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.  

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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. 

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.

We are overlooking the equally visible plastics that are just as challenging to recover and reuse: the plastics that make up half the volume of every car; the plastics that make up 20 percent of the 55 million tons of electronic waste sent to landfill annually; the polyester (plastic) that represents 60 percent of all apparel fibers; and 42 percent of all non-fiber plastics which go to packaging. While we’ve developed recovery systems for some plastic packaging, we’ve failed to see the challenge holistically, in ways that address diverse forms of plastics in our system. Meanwhile, they have been steadily mounting in landfills, with limited to no end-of-life solutions.

The reality is that we need to solve for and build systems to prevent, reduce, reuse or recycle all plastic waste, not just packaging. Across industries and sectors, we must deploy all tools available to build a circular system for plastics. These include: harnessing design innovation to eliminate unnecessary plastic and reduce extraction of fossil fuels; scaling reuse systems and rental and resale platforms; investing in mechanical recycling and designing products that align with that system; and investing in advanced recycling technologies that can safely transform hard-to-recycle plastic waste into valuable new products or into building blocks to make new plastic or packaging.

Focusing on a single strategy to the plastic waste challenge compounds risks.

While solutions such as reuse and rental systems are critical to extending the life of a product, they are not necessarily plastic-free systems. Companies such as Rent the Runway allow users to subscribe to a library of clothing, allowing thousands of garments to be shared by 8 million customers. Even so, after dozens or even hundreds of uses, a clothing item likely will need to be retired, but currently no widely available, commercial recycling solutions exist to capture that textile waste. Even the most innovative companies leveraging reuse models for cups, food delivery or personal care packaging include some plastics or other valuable materials in their packaging or services that after many uses will need recycling. These solutions are a small part of supply chains today, but we believe they have a strong opportunity for growth. And as they continue to grow, it is important to think ahead about solutions for the ends-of-life of materials in these systems, to keep them in circulation.

If we consider mechanical recycling, plastics that undergo this process can run through it only about seven times before becoming too degraded, and mechanical technologies cannot process most of the 16.9 million tons of textile waste Americans send to landfill every year.

The current strategies to address plastic waste are complementary, but taken alone they will be ineffective at producing a circular system for plastics. Without a multi-pronged approach, we will continue to see growing stockpiles of plastic waste in all forms, from various industries. We are at a critical moment of consensus. Across industries and sectors, stakeholders agree that we want and need reduction in plastic and better management of the plastics being produced. Enabling these outcomes will require policy shifts, incentives, investment, education and long-term partnerships. And we will need to experiment with and invest in emerging and nascent solutions that can safely solve for difficult material types.

Advanced recycling technologies can contribute one piece to the puzzle, solving for our hardest-to-recycle plastic-based products, such as healthcare-related plastics, multi-layer packaging, apparel and building materials.

Like the plastic waste problem, there is a tendency to oversimplify advanced recycling. It is not a monolith; rather, it is a sector marked by distinct and diverse technology processes that purify or break down plastic to create virgin-quality outputs through a number of biological, thermal and/or catalytic processes including dissolution, glycolysis, pyrolysis and gasification. Closed Loop Partners has categorized these processes into three buckets: purification; decomposition; and conversion. Some technologies, such as pyrolysis, have been around for decades. Others are new and developing; all are improving and not all will be winners. Like anything, it is a growing and competitive landscape and those that are the most cost-effective with the most positive environmental impact likely will advance quickly.

Two very different stories emerged this week around advanced recycling technologies. Purecycle, a purification company, just closed a $250 million bond for its Ohio facility, after successfully proving its technology at scale by processing discarded carpet into clear, high-quality polypropylene. Meanwhile, another advanced recycling technology company, LOOP Industries, was put under the spotlight by a research firm for failing to meet expectations. The stories around Purecycle and LOOP Industries show the importance of deep due diligence and the need for continuous testing and honing of solutions to de-risk them before scaling. We’re continuing to evaluate purification, decomposition and conversion technology processes, their environmental and human health impacts, supply chain economics and policy landscape. The technology processes themselves do not determine whether a company or a process is “circular.” The stakeholders invested in creating circular systems do.

While we’ve developed recovery systems for some plastic packaging, we’ve failed to see the challenge holistically, in ways that address diverse forms of plastics in our system.

