income markets, the model can accommodate customers’ needs for small quantities at affordable prices without relying on single-use sachets.
Current examples of Refill on the go include:
- Traditional retail outlets for products like beverages, cooking essentials (e.g., grains, flours, oils), personal care, and home care;
- Cities for coffee to go or water fountains.
Return from home is suitable for e-commerce as the pickup of empty packaging can be combined with the delivery of new products. It is particularly well suited for urban areas with reduced travel distances between deliveries.
Current examples of Return from home include:
- E-commerce for products such as groceries, meal delivery, personal care, home care, and beauty.
Return on the go is widely applicable as it can substitute most single-use packaging without changing the fundamental purchase situation.
Current examples of Return on the go include:
1.Traditional retail outlets for beverages where the model has been proven to work at scale in several geographies (e.g., Latin America, Japan, and Europe);
2.Cities and events for products on-the-go such as takeaway coffee, beverages, and food.