From 480 Innovative Submissions to 12 Sustainable Solutions: Where are the NextGen Cup Challenge Winners Now?

By Bea Miñana

April 13, 2022

Four key drivers have accelerated sustainable packaging innovation in the last 3 years 

In 2018, the NextGen Consortium launched its first initiative, the NextGen Cup Challenge––a global design competition seeking to identify and commercialize existing and future solutions for the single-use, hot and cold fiber cup system. Students, manufacturers, entrepreneurs, designers and businesses were invited to submit their ideas for the cup of the future. After a rigorous four-month review process, the Challenge narrowed nearly 500 submissions from over 50 countries down to 12 winners. 

These 12 winning solutions––broadly categorized into innovative cup liners, new materials and reusable cup service models––were chosen for their potential to help turn the 250 billion fiber to-go cups used annually from waste into valuable materials that can be reused and recovered. 

Today, many of these innovations continue to disrupt the status quo of the single-use cup, a seemingly convenient product that has come with a steep price over the years: cups ending up in landfills, creating greenhouse gas emissions that contribute to climate change. As companies look for ways to shift their business practices away from a wasteful take-make-waste system, there are tremendous opportunities for new solutions. The next wave of cup design is more innovative than ever, with new materials that can reduce environmental impact, and new systems that can keep valuable materials in play for longer.  

Over the last three years, we’ve seen the pandemic alter consumer preferences, more corporations commit to sustainability goals, and policy transform the landscape for circular packaging solutions, including reuse models. Amidst all these changes, NextGen Cup Challenge winners are paving a path forward in line with four key trends:  

1. New materials are increasingly competitive as an alternative to single-use plastic 

NextGen Cup Challenge winner, Footprint, continues to expand in its mission to replace single-use plastics with plant-based fiber at major food companies, retailers and consumer packaged goods companies, across categories including shelf-stable cups, meat trays and dairy. The company’s plant-based plates, bowls and other food-service items are in concession stands at Footprint Center, home of the winning NBA and WNBA teams, Phoenix Suns and Phoenix Mercury. This long-term naming-rights partnership between Footprint and the Suns management group puts a spotlight on sustainability, fan education and reducing the environmental impact of sports and entertainment events. In December 2021, Footprint announced a SPAC merger with Gores Holdings VIII, and is accelerating growth in key verticals like supermarkets, stadiums, and geographically in Europe, opening an R&D center in Eindhoven, The Netherlands, and expanding production in Poland with new factories coming online in the coming year. 

NextGen Cup Challenge winner, MM Kotkamills Boards, is developing new materials for a range of packaging types, including and beyond the cup. The company’s Oy’s ISLA® Duo material for hot beverages offers an alternative to polyethylene (PE) extrusion-based cups. The product is now in regular production and sold worldwide. MM Kotkamills has also widened their family of sustainable barrier board products with their new ISLA® Ice and Cream board solution for selling ice cream in retail stores and over the counter. Their new generation fiber solution-based ISLA® Duo is widely used in the event industry. The fiber-based cups are collected and recycled, with the cups’ wood fibers reused in the production of other fiber-based sustainable solutions, such as tissue paper or corrugated board. 

Colombier has widened their product range since winning the NextGen Cup Challenge. Their EcoBarrier Flex™, a pure paper solution with an innovative barrier, acts like plastic to preserve food products, prolonging shelf-life. EcoBarrier Flex was designed as primary packaging for cookies, potato chips, candy, food bars, powders and other food products, and is now piloting with major food brands. 

2. Reuse is going mainstream 

Significant changes have happened in its home country of Germany since RECUP was announced as one of the winners of the NextGen Cup Challenge. A law was passed that obliges catering establishments to offer a reusable alternative for to-go food packaging, advancing more widespread use of reusable systems. This important milestone supports the continued growth of RECUP, especially as they launch REBOWL, their new reusable alternative for take-away food. Since the NextGen Cup Challenge, RECUP has received several honors for their reusable packaging, including the “Blauer Engel”, the “European Reusable Award” and the Bavarian Environmental Medal. In 2020, RECUP partnered with McDonald’s in Germany on a reusable cup system. 

3. Strategic partnerships are expanding the reach of innovative solutions 

 

Since winning the NextGen Cup Challenge, Muuse has grown its network around the world. In 2019, the company expanded their track and trace reuse service in Hong Kong and partnered with Swire Properties to reduce waste within Taikoo Place. In 2021, they expanded their reuse service in Toronto, Canada. And in early 2022, they launched a partnership with Starbucks, enabling reuse at Starbucks stores at the National University of Singapore. They have also been working with GrabFood and food panda in Singapore to provide reusables for food delivery. Overall, they have been able to save 70,000+ single-use items from entering the waste stream, working with over 100 partners. In 2021, the team lost their founder, Brian Reilly, who is greatly missed by his family, friends, and colleagues. The Muuse team is extremely honored to continue out his legacy and push forward his vision for reuse. 

NextGen Cup Challenge winner WestRock recently joined forces with Tim Hortons as a brand partner for their pilot cup, which is expected to launch soon at select Vancouver restaurants. In addition to innovating a recyclable cup, the company continues to explore recyclable barrier technologies designed for the specific needs of other food packaging, including ice cream pints, lined water cups and yogurt cups. 

 

NextGen Cup Challenge winner PTT MCC was selected as one of the market testing solutions for compostable and recyclable paper cups by Starbucks in select stores in Vancouver, Seattle, San Francisco, New York and London. Many other brands have engaged the company to develop more sustainable paper cups solution using BioPBS, the company’s bio-based material for packaging. 

4.Capital is accelerating the growth of solutions  

Earlier this year, NextGen Cup Challenge winner SoluBlue won the Postcode Lotteries Green Challenge, a global sustainability award and one of the largest annual competitions in the field of sustainable entrepreneurship. Their seaweed-based polymer technology that helps extend the shelf-life of food, reducing both plastic waste and food waste, was selected from more than 650 startups competing from across Europe. The award of €500,000 in prize money will be used by SoluBlue to help scale up their technology for pilot production among retailers.  

 

Since winning the NextGen Cup Challenge, CLUBZERØ has gained even more market interest, with more than 380 investors committed to helping their fight for zero waste. Since the launch of their public crowdfunding campaign, CLUBZERØ has to date achieved over 120% of its goal. In September 2021, CLUBZERØ launched their reusable packaging to tackle plastic pollution across the takeaway sector in London, subsequently announcing partnerships with Just Eat, King’s Cross, ReLondon, Camden Council and First Mile. Having completed over 50,000 orders in Q4 2021, CLUBZERØ welcomed new U.S investors including Chris Vance (ex-Tesla + Impossible Foods) and partnered with Nestlé (Nescafé) to provide reusable packaging. 

Where do we go from here?  

The tremendous gains of these companies show that the road to circular foodservice packaging is being built quickly. Through its grant funding, business acceleration, testing and curated in-market pilots, the NextGen Consortium continues to strengthen the ecosystem of companies, innovators, investors, policymakers and consumers paving the way forward. This is just the beginning of our collective journey, and we are excited for a future in which circular packaging is the standard rather than the exception. 

Circular Supply Chains Need Intelligent and Distributed Manufacturer Networks

By Danielle Joseph

November 22, 2021

Gone are the fleeting days of component parts showing up just in time for production from an unknown combination of suppliers. After pioneering the just-in-time supply chain, Toyota responded to the Fukushima disaster by stockpiling critical components — such as semiconductor chips — with enough supply for months at a time. That was a decade ago.

Now, Toyota may be doing better than its competitors while a global chip shortage costs the automotive industry upwards of $110 billion in car sales. However, more industries are recognizing the limitations of a just-in-time strategy applied broadly to every component part and raw material across globalized supply chains.

As unforeseen disruptions increase — whether the COVID-19 pandemic or climate-related natural disasters — and as more products demand critical, limited resources, intense fluctuations in demand, labor shortages, inadequate equipment and physically damaged facilities contribute to an instability of manufacturing capacity. Underdeveloped manufacturing capacity leaves industries exposed to risk, price volatility, market dislocations and lost value.

Unfortunately, first-mile stakeholders in the supply chain are often most at risk of losing value in the face of disruptions. For example, demand for lumber sharply increased when homeowners sought to remodel and build new houses during the COVID-19 pandemic. Meanwhile, U.S. sawmills (largely Canadian-owned) had to shut down over 40 percent of their capacity during this same time period. Yet forestry growers — producing timber that becomes lumber — suffered in a buyer’s market and saw prices for timber remain low: When adjusted for inflation, timber prices are at their lowest over the past 50 years.

