In the loop

From the August 2019 print edition

Businesses are faced with significant challenges every day. Among the most demanding are working towards a supply chain that is sustainable, yet profitable. It’s no longer about minimally meeting environmental regulations but creating value for consumers and stakeholders.

Haagen Dazs partners with Loop for a subscription home delivery service for foods and household goods with reusable packaging. The Nestle brand is the ice cream partner for the pilot project in New York.

The focus is toward more innovative, opportunity-focused thinking that considers impacts on the planet and society (is it positive, neutral or simply “less bad”?) and prepares organizations for resilience and growth in an uncertain future.

For consumer packaged goods (CPG) companies, thinking critically about the function of packaging and the ways they can change the paradigm around production and consumption is one aspect of designing a supply chain that can take us out of the linear and into a regenerative circular economy.
As the system currently operates, industry produces on a one-way track to landfilling and incineration. Raw material is sourced from the earth to produce commodities sold, used and disposed, and the value of the material is lost—either buried or burned. Facilities waste and other pre-consumer materials meet the same fate.

From linear to circular
This make-use-dispose pipeline is known as the linear economy because products and packaging, once manufactured and used, too often go in one direction: the garbage. Conversely, the concept of a circular economy keeps resources in the supply chain at high value by recovering, reusing and repurposing whenever possible.

Within this context, supply chain doesn’t just refer to the materials and processes involved in the back-end of making and distributing something, but the full lifecycle of an item, including when it leaves the production line. The consumer goods supply chain is currently quite wasteful end-to-end; focusing on packaging reveals significant opportunities for improvement.

Many “green” packaging trends aim to solve for waste with the end-user, the link where the value of material is visibly lost. For example, biodegradable bioplastics made of renewable feedstocks instead of petroleum are supposed to break down in the environment as plastic litter does not. This demonstrates a change in raw material sourcing and an attempt to prevent litter with a material that will decompose.
However, most compostable bioplastics need an industrial composting facility to break down. There are only a handful of those globally, and many don’t want this in their piles. What’s more, the resources needed to produce bioplastic are agricultural space, water and material the world is nowhere near able to sustain at scale.

Another example of manufacturers aiming to tackle waste on both ends of the supply chain is the practice of lightweighting packaging by either replacing materials with a lighter weight alternative (glass with plastic) or using less material. The idea is less waste at the front and back end, but often results in a product or package rendered non-recyclable through conventional channels.

What neither of these methods do is value resources such that they are kept cycling within the supply chain and in use for as long as possible, extracting their maximum value and recovering them for reintegration. Each practice assumes the resources that go into producing packaging, and the resulting post-consumer waste, is disposable and still treats the material as single-use.

We did a lot of reflection and realized that the foundational cause of garbage is disposability. For a packaging designer, an effective approach when considering materials is to make packaging out of material that recyclers want and have the technology to handle. It’s about the entire supply chain and the potential for a recycling company to make a profit.

But a circular economy is one that focuses on durability and use of renewable resources, including energy inputs. Recycling, while important, is energy and resource intensive, which is why so many items are not considered cost-effective to recycle.

The need for profit
Packaging design for profitability is certainly complex enough without considering the full life cycle of materials. Manufacturers and brands that commit to sustainability in a practical, scalable way stand out in an industry that still profits from the status quo, but it must be profitable in order for it to stick in the short-term.

Rethinking all aspects of the supply chain, from sourcing to end-of-life, is the key. Above all resources, true change requires boldness.

TerraCycle’s new circular shopping platform Loop works with brands to create durable versions of goods previously housed in single-use packaging. The products are offered in a combination of glass, stainless steel, aluminum and engineered plastics designed to last at least 100 uses; when they do wear out, TerraCycle is able to recycle them, cycling the value of
the material.

Offering trusted brands in upgraded containers, consumers enjoy products they love while eliminating packaging waste—a “win-win” for profitable, sustainable supply chains. Conveniently delivered to one’s doorstep, the Loop Tote doesn’t use bubble wrap, air packs, plastic foam, or cardboard boxes, also scrapping excess e-commerce packaging material.

With Loop, brands are taking the bold step of owning their package at every link on the supply chain and putting their packages back on the line. While the goal of the platform is to eventually eliminate single-use packaging from the waste stream altogether, manufacturers have the opportunity to offer their refillable products as an additional SKU in their product lines, which has virtues for large and small brands alike.

While large companies have the resources and funding to take on a lighthouse project like this, smaller businesses have the flexibility to design for sustainability in the now. Corporations such as Procter & Gamble and Unilever can make a huge impact here, while young companies like Soapply and Melanin Essentials set the standard for making sustainability a part of their DNA.

As an integral aspect of the supply chain, retailer partnerships bring the packaging into stores, making it accessible for consumers. In the United States, our founding partners are Walgreens and Kroger, Europe has Carrefour, and Canada’s largest food and pharmacy retailer Loblaw Companies Limited recently announced it would launch the platform in the country early-2020.

Developing close collaborations of this kind creates a strong position for all players to offer higher-value products with less waste on the back-end. Reconciling innovation and growth with sustainability is by no means an easy task, and dialogue with all stakeholders yield more-complete information and options to consider.

An important thing to remember is that supply chains are about people, not just processes. What’s interesting is the higher up the waste hierarchy you move (from litter to landfill, waste to energy, to recycling, upcycling and reuse) the more jobs you create in the process. In terms of injecting value in moving from the linear to the circular economy, this is a positive most of us can agree on.

In the end, sustainability comes down to taking responsibility. What companies tend to be good at is being efficient in their operations. Focus less on the physical factory as the point of the environmental issue and realize everything put out on the market will become garbage unless you take responsibility for it. Everything leaving the factory currently becomes waste.

Tom Szaky is the founder and CEO of TerraCycle

Design products that have value, instead of harm. The circular economy at its ideal is intended to be regenerative. Shouldn’t we aspire that our products actually create a benefit? Even If we get to 100 per cent recycling, 100 per cent recycled content and zero packaging waste from reusable packaging, we’ve only hit net neutral. What is net positive? We need to start thinking about that versus just going about how are we going to eliminate our negative. SP