Historically, market incentives and policies have not favored circular outcomes from advanced recycling processes. In the United States, manufacturers are not rewarded for using recycled plastic, nor are they penalized for using virgin sources. This has meant that manufacturers have favored the lowest priced commodity on the market, often virgin plastics, and the economics for advanced recycling have bent towards supplying industry with fuel produced from plastics. However, mandates that require recycled content, brand commitments to use post-consumer recycled content for their products and packaging, and landfill bans are becoming more prevalent across diverse markets, increasing the demand for high-quality recycled plastic.

The biggest economic and environmental opportunity in advanced recycling is to build circular supply chains for plastics, meaning plastic-to-plastic loops, which ensure that we keep materials at their highest value within our economy for as long as possible. We can align the advanced recycling market towards circular principles by creating market incentives and supportive policies that recognize these technology processes as recycling when their outputs are directly looped back into plastic supply chains.

Are there unknowns related to these new technologies or processes? Yes. It’s critical that we gain a better collective understanding of the environmental and human health impacts of these recycling processes. We must understand what conditions need to be true to steer the industry towards a circular economy, or risk perpetuating a linear system. Closed Loop Partners is leading a research project with this type of impact assessment as one central objective of our study, alongside an assessment of collections and feedstock processing, and investment guidelines to align this sector to circular principles.

It took the solar industry 40 years to reach 1 million solar systems in the United States, but three years after hitting the 1 million mark in 2016, the U.S. surpassed 2 million systems. In 2010, only 4 percent of new electric capacity was solar, but by 2016, it was 40 percent. Technology development and building an industry around a novel technology takes time, incentives and long-term partnerships to drive investment and scale. Advanced recycling will be no different, and because the sector is newly developing, all stakeholders — brands, retailers, investors, plastic producers and recyclers, NGOs and citizens — have the opportunity and a role to play to ensure a safe and circular system and future.

In 2020, we are continuing our research in the sector to understand the environmental and human health impacts of advanced recycling processes, the policy measures and investable opportunities along the supply chain that can enable a circular future for plastics and a safe and sustainable future. We invite you to learn more about our work on advanced recycling here.

Originally published on GreenBiz. 

The Beyond the Bag Initiative, launched by the Consortium to Reinvent the Retail Bag, aims to identify, pilot and implement viable design solutions and models that more sustainably serve the purpose of the current retail bag. Closed Loop Partners’ Center for the Circular Economy launched the initiative with Founding Partners CVS Health, Target and Walmart. Kroger joined as Grocery Sector Lead Partner, DICK’S Sporting Goods as Sports & Outdoors Sector Lead Partner, and Hy-Vee and Walgreens as Supporting Partners, alongside Conservation International and Ocean Conservancy as Environmental Advisory Partners. OpenIDEO is the Consortium’s Innovation Partner.

What does it take to reinvent the retail bag? And what solutions exist today? These are the questions we asked as we launched the Consortium to Reinvent the Retail Bag in July of this year, bringing some of the nation’s most influential retailers together to solve for the 100 billion single-use plastic bags used annually in the U.S. These bags too often end up polluting our oceans, stuck in our trees or being wasted in landfills, and it’s time that we create a better path forward. 

In August, the Consortium opened the Beyond the Bag Challenge, inviting entrepreneurs, designers, suppliers and problem-solvers to submit solutions that replace the current single-use plastic bag. Through the Challenge, the Consortium brings to light future-forward, tech-enabled solutions that can help build a new system that serves the function of the retail bag in a sustainable, affordable and inclusive way––helping transport goods from store to destination in a way that aligns with diverse retail systems and delivers ease and convenience for all. Three months and more than 450 submissions later, it’s clear that an impressive range of innovative solutions exist. Challenge submissions span the globe across 60 different countries, and represent a range of company stages, from early concept startups to established, commercial businesses. 

We’re seeing three broad categories of innovation emerge––reusable designs, innovative materials and enabling technology––that highlight key opportunity areas, showing the range of solutions and potentially groundbreaking ways we can change retail.

How might these solutions play out in the world? What might a sustainable retail bag system look like? After evaluating hundreds of potential solutions through the lenses of sustainability, business and technical viability, accessibility, customer behavior and alignment with reuse and recovery infrastructure, the Consortium announced today a shortlist of promising solutions for further exploration [SEE SHORTLIST HERE]. 