While the market has since recalibrated and the lumber bubble may be just one instance in which supply was ill-prepared to manage demand, the whole of today’s U.S. manufacturing is just 11 percent of GDP — near its lowest in over 70 years. Underdeveloped manufacturing capabilities from generations of regional specialization pose significant risk to meeting demand and climate goals. U.S. Secretary of Energy, Jennifer Granholm recently wrote: “We have weak domestic supply chains for technologies critical to our economic and national security… China is the only country with control over every tier of the supply chain for critical materials like the lithium we need for vehicle batteries, including 80 percent of raw material refining capacity… Other countries, especially China, produced 85 percent of transformers for our electric grid — while America still produces almost none.”

The automotive, energy and tech industries must contend with critical rare earth metal supply chains needed for everything from batteries to solar panels. These products are reliant on limited resources, often harmfully extracted from biodiverse regions fraught with social inequities. The ability to (re)manufacture and recycle these raw materials efficiently and locally is critical to business continuity in an increasingly resource-constrained world.

The time is now: Advances in automation and machine learning, rising pay globally and increasing risk from supply chain disruptions suggest that onshoring manufacturing is increasingly attractive to many product producers. Against this backdrop, what do resilient and circular supply chains look like? Supply chain managers are finding the right instances to:

  1. Create visibility into manufacturing supply chains to better prepare for and manage risk
  2. Produce with distributed, more regionally resilient supply networks
  3. Source feedstocks locally and from more available recycled content

Smart entrepreneurs are seizing the moment to build more resilient, circular supply chains. Partsimony, a company dedicated to building cognitive supply chains and increasing efficiencies, closed a $2 million seed round led by Closed Loop Partners’ Ventures Group with participation from Contour Ventures, Urban Us and other top institutional and angel investors. Partsimony applies machine learning to build a predictive and dynamic manufacturing market network, helping solve for the manufacturer discovery and price quoting process for complex hardware companies — which can be an opaque, manual and excel-based process today for both the hardware company and the manufacturer. Partsimony provides hardware companies with a better, real-time understanding of their manufacturers’ capabilities and pricing, helping them iterate and commercialize products faster and with increasingly distributed supply chains. Partsimony also supports the manufacturer by serving as a qualified lead generation platform to acquire customers whose products match technical capacity (production methods and volumes) and help manufacturers maximize margin.

Partsimony’s platform demonstrates how increased transparency and intelligence across supply chains can ultimately benefit business, people and the planet through three core activities:

Digitizing supplier relationships creates transparency

When supply chain disruptions happen, hardware companies need better control over their production and transparency into their suppliers to adapt quickly. Case in point: Toyota knew to safeguard its chip supply because of the company’s “no black box” approach, only adopting technologies it truly understands, down to the gases and the metals of each component. This supply chain visibility — down to the material level — is a critical driver of resiliency, and we invested in Partsimony because its platform helps enable this kind of visibility.

Distributed manufacturing supply chains shorten lead times

Adopting a distributed manufacturer network of on-shore manufacturing within existing off-shore manufacturing supply chain networks is increasingly becoming a competitive advantage. This is not about an America-first dogma; on-shoring of manufacturing helps regionalize the production for any supply chain. Doing so shortens lead times and helps diversify the supplier base. Distributed manufacturer networks are primarily about developing resilient and sustainable business practices, with the added benefit of reducing emissions associated with the international transportation of raw materials and finished component parts. Working with customers such as Stanley Black & Decker, Partsimony has demonstrated 96 percent cost reductions and 83 percent lead time reductions.

Data-driven recommendations can leverage engineering insights and incentivize use of recycled content

Design and material selection have an outsized impact on the circular impact of products. A poorly designed product may choose hard-to-recycle and fossil fuel-based materials in formats where the materials are intermingled and difficult to separate for recovery — a product William McDonough would call a “monstrous hybrid.” Now, Partsimony’s AI supports hardware companies in testing novel, more sustainable materials and alternative manufacturing methods in products from the very first point of design. Engineers upload their digital designs or CAD files to the platform, and Partsimony is building its AI to read the structural requirements of the component part and potentially recommend materials from recycled content, as well as alternative manufacturing solutions.

Digital visibility, distributed manufacturer networks and data-driven infrastructures are the circular antidotes to today’s analog and fragile supply chains. The COVID-19 pandemic is not the first black-swan event within this century, and it most certainly will not be the last. Climate-related disasters will continue to upset business-as-usual, just-in-time production and manufacturing. If we want to design more circular products with more socially equitable access, we must also capitalize on the supply chain disruptions in front of us to redesign our supply chain to be more resilient and more circular.

 

Originally published in GreenBiz

Climate Series

Why solving the climate crisis requires a transition to the circular economy

By Jessica Long, Managing Director

September 20, 2021

This article is part of Closed Loop Partners’ Climate Series, which explores the critical link between transitioning to a circular economy and addressing the climate crisis. By reworking the fundamental flow of materials in our economy, the circular economy offers an economically attractive, socially just and environmentally sustainable way to meet our global climate commitments.


 

  • While the transition to renewable energy is critical to meeting our global climate targets, it will only address about half of our emissions.
  • The remaining half are tied to the products and services we consume everyday.
  • The circular economy provides the only economically attractive and environmentally sustainable way to transform our production and consumption systems in line with global climate commitments.
  • There are already a number of successful circular economy business models that reduce extraction and landfilling costs and cut carbon emissions, paving a pathway forward.    

 

Leaders from almost every nation on earth––197 countries––have signed the Paris Agreement to limit temperature rise to 2 degrees, with an agreement to aim for a 1.5 degree celsius limit. Nearly one-fifth of the world’s 2,000 largest public companies (representing $14 trillion in sales) have committed to net zero emissions

So why are scientists, activists and leaders across sectors still worried about the climate crisis? Two important reasons come to mind:

  1. Our current policies push us close to 3 degrees rise in global temperature. Even our pledges only get us to 2.4 degrees. 
  2. It’s not enough to transition to renewable energy. We also need to tackle carbon emissions in the stuff we create, buy, use and dispose of. 

Our reliance on “dirty” and non-renewable energy is a significant contributor to our climate crisis, and a rapid and just transition to renewable sources of energy is critical to reducing global emissions. However, that’s only about half of the answer. Research from the Ellen MacArthur Foundation finds that our transition to renewable energy “can only address 55% of emissions. The remaining 45% comes from producing the cars, clothes, food, and other products we use every day.” 

What does our linear economy have to do with the climate crisis?

What’s wrong with our current methods of production and consumption? Today’s linear economy is based on a ‘take-make-waste’ model: we take natural resources (extraction) to make products (production/manufacturing) and when we’re done using them (consumption), we dispose of them (waste/landfilling). 

         LINEAR ECONOMY

At the take/extraction phase, this is an issue because we don’t have access to unlimited natural resources. Today, we are using about 1.6 earths; meaning we’re using about 50% more of the earth’s resources than it can regenerate every year. By 2050, with an increased global population and resulting rise in consumption, that “overshoot” could get to 3-4 earths, which is clearly unsustainable. From a climate crisis perspective, extraction––a key part of our linear economy––is responsible for “53% of the world’s carbon emissions” and “more than 80% of biodiversity loss,” according to a study done by UN Environment. 

At the other end of the linear value chain, waste/landfilling is also directly contributing to greenhouse gas (GHG) emissions and our climate crisis. Why are landfills especially insidious? In addition to taking up otherwise productive land, this explanation from Waste Dive is especially helpful: “when trash is packed into a pile, the oxygen-free environment supports bacteria that thrive in those conditions. As the microbes degrade the waste, they release carbon dioxide and methane. The latter is…84 times more potent of a global warming agent than carbon dioxide in the first 20 years of its release.”

And while we know that methane released in landfills is particularly harmful to the environment, we are still learning about the extent of their impact. In the United States, a recent multi-year aerial study of “super-emitter landfills accounted for 43% of the measured emissions of the potent greenhouse gas methane––outpacing the fossil-fuel and agricultural sectors” while “the ten biggest methane-emitting landfills pumped out the gas at rates averaging 2.27 times the federal estimates.”

How does a circular economy help address the climate crisis?

Transitioning from a linear to a circular economy is critical to addressing the 45% of emissions associated with our current models of production and consumption. Unlike the linear “take-make-waste” model described above, a circular economy eliminates the concept of waste altogether, moving us into a more closed loop system where materials and products are kept in use as long as possible. In doing so, the circular economy tackles some of our greatest social and environmental challenges while unlocking $4.5 trillion in economic value by 2030.

         CIRCULAR ECONOMY

As you’ll notice in the diagram above, the two emissions-heavy ends of the linear value chain––extraction and landfilling––are eliminated, as they are not valuable in a circular economy. How do you eliminate such prevalent parts of today’s value chain? 

