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Jeff Way7/19/22 7:36 AM6 min read

4 Startups Driving Growth in the Circular Economy

People often say ‘customers are always right,’ and that statement largely holds true when it comes to driving sales. Customer behavior and preferences are the foundations for market trends, and successful adaptations of these trends are vital for businesses to maintain growth. One of the most recent and fast-moving trends on the market is the demand for sustainability in all aspects of the product lifespan.

The sustainability metric is a particularly growing concern. To put into context, one out of every three consumers considers a brand’s environmental and social impact before making purchases. From investors to customers, there is a targeted expectation for global consciousness from businesses, inclusive of all industries, because of one primary aspect – packaging.

In the United States, about 12 to 15 billion pounds of flexible packaging are used annually. Concerns about using these finite resources are valid as the studies show that 20% of raw materials currently in use will run out in the next 50 years – 35% are projected to run out within 100 years. 

The circular economy is fueling innovation

Circular Economy Graphic

A paradigm shift in the global business plane propels the transformation and remodification of production, packaging, and distribution. Sustainability in the manufacturing, packing, and consumption/usage of products is the primary tenet of the circular economy, a model that is transforming the way business is being conducted. As a matter of fact, market opportunities are projected to reach upwards of $4.5 trillion by 2030, thanks to the circular economy.

And it’s the combined effort of multiple players in the ecosystem, including venture investors, innovative entrepreneurs, and sustainability-focused corporations, that are driving solutions forward. 

With the advent, availability, and advancement of Artificial Intelligence (AI), big data, digitization, and far-reaching technology, waste reuse and recycling have become more feasible. These developments ensure the greater circulation of resources and materials and greatly reduce the amount of waste that ends up in landfills.

Innovative solutions are fueling the circular economy

Technology-led innovations around refill stations, replenishable delivery, reusable packaging, and reverse vending are taking root and yielding valid outcomes on the bottom line and overall market trends.

Refill Stations

Brands that produce consumable and fast-moving edible goods are adopting refilling systems to reduce single-use packaging and limit waste. Nestlé is one company that has started to adopt this practice. In 2020, Nestlé piloted reusable and refillable dispensers for petcare and soluble coffee as part of its efforts to reduce single-use packaging. In those scenarios, customers can bring in reusable containers to make their purchases. Typically printed on the packaging itself, product information is made accessible digitally so customers can find out about ingredients, nutritional values, and shelf life without creating waste from packaging.

This innovation is made possible thanks to partnerships with startup enablers like Algramo

About Algramo

  • Products are sold at bulk prices and remove the cost of packaging, which accounts for ~30% of a product’s cost.
  • Consumers can buy as much or as little as they want, making it more accessible for people who have to make every penny count.
  • Refillable bottles are RFID-equipped, enabling easy & automated refill.
  • The Algramo app tracks spending, usage, and even discounts, increasing savings.
  • Algramo is piloting these solutions worldwide and already has partnerships with major CPGs, including Unilever, Clorox, Colgate-Palmolive, Purina (Nestle), and retailers like Walmart.

Replenishable Delivery

Companies are also bringing back a more sustainable ‘milk-man’ delivery model. The process is relatively straightforward. Products are delivered to customers at the same time empties are picked up, washed, refilled, and restocked for further use. This model combines reusable packaging and refilling for consumables while eliminating the waste accrued from single-use packaging – a truly circular strategy. If you haven’t seen this already, soon, reusable/refillable packaging will be available at over 190 restaurants & brands, including Kroger, Walgreens, Tesco, and Carrefour.

This innovation is made possible thanks to partnerships with startup enablers like Loop.

About Loop

  • With Loop’s in-store or online solution, customers purchase products in refillable, reusable containers.
  • After consuming the products, customers can bring the empty packaging back to the store or schedule a free pickup online.
  • Loop will then pick up the empty containers from a consumer’s home or the retailer to be cleaned, refilled & made available for purchase by a new shopper.
  • Plus, Loop offers dedicated facilities where packaging can be cleaned and stored.
  • Having expanded beyond retail into food service, Loop recently launched a reusable cup partnership with McDonald’s in the UK and is slated to launch reusable cup and packaging options with Burger King and Tim Hortons.

Reverse Vending

Some companies have introduced reverse vending to achieve circular economy recycling goals while encouraging customer loyalty through a sustainable reward system. A relatively simple concept, reverse vending accepts plastics and cans in exchange for cash, vouchers, and other rewards for customers who vend these materials. With advanced technology, reverse vending systems can identify, sort, collect, and process used containers to reduce the amount of waste distributed to landfills. Starbucks, for example, has implemented a reusable cup share program across all 3,840 European, the Middle East, and Africa stores.

This innovation is made possible thanks to partnerships with startup enablers like Hubbub.

About Hubbub

  • Their flagship program in the UK called “Leeds by Example” has 124 new recycling points installed across Leeds City Centre, including machines that offer reward vouchers for each piece of packaging deposited.
  • The program’s initial pilot in Oct 2020 saw 2.1M cans, plastic, and glass bottles, and coffee cups collected and recycled and has since expanded to 6 cities across the UK & Dublin.
  • Hubbub is currently partnering with Starbucks on a pilot that will allow customers to pay a small deposit for a reusable cup for hot and cold drinks. 

Reusable Packaging

As standard practice for the circular economy, companies worldwide are switching to recycling-friendly materials. The primary expectation is that all materials used in the packaging can be reused, recycled, and remanufactured without reducing the value. A great example of this comes from one of the world’s leading reusable packagers, Coca-Cola. Currently, 90% of Coca-Cola’s packaging is recyclable globally, and they have ambitions to increase it to 100% by 2025. But you don’t have to be Coke to adopt this model. Globally, smaller food and beverage companies are tapping into the startup ecosystem to drive reusability for their packaging. 

This innovation is made possible thanks to partnerships with startup enablers like GO Box.

About GO Box

  • GO Box delivers an initial stock of clean reusables in preferred sizes, plus training & marketing materials to ensure a successful service launch.
  • Customers must have a GO Box subscription & download the GO Box app to borrow reusables. When a customer asks to use a GO Box reusable, vendors verify their request with their GO Box mobile app.
  • Customers then return the reusables at any vendor location.
  • The GO Box team will pick up used reusables, sanitize them, and deliver additional stock.
  • GO Box manages all of the logistic and washing services, so it’s convenient & cost-effective to offer reusables.

Globally, entrepreneurs and startup enablers continue to create unique solutions that are helping companies reduce their carbon footprints, achieve their sustainability goals, strengthen customer loyalty, and increase hope for the health of our planet.

Get in touch to learn how Pilot44 can help you identify unique partner-powered solution pilots for your business.