Across the Shortlist, we’re seeing three broad categories of innovation emerge––reusable designs, innovative materials and enabling technology––that highlight key opportunity areas, showing the range of solutions and potentially groundbreaking ways we can change retail. These provide a window into the future, a teaser as to what might be to come. Identifying innovation is the first step, and with the right kind of testing, honing and piloting, we can start implementing new solutions and systems at scale. 

As we collectively become smarter about what the market needs, what consumers want in a retail experience and what new technologies might enable futures we can’t yet fully envision, we will seek to better understand how these and other solutions might work together to create an interconnected and informed system that will fundamentally shift the way we are currently shopping and getting goods home.

Reusable Designs Keep Materials in Play for Multiple Uses 

Systems-Driven Reusable Packaging Integration by Returnity

There is a growing innovation category for retail packaging centered on reuse. These solutions use durable materials that can serve the purpose of today’s single-use bag, but remain in circulation for multiple uses within a user-friendly system. Many of these solutions also involve transferring ownership back to the producers and manufacturers––shifting away from typical purchasing models and toward renting, leasing and subscription models for packaging. These include bags-as-a-service and shared-bag systems that incentivize companies to see their products or packaging as valuable assets worth investing in. Through the Challenge, we’re seeing how this broad category comes to life in a multitude of formats, especially at the initial customer interaction point––the point of sale. Solutions range from gurney-style carts that fit in the trunk of a car, to compact reusable bag withdrawal and return stations that sit at the checkout counter and continually cleaned, reusable containers that transport products directly to customers’ homes.

The innovations coming to the fore in this category have the potential to address real challenges in the retail experience. Reuse models address short-lived disposable options, extending the use time of the retail bag from today’s 12-minute average to multiple life cycles, keeping valuable materials in play at their best and highest use. However, for their full impact to be realized, it is important to dig deeper into the structures and systems that enable their long-term environmental and economic sustainability, examining reverse logistics and conducting life cycle assessments, among other areas for evaluation.

Innovative Climate-Friendly Materials Can Reduce Impacts on the Planet

#INVISIBLEBAG by Distinctive Action Ltd

Designers today are recognizing that the materials they choose for a product determine how its entire life cycle will play out, from start to end. As a result, there is a growing focus on material science innovation, and a reevaluation of what goes into products for a carbon-free future. The Challenge has brought to light a whole host of new materials that broaden the way we think about the retail bag––aiming for superior performance that better meets the needs of a diverse range of customers, without creating an outsized impact on the environment. These solutions include stretchy fibers derived from nature, water-soluble films, biopolymers processed from agricultural waste, natural materials like algae, seaweed and chitin, and upcycled materials like cotton. 

Many of these pioneering solutions draw from rapidly replenishable resources and seek to add material value at end-of-life, whether through composting or recycling systems. They diversify the resources we use to begin with, relieving pressure from just one primary source––especially fossil fuels. At the same time, we need to ensure that these new solutions don’t outpace our existing recovery infrastructure, and are actually recaptured as intended after use. 

Enabling Technologies Accelerate the Uptake of Smart, Sustainable Solutions 

IoT-enabled Food Delivery & Pickup System by Minnow Technologies

Beyond these innovations are the underlying technological processes and systems that create a scaffolding for other solutions or systems, opening up new exchanges with customers and working towards a bagless future. These might harness Quick Response (QR) codes and/or radio frequency identification (RFID) systems that enable companies and consumers, in effect, to check products or packaging in and out along their lifespan. This increases visibility and digital connectivity, which can drive better logistics and inventory management, informing strategic decision-making and incentivizing customers through “nudges” or reward programs. Innovative and “smart” delivery models, like in store kiosks or mobile applications, can also integrate with other categories––reusable designs or innovative materials––to deliver products.

It is critical that these solutions are able to scale commercially, align with market needs and integrate within existing systems of leading retailers, laying the groundwork for long-term change that cuts across industries.

Now, how do all of these solutions come together? From a birds eye view, the range of solutions is wide, with many of them complementary and potentially overlapping. If we take into account all of the ways we use the retail bag, and all of the different people around the world using retail bags, this diversity of thinking works to our advantage. And we know there are yet more avenues to explore. As we collectively become smarter about what the market needs, what consumers want in a retail experience and what new technologies might enable futures we can’t yet fully envision, we will seek to better understand how these and other solutions might work together to create an interconnected and informed system that will fundamentally shift the way we are currently shopping and getting goods home.