Let’s start with extraction of natural resources. Since the beginning of the first industrial revolution, we’ve had a nearly 1:1 relationship between economic growth and the use of natural resources. According to UNEP, global extraction of natural resources has more than tripled since the 1970’s and by 2060, “global material use could double to 190 billion tonnes (from 92 billion), while [GHG] emissions could increase by 43%.” While improving resource efficiency is helpful, our current and projected extraction rates (and associated GHG emissions) are largely influenced by increased consumption and our reliance on single-use products and packaging made from finite natural resources, like fossil fuels. 

In a circular economy, the use of toxic, single-use or non-renewable inputs are reduced, and ideally eliminated. Circular design and sourcing instead favor inputs that do not rely on extraction of natural resources, valuing materials that are renewable, regenerative, reusable and recyclable. 

But we can’t just focus on better and more sustainable inputs to our products. Valuable materials, including those that are naturally sustainable like food, can still end up as “waste” in the environment and in landfills, resulting in carbon dioxide and methane emissions. Today, the world produces over 2 billion tons of solid waste, and that’s expected to grow to 3.4 billion tons by 2050. By volume, global waste includes 44% food and organics, 17% paper and 12% plastic––all materials that could be valuable in a circular economy. 

By keeping products and materials in play as long as possible––by extending the life of products and reprocessing materials at end of use––the circular economy eliminates the need for both extraction of natural resources and landfilling or incineration of goods. Circular systems prioritize local, “short” material loops in which communities benefit from valuable materials re-entering local manufacturing supply chains, creating new jobs, spurring innovative end markets and fostering a healthier environment. By advancing local solutions, the circular economy provides more communities with the tools needed for resilience against a globally changing climate, and, of course, reduces or eliminates the significant GHG emissions and economic costs associated with the linear economy. 

How can we accelerate our climate commitments through the circular economy?

Investments, innovations and regulations that encourage a circular economy see materials as valuable commodities rather than products of a single-use, extractive-intensive and wasteful society. Let’s explore a few examples across the linear to circular value chain.

Keeping materials in play. Over 500 companies have signed the Global Commitment for a New Plastics Economy, including the world’s largest consumer goods companies. At the same time, less than 9% of plastics are recycled globally. Investments in the collection, sortation and reprocessing of materials – including plastics, glass, paper, aluminum, etc. – are critical to keeping materials in play and reducing what is sent to landfills. For example, Eureka Recycling, a locally operated nonprofit Material Recovery Facility (MRF) in Minneapolis, was able to increase its recovery of recyclables  by 13% by upgrading equipment to improve sortation capacity. This resulted in 1 million pounds more of PET plastic recovered annually, which is the same as almost 20 million plastic water bottles. If lined up, this would be enough water bottles to connect New York to San Francisco. By keeping these valuable commodities out of landfills, we reduce the need for extraction to produce virgin plastics.

Some materials can be more difficult to recycle or reprocess at the end of use. Cotton, a highly resource-intensive crop, is an example of a popular material that is not often reprocessed or recycled, especially post-consumer use. Circular startup Evrnu has developed a novel technology to transform challenging textiles like 100% post-consumer cotton into new, like-virgin materials. Similar to the example above, this kind of solution eliminates the need, costs and emissions impact of extraction (production of virgin cotton) and landfilling (used cotton to waste). 

Finally, some materials like organics––food scraps, yard and agricultural waste, human waste, etc.––are not a great candidate for reuse or reprocessing. In a circular economy, we can turn organics into valuable sources of energy and fertilizer. Israel-based HomeBiogas uses anaerobic digestion to convert organic materials into fuel for cooking or hot water. In addition to reducing the costs and emissions associated with sending food waste to landfills, this circular solution creates valuable products that reduce the need for extraction (e.g. cooking fuel) and improves soil health (e.g. natural fertilizer).

Switching to more sustainable materials. Rather than focusing on the end-of-life of products and keeping materials in play via models like recycling, some circular solutions are focused on alternative materials that are less extractive and more sustainable from the outset, while still maintaining the same performance as traditional materials. Algaeing, for example, is using biodegradable and energy-efficient algae as an alternative material for fashion and textiles. In addition to reducing the use of water and eliminating the need for toxic chemicals and pesticides commonly used in textiles, their algae alternative reduces the costs and emissions associated with both extraction/production and landfilling of materials like cotton and polyester.

Reducing the need for materials. Half of all packaging is designed to be used only once––also known as “single-use packaging”––and then thrown away. Most often, that packaging is not the primary source of value of a product, as we’re usually buying what’s inside. Think of a bottle of shampoo or detergent – a big part of the item cost is for the packaging, which doesn’t really offer value to the consumer. Started in Chile to address economic and environmental issues associated with the packaging of household staples like cleaning supplies, Algramo’s smart vending machines dispense products “by the gram” (hence the name!) into reusable containers. This reduces both the environmental impact and cost associated with single-use packaging, and provides a much more convenient way for people to buy common goods.

Extending the life of our stuff. Outside of single-use packaging, more and more “durable” items are prematurely thrown away, despite having multiple uses or “lives” left in them. This is exacerbated by the rise in on-demand purchasing via eCommerce and “fast consumption” lifestyles. Several startups are looking to reverse this trend, by finding both economic and environmental value in circular business models that extend product use to multiple consumers. For Days, for example, has developed a circular business model for typically fast fashion items like t-shirts and sweatshirts. They incentivize customers to return clothing at end of use through discount pricing and reverse logistics, keeping apparel out of landfills. 

We can even extend the life of organic products like food. As mentioned above, food waste is a significant part of landfills and a dangerous contributor to both methane production and food insecurity. Start-up Mori has developed a tasteless and sustainable coating, inspired by the Mori silkworm, to extend the life of perishables like fruit, vegetables and seafood. In addition to reducing the amount of food waste that ends up in landfills (contributing to climate change via methane emissions), Mori’s solution also reduces the need for food packaging, further reducing emissions and costs associated with the extraction and landfilling of single-use packaging.  

So, what’s next? 

Circular economy business models offer a clear pathway toward achieving our collective climate goals, tackling the greenhouse gas emissions tied to the extraction, processing, manufacturing, and landfilling of goods. Already, there is a burgeoning ecosystem of innovators that are breaking away from the take-make-waste linear business model in favor of a circular economy, in doing so benefitting people, the planet, and business.

Next in Closed Loop Partners’ climate series, we’re going to explore how we can enact change more quickly to accelerate the transition to circularity.  What are the levers we need to collectively pull? Who are the key stakeholders involved? What are we asking of governments and corporations? 

The Comeback of Reuse, and the Path Forward

By Georgia Sherwin, Director of Strategic Initiatives & Communications

June 16, 2021

Many feared that the COVID-19 pandemic would push climate and sustainability priorities to the backburner, but the opposite proved true. Setbacks on the use of reusable bags and cups were only temporary as the world adjusted, and overall we witnessed an increase in popularity of reusable packaging solutions that alleviate the waste associated with single-use packaging. Consumer demand, behavior changes brought on by the pandemic, regulatory shifts, technological developments, the strong business case for resource efficiency and the need to protect our environment are all driving the growth of modern reuse models. As cities, towns and states across the U.S. start to reopen, and with Starbucks’ recent announcement that personal reusable cups will be accepted once more (on June 22), it’s critical that we examine the potential of these models, why they’re growing and how to remove any potential roadblocks in their pathway to scale

First, the basics: What do reuse models look like?  

Think back to the milkman model and then add a few more bells and whistles; you’ll land at today’s optimized refill and reuse models. From personal care products to beverages, refilling reusable containers is becoming more popular. There is no one size fits all when it comes to reuse. Some models are tech-enabled, which helps companies track, discount and incentivize reusable and refillable packaging, while gaining customer insights. Other models have completely closed loop systems, with collection, washing and disinfecting stations embedded in the dispensing machines to sanitize and return packaging onsite. And finally, the simpler models of previous decades hinge on “bringing your own” packaging to collect your products. 

Why are reuse models growing so quickly in 2021? What are the effects of the COVID-19 pandemic on reuse?

Heightened visibility of single-use plastic waste during the pandemic has further galvanized consumers and brands

As lockdowns were implemented across the U.S., many of us turned to food delivery. Amid a global health crisis, these services were a lifeline. But after relying on them day in and day out, the resulting pile of single-use plastic containers, cutlery or sachets mounting in the trash has become too much to ignore. Headlines across the globe extol these concerns, noting that COVID-19 has “supercharged” the world’s takeout habit and left a big mess, or that plastic waste has surged as restaurants use more disposable packaging. The same trend was seen with single-use masks, which now litter streets across the globe. With this heightened visibility of waste, more consumers are now clamoring for alternatives to single-use. 

Meanwhile, brands are doubling down on their sustainability efforts, including the implementation of reuse models. To name just a few examples of businesses prioritizing circularity amid the pandemic, in 2020 Closed Loop Partners convened 13 leading retailers representing more than 50,000 stores in the U.S. to reinvent the retail bag as part of our Beyond the Bag Initiative. This year, the initiative announced multiple winning reusable bag solutions that will be piloted over the coming months. Our portfolio company, Algramo, expanded to the U.S. in 2020, working with brand partners like Clorox and Colgate-Palmolive to offer refill services for household cleaning products in reusable packaging. Similarly, early in 2021, Burger King in the U.S. and Japan and Tim Hortons in Canada piloted reusable, container programs through Loop, a circular packaging platform. Just Salad also announced its plans to expand its popular reusable bowl program for digital orders.  

Increased digital literacy amidst the pandemic has helped better prepare us for the reuse revolution 

At the beginning of 2020, the concept of scanning a QR code to see the menu at a restaurant was likely alien, and laborious, at best. Yet today, ordering food at any restaurant often now involves scanning a QR code to see the menu. COVID-19 has fundamentally accelerated the digitization of our daily lives, as businesses and stakeholders across the globe experiment with increasingly “contact-less” or “automated” processes. The resulting uptick in e-commerce, and subsequent familiarity with a host of digital applications, including mobile wallets and tap-and-go payment systems, have helped to change habits and increase our collective digital literacy. 

This progress has laid the groundwork and opened many possibilities for the future of reuse models. Reusable packaging today often harnesses state-of-the-art technology to build smart systems that provide transparency to the user and useful analytics to the producer––bringing value to both retailers and customers. QR codes or radio-frequency identification (RFID) tags enable stakeholders to check a reusable product, for example a cup or bag, in and out along its lifespan, increasing visibility and in doing so creating opportunities for incentives for customers to return their packaging. The more familiar we become with QR codes or RFID, the smoother and easier the transition to reuse models will be.

Growing regulatory pressures in the U.S., including single-use plastic bans, are accelerating momentum for reuse  

The landscape of U.S. policies around materials management is changing rapidly in response to the urgency of the plastic waste challenge. The recent Break Free from Plastics Act 2021 not only lays the foundation for extended producer responsibility in the U.S., but also incentivizes businesses to create reusable products that can remain in circulation for multiple uses, moving away from single-use. These shifts in federal legislation are further bolstered by single-use plastic bans across multiple U.S. states, including California, Connecticut, Delaware, Hawaii, Maine, New York, Oregon and Vermont. Most recently, Washington state fast-tracked its plastics phase-out, with goals to ban single-use bowls, cups, plates, cutlery, straws, polystyrene food containers, thick plastic bags and helium balloon releases by the end of 2021, four years earlier than its initial 2025 target. As these regulatory shifts continue to gain traction, it will be critical to move toward a more collaborative and holistic approach across states to create a consistent regulatory environment, as businesses adapt their operations to integrate reuse models and other circular solutions. Right now regulations vary per place, and businesses must adapt accordingly. A more holistic approach could help align interests and accelerate consistent educational messaging to advance circularity. 

The odds seem in the favor of reuse right now, but what’s the catch? What do we need to watch out for? 

Reuse models must prioritize accessibility and convenience, or swathes of the population will be left behind 

As the “hippies” of the 1970s championed the protection of the earth and the promotion of sustainable practices like “reuse,” so have today’s affluent “yuppies” taken up the cause. As a result, sustainable products are now most often associated with a hefty price tag. But to move from serving a niche sliver of the population to the mainstream, reuse models need to work for everyone. They can’t be limited to high earners, nor can the ushering in of “smart,” tech-enabled reuse systems forget that not everyone has a smartphone or credit card.  Reuse models will be most successful when the needs of multiple stakeholders are integrated, to build widespread acceptance and accelerate uptake. We will need a multitude of innovations to fit different contexts—geographic, economic & social. 

Algramo is one company that is making reuse more affordable. The company’s system not only reduces single-use packaging waste through the use of reusable containers, but it also allows families to buy what they can afford. Through Algramo’s vending machines, customers can choose to purchase the exact quantity of cleaning product they need in bulk pricing, no matter how small the amount. 

Thorough analysis of the environmental impact of reuse models is necessary to evaluate any potential tradeoffs 

To be the most appropriate fit for a product or packaging, reuse models must have a net positive environmental impact. Last year, our NextGen Consortium––a convening of leading foodservice brands, including Starbucks and McDonald’s––piloted several reusable cup systems designed to reimagine a more sustainable beverage experience. These pilots demonstrated the need for stakeholders to consider two core principles for product design: 1) build to last and 2) build to be recovered. And yet, all materials used for packaging, even within reuse models, have an environmental footprint. To choose the least impactful material, its entire lifecycle must be taken into account. There are the upstream environmental costs to consider––for example, how energy intensive it is to extract the material––as well as the downstream costs of recovering materials after use. The number of times reusable packaging is used also ties directly to its environmental impact, as does its end-of-life pathway. For example, glass might be aesthetically appealing for customers, but it is heavy––making it more costly and emissions-intensive to transport––and is more difficult to recover.  Faced with this choice, reusable plastic options could be the more lightweight and recyclable option. 

While there are no simple answers, there are many possibilities. The pandemic has urged us to rebuild the status quo, and the runway for reuse models is being cleared. As we move forward, evaluating each reusable product or packaging application in its full context––with its entire life cycle and its operating market in mind––can help ensure that the reuse models of the future are economically sound, environmentally responsible, and accessible to and inclusive of all communities. As the conditions grow more optimal for the rise of reuse, we look forward to continuing the work needed to scale these models to their full potential, including building partnerships with brands to accelerate uptake.   


Closed Loop Partners invests in cutting-edge reuse and refill models through its investment funds, while also testing, piloting and scaling new reusable packaging solutions through its Center for the Circular Economy. In partnership with Upstream, Closed Loop Partners has also helped to launch the first national reuse awards in the U.S. — The Reusies. This inaugural event celebrates the pioneers, the trailblazers, the innovators and game-changing heroes who are working and advancing systemic change and solutions to create a world where we can get what we want and need without all the waste. Nominate companies and individuals here

What is the Role of Plastics in the Circular Economy?

By Ron Gonen

May 26, 2021

From lauded silver bullet to pariah material in just over half a century, plastic has played a complicated role in our economy. What began as an innovative material that was relatively inexpensive to produce, lightweight to transport, versatile in application and efficient in preserving goods, has resulted in 8.3 billion metric tons of plastics produced since the 1950s, half of which was produced in the past 15 years alone. Yet, while economies of scale drove down the cost to produce plastic, its costs showed up elsewhere––in the billions of tax dollars spent to send plastic to landfills, and in its degradation of our environment and communities. About 60% of plastics produced have already ended up in a landfill or the natural environment. At the rate we’re going, there could be more plastic than fish (by weight) in the ocean by 2050.

The plastics waste challenge makes clear the urgent need for us to identify a path toward a waste-free future. To achieve this ideal in the midst of today’s take-make-waste reality, a range of solutions need to be in play at the same time. To address plastic waste at every stage of the material’s life cycle––from source, to use, to end-of-life and back again––every stakeholder across the value chain must be involved. No one institution or solution can build the circular economy alone, and even if they could, change would not happen fast enough to address the urgent climate challenge. With any system-wide transformation, the path forward is complex, nuanced and involves experimentation. A collaborative, multifaceted approach can accelerate the process in a more thoughtful, holistic way. 

At Closed Loop Partners, we envision a circular future for plastics. This requires building a system that reduces the need to extract virgin resources––fossil fuels––to make plastics, harnesses design innovation and material science, and champions reuse models and new product delivery models. In parallel, we must strengthen the recycling infrastructure needed to capture existing plastics after use. With over 50 investments across our funds and three pre-competitive industry consortia to solve shared material challenges, led by our Center for the Circular Economy, we act across four key pillars to advance circular plastics supply chains.

1. Scale Reusable Products and Packaging and Explore New Materials to Reduce the Need for Single-Use Plastics
Our work to build the circular economy begins at the source, by rethinking the kinds and quantities of raw materials we use, and the supply chains they flow through. Reuse, refill and resale business models keep valuable materials in play, and therefore reduce the need to extract virgin resources. At the same time, material science innovations help diversify the resources we rely on to create packaging and products. For example, organic materials, including algae, mushrooms, eucalyptus, coconut fibers and corn that are rapidly replenishable and could be composted at end-of-life, represent viable alternatives to plastics for packaging and textiles. 