Ultimately, it may not be a single solution, or even a few that solve the problem. With ever increasing ways to purchase goods come ever increasing needs for a myriad of interventions that solve for niche sets of needs within specific customer or delivery segments. In reality, there is no panacea to this complex problem––different geographic, economic and social contexts demand varied approaches that cater to diverse sets of needs. If we are to change the future of retail, these solutions, from reuse models to innovative materials to the enabling technologies, need to communicate with and interrelate within a holistic ecosystem, explore new pathways of collaboration to fill in gaps or amplify one another’s strengths, and work to advance the market together, rather than separately.  

This is just the beginning of the journey, both for solutions in the Challenge and for the Consortium collectively. In the lead up to the announcement of Challenge winners in early 2021, we’ll begin working more closely with the Shortlisted innovators, helping refine their solutions, digging deeper to understand their full economic, environmental and social impact, and exploring emerging trends. And as we begin to learn where and how these solutions might apply to today’s challenges as well as tomorrow’s, we will work to advance and implement those which can bridge this innovation gap and have an eye on adaptability and agility, or on those that might enable the successful implementation of another concept or emerging technology––all to ensure we are rolling out new ventures that not only work within the operational parameters of our Partners, but serve both customers and the market at large. Overall, it is critical that these solutions are able to scale commercially, align with market needs and integrate within existing systems of leading retailers, laying the groundwork for long-term change that cuts across industries [SEE SHORTLIST HERE].

As we enter the next phase of this initiative, we are excited to work across the Consortium’s ecosystem of emerging innovators and established retail institutions to drive toward a more inclusive, affordable and sustainable future. Join us on this journey, and stay tuned for our upcoming announcement of the final Beyond the Bag Challenge winners in early 2021.

PE coatings, along with any remaining liquid and food left behind from use, have historically left single-use paper cups out of the recovery and recycling process. Georgia-Pacific, though, has proven through its extensive re-pulping trials that the Green Bay and Muskogee mills can effectively recapture valuable cup fiber from paper cups while screening out PE-coatings and reuse the fiber to make toilet tissue, napkins and paper towels.

“As single-use paper cups have grown in popularity in recent years so, too, has paper cup waste. As a leading manufacturer of paper foodservice products, we continually look for ways to consume fewer resources as part of our longer-term strategy to identify solutions that benefit society. Accepting mixed paper bales containing PE-coated cups at our Green Bay and Muskogee mills is a significant step in this direction,” said John Mulcahy, vice president of sustainability for Georgia-Pacific, which manufactures the Dixie® brand of paper cups.

Kate Daly, managing director of the Center for the Circular Economy at Closed Loop Partners, believes Georgia-Pacific’s new repulping capability will greatly benefit the foodservice industry and further advance the industry’s environmental stewardship. “We are heartened to see Georgia-Pacific accelerate paper cup recycling through its acceptance of cups in mixed paper bales. This acceptance will also benefit new non-polyethylene next generation cups, marking an important step forward for the industry as a whole, and we hope even more mills will follow this lead. Georgia-Pacific’s actions reinforce the value of the materials in paper cups and build critical markets for recycled materials. As the managing partner of the NextGen Consortium, we continue to work with leaders like Georgia-Pacific to engage, educate, and collaborate with stakeholders across the cup value chain in order to keep valuable materials in play,” she said.

Beyond its current repulping efforts, Georgia-Pacific is also collaborating with the NextGen Consortium to trial at its mills next generation paper cups that have replaced the PE-coating with materials that can be recycled and/or composted. As founding partners of the NextGen Consortium and strong advocates of reducing single-use paper cup waste, McDonald’s and Starbucks are supportive of ongoing collaboration with Georgia-Pacific and encouraged by the company’s current re-repulping efforts.

“Increasing and improving the recyclability of cups is a vital part of our work within the NextGen Consortium. We are taking a meaningful step forward with Georgia-Pacific toward our goal of reducing paper cup waste. We’re excited by this progress and look forward to our continued partnership with organizations that support our vision of a resource-positive future,” said Michael Kobori, chief sustainability officer at Starbucks.