How do we do this?

Our Closed Loop Ventures Group invests in leading reuse and refill models, exemplified by our portfolio company, Algramo. The Chilean-based company entered the North American market in 2020, piloting their tech-enabled refill system and smart reusable packaging in New York City. Their vending machines allow customers to dispense household cleaning products by the gram, getting exactly the amount of product they need into a smart, reusable container, eliminating single-use plastic packaging. Algramo not only makes the sustainable option the most affordable alternative, but also the more accessible and convenient one.

At an even earlier stage, our innovation arm, the Center for the Circular Economy, tests emerging reusable packaging models through the NextGen Consortium and the Consortium to Reinvent the Retail Bag. In 2020, our NextGen Consortium, in partnership with Starbucks, McDonald’s and other leading foodservice brands, conducted in-market tests for new reusable hot and cold cup models at local cafes in the San Francisco Bay Area. The Consortium examined every step of the reusable cup journey: from customer sign-up, to the payment process, to cup returns. Building on our learnings, we released a report on Bringing Reusable Packaging Systems to Life, an open-source resource that highlights steps for implementing reuse models. 

Our Center also researches climate-friendly material innovations like compostable packaging, as one viable solution to plastic waste when the necessary recovery systems are in place. The Center’s Compostable Packaging Consortium aims to create a decision-making framework on when to deploy compostable packaging, while building an investment roadmap to scale the composting infrastructure needed to handle these formats at their end-of-life.

2. Collaborate with Diverse Stakeholders to Accelerate Change at Scale
To move from a linear system to a circular one, every stakeholder that will be affected––including consumers, entrepreneurs, corporations, NGOs, cities, policymakers and governments––must be at the table. Creating systemic change requires collaboration across the value chain, inviting numerous perspectives and areas of expertise, and aligning on shared goals. 

How do we do this?

Last year, our Center formed the Consortium to Reinvent the Retail Bag, an unprecedented multi-sector effort by leading retailers, including CVS Health, Target and Walmart, to address a common material challenge: the single-use plastic bag. Brands across the grocery, sports & outdoor goods, value, apparel & home goods sectors aligned to address shared environmental and operational challenges to move beyond short-term fixes to long-lasting, systemic solutions for how customers get their goods home. In February 2021, nine winners of the Beyond the Bag innovation challenge were selected from a pool of more than 450 innovations, and are now testing and refining solutions to improve their potential to scale.

3. Invest in Recovery Infrastructure to Recapture and Recycle Plastics, and Reduce the Need to Extract Virgin Resources
The value of plastic is not lost after a single use; keeping the material within supply chains is a matter of our economic self-interest. As corporate commitments to use post-consumer recycled materials increase, the demand for recycled plastics continues to grow, enabling a viable market. Yet, without the necessary recovery infrastructure, current supplies of recycled plastics only meet 6% of demand for the most common plastics in the U.S. and Canada. Optimizing recycling facilities and new advanced recycling technologies, among others, can increase the supply of high-quality, clean recycled material feedstocks, maximize their value over multiple lifecycles and reduce our reliance on virgin inputs dependent on the extraction of fossil fuels.

How do we do this?

Our Closed Loop Infrastructure Fund, established when the firm was founded in 2014, has helped municipalities and private companies across North America upgrade and expand their recycling infrastructure for materials––from glass, to paper and plastic. For example, the fund provided a $3 million below-market rate loan to the City of Phoenix, to upgrade its recycling facility and enable greater diversion of plastics from landfill and improve the quality of baled paper produced. This helped the city’s materials recovery facility reach its highest revenue to date in May 2020, at over $400,000, with an 18% increase in tons of residential recycled materials collected during the COVID-19 pandemic. 

Our recently launched Closed Loop Circular Plastics Fund provides catalytic debt and equity financing, spurring additional mainstream investments into recycling infrastructure that can help address bottlenecks in the system for rigid and flexible polyethylene and polypropylene––plastics that need more targeted interventions to help meet their high demand in the U.S. and Canada. The commitment of stakeholders at every point of the plastics value chain is critical to evolving the plastics industry toward a more sustainable future. The founding companies invested in the fund are plastics producers and chemical companies, who have been key players in unlocking the value of resin resources through material and chemical innovations; now there is opportunity to adapt their processes to maximize the value of plastics already in circulation, championing the recovery and remanufacturing of resins to extend their useful life. 

We also look to solutions that help address some of today’s most difficult-to-recycle plastics, those that cannot be processed by traditional mechanical recycling facilities. The Center’s research on advanced recycling technologies uncovers how these technologies––purification, decomposition and conversion––can help recycle many more types of plastics, expanding the scope of recoverable materials far beyond just packaging. In 2019, we conducted a landscape mapping of the technologies and opportunities, and are now conducting deeper research into the environmental impacts, policy incentives and financial case for these technologies. 

4. Sustain Markets for Recycled & Climate-Friendly Materials
With the market rewarding sustainability, circularity does not mean sacrificing profits. Today, there is a market incentive to keep valuable materials within the system, instead of sending them to landfill, which costs taxpayers money and wastes $10 billion worth of materials in landfills across the United States*. Investing in companies and product innovations that incentivize the use of recycled materials or climate-friendly materials capitalizes on opportunities created by a strong, vibrant circular economy. 

How do we do this?

Many of Closed Loop Partners’ portfolio companies manufacture products and packaging using recycled or new sustainable materials, proving viable, circular business models. For example, our portfolio company, AeroAggregates, produces ultra-lightweight fill material for infrastructure construction projects from 100% post-consumer recycled glass. Our Venture Group’s portfolio company, Algaeing, manufactures algae-based dyes and fibers within a zero-waste system––enabling water and energy efficiency while creating a viable alternative to petroleum-based textiles. 

Our portfolio company, For Days, offers direct-to-consumer apparel made from 100% organic cotton and designed for recovery with a mail-back program. They recently launched its Closet and Credit system, which gives customers credit for returning their used clothing items. They can then use this credit toward new items sold by the company, enabling a circular zero-waste system for their clothes by turning their “closet into currency.” 

To effectively build a circular economy, all of these solutions need to be in play. A successful circular economy is one where every material’s value is recognized, shared, re-used and continuously cycled. Addressing the global plastics crisis requires seeing and solving it from multiple angles; there is no panacea. We need to address today’s reality, in which billions of tons of plastics already circulate in our economy––while building for a waste-free tomorrow. 

 

*Closed Loop Partners. Research Brief: Materials Landfilled in the United States and Opportunities to Increase Materials Recovery, 2018 Update. Closed Loop Partners Internal Research, 2019, adapted from Powell and Chertow, 2018, Powell et al., 2016, and Powell et al., 2016.

To Package or Not to Package? 3 Critical Steps to Advance Sustainable Food Packaging

By Kate Daly

May 06, 2021

Today, brands and manufacturers are faced with endless choices and tradeoffs when it comes to food packaging. Take the packaging options for cheese. From individual foil-wrapped wedges to a round of Camembert packaged in its own rind to plastic-wrapped singles, to resealable plastic bags of shredded cheese, the multitude of options reflect the broader trend of diversifying packaging designs. Yet, which is the most cost-efficient option? Which creates less waste? What supports the longest shelf life? In today’s food system, these questions are relevant to every packaged food item — and packaging design determines not just how much packaging waste results, but also plays a role in how much food waste is generated. 

From a packaging perspective, the more sustainable option is often assumed to be the option that looks the most natural, or organic — the one with less plastic, or less material overall. In many cases this is true, but the assessment of “sustainability” becomes more complex when the package’s contents are food — one of the biggest sources of greenhouse gas emissions when mismanaged and wasted.

In its recent U.S. Climate Summit, the Biden administration set the ambitious goal of reducing GHG emissions in the U.S. by 50 to 52 percent by 2030, compared to 2005 levels. It remains critical to keep the significant climate impact of the food system top of mind. The energy used to produce food and transport it to our plates is enormous. According to a United Nations study, one-third of global greenhouse gas emissions caused by human activity can be attributed to the way we produce, process and package food. And despite all the energy used to create this food, in the U.S. we throw away $43 million worth of it into landfills, where food waste emits greenhouse gases as it decomposes.

Since the earliest days of global food supply chains and industrial food manufacturing, food, food packaging and environmental impact have been intrinsically linked. At Closed Loop Partners, we invest in companies and business models that create innovative, waste-free solutions that prevent resource loss. When looking at the intersection of packaging and food, we believe that setting the course for a more sustainable path forward begins with three initial steps.