Marion Gross, chief supply chain officer, North America with McDonald’s added, “Recovering, recycling, and reusing the valuable materials in our cups is an important part of our sustainability ambition and our work with the NextGen Consortium. By accepting and reprocessing single-use cups, Georgia-Pacific is not only enhancing recycling pathways but also generating a supply pipeline of recycled content critical to positively impacting the environment and achieving our goals.”

With its Green Bay and Muskogee mills now engaged, Georgia-Pacific is working with FPI to expand and accelerate single-use PE-coated paper cup acceptance in curbside recycling programs in an effort to increase the number of households that can recycle the paper cups. As the voice of the foodservice packaging industry, FPI is committed to reducing the impact of its products on the environment and to advancing recycling and composting. “We are thrilled to work with Georgia-Pacific in its effort to recover and reuse PE-coated paper cups, and we are excited to partner with new communities that previously didn’t have the capability to recycle them,” said Natha Dempsey, president of FPI.

About Foodservice Packaging Institute
Founded in 1933, the Foodservice Packaging Institute is the trade association for the foodservice packaging industry in North America. FPI promotes the value and benefits of foodservice packaging and serves as the industry’s leading authority to educate and influence stakeholders. Members include raw material and machinery suppliers, manufacturers, distributors and purchasers of foodservice packaging. For more information or to follow us on social media, visit www.fpi.org.

About NextGen Consortium
The NextGen Consortium is a multi-year, global consortium that addresses single-use food packaging waste globally by advancing the design, commercialization, and recovery of food packaging alternatives. The NextGen Consortium is managed by Closed Loop Partners’ Center for the Circular Economy. Starbucks and McDonald’s are the founding partners of the Consortium, The Coca-Cola Company, Yum! Brands, Nestlé, and Wendy’s are supporting partners. The World Wildlife Fund (WWF) is the advisory partner and IDEO is the innovation partner. Learn more at www.nextgenconsortium.com.

About Georgia-Pacific
Based in Atlanta, Georgia-Pacific and its subsidiaries are among the world’s leading manufacturers and marketers of bath tissue, paper towels and napkins, tableware, paper-based packaging, cellulose, specialty fibers, nonwoven fabrics, building products and related chemicals. Our familiar consumer brands include Quilted Northern®, Angel Soft®, Brawny®, Dixie®, enMotion®, Sparkle®, Mardi Gras® and Vanity Fair®. Georgia-Pacific has long been a leading supplier of building products to lumber and building materials dealers and large do-it-yourself warehouse retailers. Its Georgia-Pacific Recycling subsidiary is among the world’s largest recyclers of paper, metal and plastics. The company operates more than 150 facilities and employs more than 30,000 people directly and creates approximately 89,000 jobs indirectly. For more information, visit: gp.com.

SOURCE Georgia-Pacific

Related Links
http://www.gp.com

It’s a universal experience. You make a purchase…perhaps it’s a candy bar or aspirin at your local pharmacy, or your weekly groceries, or a new shirt…and you have to make a decision. How do you carry your purchase home? Do you take a single-use plastic bag, knowing that it could persist in the environment for hundreds of years? Is a paper bag the better choice? Did you remember your reusable tote bag?

This may seem like a small moment, but with 100 billion single-use plastic retail bags thrown away in the U.S. each year, you’re right to consider the outsize impact your decision can have. At the Center for the Circular Economy, we work with brands, retailers, recyclers, NGOs and others to elevate questions like these beyond a confusing individual choice and instead imagine the systems change needed for a future where waste is not an option.

Today marks the launch of the Consortium to Reinvent the Retail Bag, our collective call to reimagine how we get goods home. Too many plastic bags end up decorating trees, polluting oceans, or wasted in landfills, and it’s time we imagine something better. Given the scale of this challenge, cross-industry collaboration is critical. Closed Loop Partners and its Center for the Circular Economy launched the Consortium alongside Founding Partners CVS Health, Target and Walmart, and joined by Kroger and Walgreens, and environmental organizations Conservation International and Ocean Conservancy to bring competitors together to solve a shared challenge. And to increase the impact and scale of our work together the Consortium is inviting more retailers to join the effort.

Too many plastic bags end up decorating trees, polluting oceans, or wasted in landfills, and it’s time we imagine something better.

Solving a complex global waste issue requires collaboration among diverse stakeholders to achieve a shared vision. Collectively, organizations can send a unified signal to the market and world at large, demonstrating their commitment to change and incentivizing the value chain, from manufacturers to recyclers, to adopt more sustainable practices that secure a waste-free future for the products and packaging we all use every day.

It’s not the first time Closed Loop Partners has convened unexpected and unprecedented partnerships to solve a shared challenge. In 2018 we launched the NextGen Consortium with the goal of redesigning the hot and cold fiber to-go cup with leading competitors Starbucks and McDonald’s. A year and a half later, following 480 innovative cup designs and the selection of 12 winners, four sustainable cup solutions were piloted in local cafes in the San Francisco Bay Area earlier this year. The findings from those pilots alongside extensive material and performance testing inform our next steps for the implementation of reusable, recyclable, and compostable cup solutions, and the infrastructure investments needed to support them. Our next journey brings together the world’s largest retailers who have a shared vision of reinventing the retail bag, with customer convenience, accessibility, inclusiveness, innovative design, and positive environmental outcomes all key priorities.

The Consortium to Reinvent the Retail Bag’s Beyond the Bag Initiative will take a holistic approach to implementing new systems that serve the function of today’s single-use plastic retail bag. Our goal is to identify, test and scale new solutions, while bolstering the recovery infrastructure necessary to retain the value of their materials. Reimagining the retail bag is only one step; the entire lifecycle of any new product must be considered. That’s why the Consortium will work to improve infrastructure for the reuse or recovery of alternative designs and require that new solutions bring material value to our recovery systems.

The old question at check-out of “paper or plastic” has been replaced by some additional options, but whether a bag is made out of paper or plastic or cotton all of these materials bring some tradeoffs. The traditional single-use plastic retail bag, with an average use time of 12 minutes, is derived from unsustainable fossil fuels. While these bags can technically be recycled, few actually make it to a recycling facility. And, if they do, they typically aren’t a high enough value product to make the economics of the recycling system work. Alternatively, paper bags, sometimes viewed as the more sustainable solution, are made from a more readily renewable resource but can drive deforestation and some studies have found they are more energy-intensive to manufacture. Other materials, whether bioplastics, fabric totes or something else all come with their own set of baggage and carbon footprint. The fact is: there is no convenient, sustainable, widespread solution available to all today.

Learn more about the complexities of the current bag landscape in our report, A New Way Home.

Read report

To identify new, innovative and inclusive solutions to the retail bag, the Consortium is launching, in partnership with OpenIDEO, the Beyond the Bag Challenge, inviting innovators, suppliers, designers and problem-solvers from around the world to share their ideas for sustainable solutions. Do you have an idea that can scale? Submit your idea here after applications open on August 3rd. Materials derived from novel sources, innovative reuse solutions, and solutions that eliminate the need for a bag altogether are all welcome.

We are excited to embark on this three-year partnership with leading retailers to find a new way to get goods home. Today is always the best day to begin to reimagine a better future; the Beyond the Bag Initiative is looking for innovative solutions that align the interests of people, the planet and business. We invite you to join us on our journey.

Local cafes, cities and students joined the NextGen Consortium’s collaborative efforts to advance reusable, recyclable and compostable cup solutions in pilots across the San Francisco Bay Area earlier this year.

Two years ago, the NextGen Consortium asked innovators: “How might we design the next generation fiber cup to be recoverable on a global scale, while maintaining the performance standards we know and trust?” From the start, we knew that our ability to successfully address the systemic challenge of cup waste would require strong collaboration across the entire cup ecosystem – from brands, suppliers and innovators, to municipalities, materials recovery facilities and mills, to advocacy groups and nonprofits, to the broader public. And we’ve been collaborating with these essential stakeholders, and others, ever since.

The NextGen Consortium serves as a collaborative platform for larger brands looking to move the needle on sustainability. By working together we’re one step closer to finding long term solutions, quicker than we would on our own — Jessica Marshall, Sustainability at McDonald’s

The Consortium’s journey began with the NextGen Cup Challenge —an open call for sustainable cup solutions that resulted in nearly 500 submissions from more than 50 countries. Twelve Cup Challenge winners were given the opportunity to enter the NextGen Circular Business Accelerator or the Advanced Solutions cohort; programs aimed at further developing the select winning cup companies – bringing them closer to pilot and market-readiness. And in early 2020 we launched The NextGen Pilot Readiness Program, a series of live, in-market pilots in the San Francisco Bay Area to further test and refine promising reusable and single-use solutions in surrounding local cafes.