1. Consider the tradeoffs

Let’s revisit the cheese packaging options. The choices with bigger servings in their own rinds or in less packaging may seem more environmentally responsible overall, the rationale being the less packaging the better. And ideally the packaging used is widely recyclable or compostable. For households where all the cheese will be eaten within a certain time period, these options with little to no packaging might be the lowest waste option. But what if not all the cheese is eaten before it spoils? That’s food waste that could have been avoided if a smaller portion, albeit with a higher ratio of packaging to product, was chosen. Today, 31 percent of shoppers buy fresh produce in bulk to avoid unnecessary packaging. When aiming to reduce packaging waste, this is an effective tactic. But 53 percent of consumers have said that they waste more food when buying in bulk. According to the National Zero Waste Council, for many types of foods, “any GHG reductions achieved by not pre-packaging food are quickly outweighed by even a minor increase in food waste.”

57% of U.S. consumers want more resealable packages, and 50% want more variety in product sizes.

As eating and cooking habits change, more consumers today are looking for packaging that caters to storing food in their kitchens for longer, using small quantities at a time or buying smaller quantities at a time. Fifty-seven percent of U.S. consumers want more resealable packages, and 50 percent want more variety in product sizes. Particularly, they want to see baked goods, bagged salad, bread and meat available in smaller package sizes. How can we ensure that these preferences, which align with a reduction in food waste, can be met with more sustainable packaging options?

2. Invest in smarter packaging design

Innovation in packaging design can help reconcile the tradeoff between food waste and excess packaging. Smarter packaging works not only for the benefit of the food it contains, but also for the retailers and customers it serves. Emerging “active” and “intelligent” technologies help slow spoilage, giving information on food quality or safety, as well as enabling transparency across supply chains.

Where are we seeing progress? Closed Loop Partners invests in companies across the food and agriculture sector to strengthen every stage of the value chain — from farm to transport, retail, consumption, waste collection, food scrap and organics processing and back to the farm. We have invested in TradeLanes, a company that digitizes trade execution for container ships, increasing transparency in the global trade system to make the process faster, easier and more profitable. By better understanding where and when goods are in port versus in transit, we can ensure the right storage and create the optimal conditions for the transportation of food.

We’ve also invested in Mori, a company that has commercialized silk-based edible coatings that prevent food spoilage in transport and at retail and reduce the need for packaging. Its innovations — coatings applied directly to food, films to replace plastics — can be applied to whole or cut produce, prepared food, raw meat, seafood and processed foods. The edible coating is safe to eat, invisible, tasteless and virtually undetectable. Because it keeps food fresher for longer, less food goes to waste, which benefits the grower, farmer, shipper, processor, retailer, consumer and planet.

Improved package design and active and intelligent packaging also have a combined net annual financial benefit of $4.13 billion.

3. Collaborate to accelerate systemic change

To create system-wide change, stakeholders across the plastics and packaging and food and agriculture sectors and recovery systems need to be at the table together. We’ve seen the power of collaboration thanks to our work in the NextGen Consortium, launched by our Center for the Circular Economy to convene leading brands, industry experts and innovators to reimagine foodservice packaging and reduce waste. The Center’s new Compostable Packaging Consortium is deploying a similar pre-competitive, collaborative approach to identifying greater opportunities for the recovery of compostable packaging, in particular the role packaging can play in increasing food waste diversion from landfills.

In line with this work, we are partnering with the Sustainable Packaging Coalition (SPC) and its new initiative, Food Waste Repackaged. The initiative brings together experts and innovators to address the urgent challenge of food waste, exploring and advancing the role of packaging in addressing this waste in consumers’ homes, food service and retail and spurring new packaging innovations. Closed Loop Partners is proud to partner with SPC, together with GreenBiz, Packaging Europe, ReFED, RILA and Ubuntoo, on a Learning Series, Innovation Challenge and Mentorship Program to help tackle this problem.

When done thoughtfully and collaboratively, packaging reduction and design innovations present robust environmental, economic and social benefits. Preventing food waste is a top solution to climate change, and changes to packaging design could help prevent 650,000 tons of food waste a year in the U.S. Improved package design and active and intelligent packaging also have a combined net annual financial benefit of $4.13 billion. Catalyzing these solutions, and inviting dialogue across multiple stakeholders, brings us a step closer to building a more efficient, less wasteful food system.

 

Originally published in GreenBiz.

Circular Economy Infrastructure Will Build Value For All Americans

By Ron Gonen

May 03, 2021

The circular economy is becoming big business in America. For example, just one piece of the circular economy, the recycling industry, generates over $100 billion in economic activity, nearly $13 billion in federal, state and local tax revenue and supports over 500,000 jobs annually. 

On a more personal level, as global supply chains began to crack during the COVID-19 pandemic, our domestic recycling infrastructure saved us from major shortages of critical consumer products — like toilet paper. But that is only a fraction of the value the circular economy can provide on both a local and national level.

A policy known as Extended Producer Responsibility (EPR), now being introduced at the state and federal level, would create a massive investment in local recycling and circular economy infrastructure. Through a fee paid by consumer goods companies, thoughtfully-constructed EPR will save billions of dollars spent annually in landfill disposal fees. It would create hundreds of thousands of local jobs and provide consumer goods companies a reliable and cost-effective alternative to their current dependence on limited raw materials, which generate enormous amounts of greenhouse gas (GHG) emissions during extraction.

In the past, advocating that companies take responsibility for the sustainable management of their products was the sole domain of environmentalists. But we are now seeing multiple stakeholders, including CEOs, politicians, customers and shareholders align on the view that when brands invest in local recycling and circular economy infrastructure to protect the environment, it creates value for businesses too. In New York this January, State Sen. Toddy Kaminsky (D) introduced an EPR bill that has gained broad support, and similar legislation has been introduced or is being considered in California, Colorado, Hawaii, Maryland, New Hampshire, New York, Oregon, Vermont and Washington state.

A select group of CEOs of major consumer goods companies have recognized that what happens to a product after its initial use poses a risk — but when managed properly, can be an opportunity to secure long term value. Mark Schneider, the CEO of Nestlé, wrote recently, “[B]old and meaningful action in this space can become a competitive advantage, contributing to improved market share and growth.” Former Unilever CEO, Paul Polman, saw the opportunity to meet consumer demand years ago and trailblazed with sustainable business practices and products. During his decade-long tenure as CEO from 2009-2018, Unilever’s stock price increased by 290 percent. Investors took notice. Alan Jope, Unilever’s current CEO, has continued to expand Unilever’s commitment to sustainable business practices.

Three considerations are key to make EPR successful. First, stakeholders should gain consensus on the goal for EPR and incentivize brands to achieve it. Second, we should update the definition of “recyclable” to ensure that only products that are profitable for municipal recycling programs are designated as recyclable. Third, we must allocate funds from an EPR program directly to municipal recycling programs and empower local leaders to invest the funds in the infrastructure required to achieve their waste reduction goals. Styrofoam is an example of a packaging material that is challenging to recycle and has a limited market, while aluminum is infinitely recyclable and has a strong market.

For true accountability, all parties should set a goal for the policy and decide how to measure progress. Experience shows us that the best objective would be a recycling rate percentage well above today’s average recycling rate of around 30 percent, and a percentage of post-consumer recycled content used in the manufacturing of a product or packaging. EPR fees charged to consumer goods companies should not be viewed as the goal, but as a means to achieve the goal of a fully circular production system, where reliance on natural resource extraction and landfills is limited. Therefore, incentives for brands — fee waivers, designation to consumers and public recognition — are key for products to achieve a high recycling rate and use of recycled content. Where it’s not possible for producers to currently meet such goals for a particular product due to technical or economic limitations, this system and waiver could help incentivize producers to switch to recyclable or compostable materials or adopt reusable packaging models.

Which brings us to the next: a clear definition of what “recyclable” means. Recyclable has traditionally been defined as the ability of a product or material to be collected and sorted by a recycling facility in the United States. This does not take into account the economics of the recycling industry and the municipal recycling programs that are expected to remain solvent and grow. The result: consumer goods companies claiming that a product is recyclable, while municipal recycling programs struggle to find profitable end markets for it.

“Recyclability” should be defined as “a product whose primary material is sold by a municipal recycling facility for a profit.” Therefore, in order to receive a designation of “recyclable,” a product should have a market value of above the processing cost of materials (paper, metal, glass, plastic) at municipal recycling facilities across the United States. This stipulation would encourage producers to be more rigorous from the outset regarding their packaging design, connecting the diverse pieces of the system, from designer to producer to recycler, so that all stakeholders are in agreement that a product has value in a circular system. The EPR fee structure should be designed to motivate brands to ensure that their product is recyclable (per the definition above), is recycled and uses all or mostly recycled content in manufacturing.

Third, we should allocate funds from an EPR program directly to municipal recycling programs, empowering local leaders to invest the funds in infrastructure and innovation. It is critical that legacy policies, such as bottle bills that conflict with municipal recycling collection programs, be phased out as EPR policy is adopted. There are a number of leaders that have accomplished amazing things with limited funding, showing that investments made directly in local municipal recycling programs and at the direction of local leaders will yield the best results.

While EPR won’t solve all of our waste issues, thoughtfully-constructed EPR will provide the foundation for the development of comprehensive recycling and circular economy infrastructure in the United States. And with thoughtful incentives, companies that strive to be leaders in reducing waste, will be recognized and rewarded.

We are a country that has demonstrated that when the interest of business aligns with the interest of policy makers and local communities, we can develop infrastructure that creates massive long-term value. Thoughtfully-constructed EPR has the potential to do just that.

Ron Gonen is the CEO of Closed Loop Partners, a circular economy-focused investment firm and innovation center and author of “The Waste Free World: How the Circular Economy will Take Less, Make More, and Save the Planet.”

Originally published in The Hill.

What Tomorrow’s Retail Bag Looks Like

By Kate Daly

February 16, 2021

Hint: It’s not a single-use plastic bag.

12 minutes. That’s how long it typically takes from the moment we receive a single-use plastic bag to the moment we discard it. And those 12 short minutes barely register within the much longer life cycle of the plastic bag. The story of the plastic bag starts with extracting finite fossil fuels––like natural gas ––and usually ends in landfills, or worse, in our oceans, where they take decades to break down. It’s time that we identify a better, more resilient way forward for retail––one that maximizes valuable resources and benefits the customer, the retailer and the planet.

Every year, 100 billion single-use plastic bags are used annually in the U.S., and fewer than 10% of those are recycled. Plastic bags continue to be one of the top ten most littered items on our beaches, contributing to a mounting global waste crisis. And now, the urgency of these environmental challenges are coming head-to-head with a rapidly changing retail landscape, as a result of the COVID-19 pandemic. Stay-at-home mandates from many governments and work-from-home policies from many companies are driving the growth of e-commerce and digitization as consumer habits shifted almost overnight. This shake-up in retail norms presents the ideal moment for reinventing the single-use plastic bag through new business models and design innovation. If there was ever a time to rethink the status quo of our retail system, it is now. 

The plastic bag plays a pivotal role in the retail experience; whether you’re buying groceries, ordering a shirt for delivery or picking up a prescription. It’s an extension of the store beyond its premises, and a convenience to the consumer, as we carry our goods home, pick them up from the curb or receive them at our doorsteps. To address the challenges of this shared experience around the plastic bag, we need a whole suite of  solutions that can fit the varied retail contexts and customer needs across different geographic, social and economic environments.  

This week, our Consortium to Reinvent the Retail Bag’s global innovation challenge, the Beyond the Bag Challenge, identified nine winning solutions that show the breadth and real-world promise of solutions that already exist to help reinvent retail and the plastic bag . Each brings a unique contribution to creating a new way to get our goods home, and together they can help pave the way forward, capitalizing on current market trends and shifting consumer habits in order to advance larger, industry-wide sustainable change. 

 

Tracking the bag throughout its life

New digital technologies make it possible for customers and retailers to see well past the 12 minutes that elapse between the current checkout counter to disposal of today’s single-use plastic bag. They provide a clearer, more holistic picture of the lifespan of the bag, and with it, elevate the transparency of entire supply chains.

EON uses the Internet of Things (IoT) to help retailers track inventory, manage reverse logistics and understand how bags are used by monitoring impact data throughout the bag’s value chain, and extending lines of sight into their full lifecycle.

SmartC, a solution co-created by 99Bridges and Envision Charlotte, leverages IoT technologies to connect reusable bags, enabled by smart tags, at participating retail stores, allowing retailers to reward customers with points, coupons or discounts every time they reuse their shopping bags. 

And what about all the existing reusable bags sitting in our closets? Fill it Forward created a tag that connects our bags to a mobile app where users track their environmental impact, help give back to charitable projects, and offer rewards that encourage reuse—significantly extending a bag’s lifetime.


Meeting customer needs

Amidst a changing retail environment, these innovations recognize that habits are difficult to break, and to address this challenge, they have innovated around our lifestyles. Their Reuse models offer durable alternatives to the current retail bag, improving on the user experience not only from a performance standpoint, but from an environmental perspective too.  

GOATOTE offers a kiosk system that provides us easy access to clean reusable bags, solving for those moments you do not have a reusable bag, but don’t want the trade-off of a single-use alternative offered at the store.

ChicoBag aims to have lightweight, compact, reusable bags readily available for a variety of customer interaction points––delivery, curb-side pick-up or in-store.

For those who shop online or use pick-up services, Returnity designs and manufactures reusable shipping bags and boxes for products already on the market, and provides the e-commerce and delivery packaging system that powers how these bags and boxes are used. 


Aligning with existing retail operations 

Some emerging innovators are focusing on material science innovations that result in bags that are indistinguishable from today’s plastic bag to a customer or retailer at checkout, but are sourced from renewable materials and follow different paths at end of use.  

To replace traditional thin film plastics, Sway offers a seaweed-derived material that is bio-based and has the potential to be carbon-negative at scale. Their replacement matches the strength and performance of traditional plastic bags.

PlasticFri, on the other hand, sources starch from agricultural waste, creating a bio-based, compostable bag.

As an  upgrade to traditional paper bags, Domtar is developing a new bio-based, recyclable material of 100% cellulose fiber that  is stretchable and stronger, able to stand up to multiple uses. When considering which type of materials to introduce to a location, it is equally important to assess the availability of local curbside organics collection and anaerobic digestion and composting facilities, to ensure that these bags can be processed at end-of-life. 

Today, the outsized impact of plastic bag waste demands innovative solutions. However, as companies work toward zero-waste goals, the packaging of items that go inside the bag is also an important consideration. In recognition of this, we are giving special recognition to two Beyond the Bag Challenge submissions as Circular Trailblazers. These companies are advancing refillable and reusable packaging systems for products across retail, from food to cleaning supplies, broadening the horizon for the waste-free future of retail. Algramo, a start-up based in Chile and now piloting in New York, has created a mobile dispensing system for personal care and cleaning products that allows shoppers to skip packaging all together. Loop, developed by TerraCycle, creates reusable and recyclable packaging alternatives for some well-known household products, eliminating the need for single-use packaging when customers visit a store, or deliver these items to their homes.  

There is no one replacement for the current single-use bag––the solution lies in a combination of approaches that can fit into diverse retail markets.  And it’s critical to test these solutions. The nine winners of the Beyond the Bag Challenge––Chicobag, Domtar, EON, Fill it Forward, GOATOTE, PlasticFri, Returnity, SmartC and Sway––need further investment, refining and piloting to help set them up for success, with support from the retail partners who came together to create the Consortium to Reinvent the Retail Bag. We look forward to the exciting work ahead to assess how these solutions can align with customer needs, the growing demand for circular solutions, and the changing face  of retail. 

Meal Kits Are Growing But Need Smarter Packaging For a Sustainable Future

By James McGoff

February 02, 2021

TemperPack manufactures sustainable, high performance packaging for cold chain shipments. The company’s ClimaCell® thermal liners are used by leading meal kit brands and other companies that ship fresh and frozen food and temperature sensitive medical treatments to people’s homes. TemperPack manufactures millions of liners per month from its facilities in Richmond, VA and Las Vegas. James McGoff is TemperPack’s co-founder and Chief Product Officer.

Over the last decade, e-commerce changed the world. Over the last year, COVID-19 has changed e-commerce.

The biggest change? Ordering groceries online is now normal for many Americans. Food had been the last frontier for e-commerce, due to the challenges of maintaining refrigerated or frozen temperatures for a 1 to 2-day shipment. But a Mercatus study predicts 20% of all food shopping will happen online by 2025, to the tune of a $250bn annual spend.

How did we get here, and where are we going? At TemperPack, we make it our job to understand the science and business of perishable shipments.

As a first step, let’s go back in time.

MEAL KITS ARE BORN

HelloFresh and Blue Apron were founded in 2010 and 2011, each with a vision for changing the way we eat.

That new way involved shipping fresh produce and meat to people’s homes via the mail.  Though early pioneers in the mail order food game had shipped frozen food (Omaha Steaks and Jenny Craig), meal kit companies were the first to really take on the challenge of shipping fresh food (i.e., keeping lettuce crisp for a 2-day UPS shipment). Thanks to their logistical prowess, they made it work.

Meal kit companies attracted significant investment around the vision of reinventing a food system compatible with an e-commerce world. That vision got an additional boost when Amazon acquired Whole Foods in 2017, prompting traditional grocers to offer “click and collect” services and helping accelerate the adoption of perishable e-commerce.

Today, you can get meat, produce, ice cream, frozen dinners, fresh prepared meals, meal kits, diet-specific meals, restaurant take-out, and pantry items delivered to your home. If you want, you don’t ever have to step foot into a grocery store again or leave your house for that matter.

MEAL KITS: A SURPRISING BOOST FOR THE ENVIRONMENT

While people might worry about the environmental impact of packaging up and shipping meals to people’s houses via FedEx and UPS, meal kits offer significant environmental benefits compared to shopping at grocery stores: reducing food waste and reducing CO2 emissions.

According to Feeding America, 120 billion pounds of food is wasted each year, at farms, businesses (such as grocery stores and restaurants), and at homes. 21% of landfill space is occupied by food.

The biggest sources of food waste are consumers in their homes, accounting for 54 billion pounds of all wasted food. Meal kits reduce food waste at home by portioning meals and providing only what is needed for each recipe.

Businesses that sell food are another significant source of waste. 52 billion pounds of food from manufacturers, grocery stores, and restaurants end up in landfills. From a food waste perspective, meal kits and other direct-to-consumer food companies use a more efficient business model than retail. While a meal kit packing facility is designed for efficiency, a grocery store is designed to showcase abundance, whether that means mountains of alluring produce or soft drinks as far as the eye can see. Even with admirable efforts from companies like Kroger, this model is designed to generate more waste when it comes to perishable items.

With built-in features that reduce food waste both at home and in upstream distribution, meal kit companies can make a big impact. HelloFresh estimates that it reduced food waste by 66% compared to grocery stores in 2019. Other direct-to-consumer food companies like Misfits Market and Imperfect Foods can go even further by offering their customers “rescued” off-spec food that was likely headed for a landfill.

Food waste contributes to carbon emissions, and the reduced food waste of meal kits helps reduce their carbon footprint. A study by the University of Michigan estimates that meal kits reduce carbon emissions by 33% compared to grocery store meals.

While the negative aspects of meal kits (delivery trucks and packaging) are on stage for all to see, behind the scenes, meal kits operations have a net positive benefit compared to shopping at grocery stores.

PACKAGING: THE 2:1 DILEMMA FOR MEAL KITS

But what about that packaging?  Let’s take a closer look. We work with many meal kit and direct-to-consumer food companies and are familiar with their overall model and operations.

While specific companies and specific meal orders vary significantly, a typical meal kit order weighs about 20 pounds (averaging across 10 of the largest meal-kit companies in the United States). Of that weight, approximately 35% represents the actual food in the box, 45% makes up the coolant in the form of gel packs or ice, and the 20% is physical packaging:

That’s almost twice as much packaging material as food. And the numbers add up. Based on our own data and external sources, we estimated that 120 million meal kit shipments would be delivered in the US in 2020. This means over 1.5 billion pounds of packaging and coolant will be used to protect 840 million pounds of food.

A reasonable question to ask is: how is it possibly sustainable to use 1.5 billion pounds of packaging to protect 840 million pounds of food? Sustainability aside, are meal kit companies adding risk to their business by asking their own customers to manage 1.5 billion pounds of inbound packaging waste?

By our estimates, meal kit deliveries will increase 30-50% next year (and all the packaging that comes with it), so these are increasingly pressing questions.

MEAL KIT PACKAGING – A CLOSER LOOK

With the industry generating [nearly a billion] pounds of packaging waste, it’s important to understand what’s in there. Packaging and coolant represent approximately 2/3s of the overall weight of the shipment.

Here’s a breakdown:

Outer shipping box – Most companies use familiar corrugated boxes – aka the cardboard boxes Amazon uses. The EPA states that these corrugated boxes are recycled correctly 88% of the time, more often than any other material.  Most companies we work with use boxes from Sustainable Forestry Initiative certified sources.

Insulation – In short, insulation makes it difficult for ambient heat to enter the box.  So even when it’s hot outside, the contents inside stay cold. If meal kit companies were driven purely by performance and cost, they would all use Expanded Polystyrene Foam (EPS), better known as Styrofoam®. EPS is inexpensive and effective, but its environmental hazards are well known. To their credit, very few meal kit companies use EPS. Most of them have moved on to more environmentally friendly materials, including repurposed natural textile fibers (like denim and cotton), paper, or bio-foams. However, often these insulation liners contain plastic binders and still need to go to a landfill, but some, including our ClimaCell® liners, are curbside recyclable.

Ice Packs – Ah, ice packs. As noted above, the ice packs (often referred to as gel-packs or “coolant”) are the heaviest item in a container.  Most coolants include a mixture of water and ethylene glycol (which is what gives it a “jelly” feel) and are wrapped in low density polyethylene (LDPE), the same material used in plastic shopping bags.

In short, the coolant is what absorbs the heat that does make it past the insulation. In theory, if you had a perfect insulator, you wouldn’t need coolant. Conversely, if you were to use enough coolant, you wouldn’t need the insulation. Combining the two is the best way to minimize overall packaging while protecting the shipment.

Individual Wraps and Containers – To protect individual items from moisture, and keep the box organized, meal kits used pouches, wraps, or light containers to protect specific items. Often these use LDPE or PET.

Flyers, promotions, menu cards – There are many pieces of paper, but most of these are recyclable from home, though some are not due to the plastic lamination needed for that high gloss, premium look and feel.

MAKING MEAL KITS BETTER FOR THE PEOPLE, BUSINESS, and the PLANET

The most sustainable packaging is no packaging. Being that this is incompatible with the challenges of delivering perishables through the mail, what would smarter packaging look like? For starters, we would suggest a strategy that minimizes non-recyclable plastics like low density polyethylene (LDPE) film. LDPE film widely used in meal kit packaging, especially for individual wraps, insulation lining, and coolant bags. Removing this would not only have an environmental benefit, but a brand benefit as well, since 77% of consumers consider plastic to be the least sustainable packaging material.

LDPE is not recyclable at home, and a GreenPeace study suggests that, even when people take it to collection sites (often grocery stores), it usually ends up in a landfill. There are few paths to reduce LDPE.

  • Short-term: Add Rigidity. Switching out flexible LDPE for more rigid High-Density Polyethylene (HDPE) or Polyethylene terephthalate (PET) would replace an unrecyclable material for one that is recyclable from home. HDPE is used in milk jugs and detergent bottles while PET is commonly used for single use water bottles and produce containers. Both are highly recyclable when they are rigid. We can envision replacing individual ingredients wrapped in LDPE with fewer, rigid containers protecting groups of ingredients.
  • Long-term: Compostable Innovations. There are many companies working to develop paper-based, compostable and/or dissolvable (and even edible) films for food protection. The Ellen MacArthur Foundation’s “Upstream Innovation Guide” featured several, including Apeel, Monosol, and Mori. While still not as commercially available as their traditional film counterparts, these solutions would be far more environmentally friendly – a big improvement for meal kit solutions and fresh food everywhere.

 

Coolants are a big part of the equation as well. While the most commonly used gel packs today must be thrown away, innovation continues around drain-safe coolants (in which most of the gel pack material can be safely poured down the drain), dry ice solutions, and more. Again, coupling a rigid, highly recyclable plastic container with a drain-safe coolant (like water, which has a very high energy density) would be a step in the right direction.

Stepping Back

Meal kit companies have narrow margins and fluctuating subscription bases, so expecting these companies to spend more money on more sustainable solutions may be a stretch. But we can envision a future where materials and operations are optimized so that only the right amount of packaging, insulation, and coolant are used for each specific shipment, based on the weather, duration, and payload, saving companies money and reducing the amount of trash customers must manage.

The management teams running these companies have already proven that they can find solutions to complex supply chain issues. To solve their packaging challenge, we would recommend that these teams consider the five following strategies:

  1. Standardize acceptable food safety criteria (time and temp) across all grocery delivery modes and products.
  2. Design packaging scenarios with sufficient safety factors to account for contact-free, unattended delivery scenarios.
  3. Implement real-time weather data to inform geographical and seasonal packaging decisions, reducing refunds while mitigating risk of food-borne illness.
  4. Using 2 & 3, transition to dynamic pack-outs so that each box goes out with the minimum viable amount of packaging to safely get the job done – driving out cost.
  5. Where packaging is necessary, commit to packaging formats that utilize renewable materials that are first, and ideally, compatible with curbside paper and plastic recycling streams, or second, BPI-certified for compost.

 

Achieving this “right materials at the right time” approach would boost these companies’ bottom lines and further improve their carbon footprints. Getting there is within reach and would allow food delivery companies to trumpet a persuasive argument that their model is truly best for the environment. Sign us up.