We’re excited to keep learning, testing and exploring new cup technologies with the NextGen Consortium. The collaboration between companies, innovators and stakeholders is critical in our journey to find, and bring to scale, a more sustainable cup. — Chris McFarlane, Project Manager at Starbucks

NextGen Pilot Teams

●CupClub: A returnable cup ecosystem, providing a service for drinks. Think bike sharing, but for cups.
●Muuse : A deposit-based platform for smart, reusable beverage packaging, connecting their cups—and third party products—to Internet of Things technologies.
● Footprint: Fully formed fiber-based cups, lids and straws with an aqueous-based coating that is recyclable and compostable.
●PTT MCC Biochem: Recyclable cups with an innovative, bio-based BioPBS™ coating that makes the cup certified for compost in an industrial compost facility.

The Consortium’s pilots took place across multiple clusters of local cafes in San Francisco, Palo Alto, and Oakland. We evaluated cups and cup systems on their technical feasibility, business viability, user desirability, and systemic circularity. And, through it all, the collaborative spirit came to the fore as the critical ingredient for success.

Tackling a challenge as complex and massive as global cup waste requires a multitude of stakeholders—and it’s important to activate them from the start in order to advance the entire ecosystem. The pilots’ success hinged on collaborative municipalities (San Francisco, Palo Alto, Oakland), local neighborhood associations and universities eager to drive awareness, willing and excited local cafes to help establish a network effect of pick up and drop-off points, curious customers to experiment with new habits and an engaged media to drive awareness. After engaging all of these stakeholders and putting the cups to the test in local cafes, what did we learn?

Customer and Barista Insights Drive Rapid Iterations
Every minute counts when it comes to encouraging the uptake of reusable cup systems. And every user engagement offers a valuable opportunity for feedback. Customers have to sign up to a mobile app to log their cup, navigate the payment process, receive their beverage and ultimately return their cup to either a cafe or a drop-off point. Each step of this journey impacts their perception of reusable cups. For example, customer satisfaction was higher when there was a lost cup fee rather than an upfront deposit, and customers breathed easy after an alert confirmed a successful cup return. Similarly, baristas provided vital feedback. Even a simple verbal prompt asking customers whether they’d “like their order in a reusable cup” increased interest and engagement. These insights, alongside the experimentation mindset that characterized the pilots, enabled teams to rapidly prototype and improve according to key learnings.

Different Local Cafes Banded Together to form Clusters for the Pilots
Clusters are areas where 5 or more stores are located within a 5-minute walk. This walk, or the “pedestrian shed,” is considered the distance people are willing to walk before opting to use transit instead. Cup drop-off points work best when along a customer’s existing route. Local cafes including Coupa Cafe, Verve Coffee Roasters, Andytown, and Equator Coffees formed clusters, opened up their retail locations and helped lay the groundwork for the Pilot rollouts. During the pilots we saw some cups distributed at one cafe and returned to another. To hit a critical mass of users and truly scale reusable cup systems, support for this kind of behavior is imperative. It is also highly complex and requires honing and thoughtful planning as well as collaboration across multiple brands.

A cluster of local cafes and drop-off points

City Governments, Universities and NGOs Played a Critical Role in Galvanizing Momentum
Usership, especially early on, is directly tied to awareness. Data is most informative at higher volumes. The City of Palo Alto’s Zero Waste team was instrumental in identifying retail partners for the Pilot and educating their network, including zero waste leads in neighborhoods, about the pilots. The City of San Francisco’s Department of the Environment team was also engaged and eager to learn more about reusable cup solutions, especially in the face of proposed regulations and ordinances. The non-profit organization UPSTREAM made key introductions to city officials and shared essential information regarding upcoming ordinances and policies. The network effect is real. By engaging these organizations and their respective communities, our reach multiplied, attracting more pilot participants, thus gathering more data to optimize systems and prepare for the mass market.

The success of the pilots was built on the foundations of collaboration, which engaged diverse stakeholders and enabled agile and quick responses to feedback. COVID-19 brought unforeseen challenges and intensified the question, how can we maintain customer trust with reusable cups? Throughout the pilots, the reusable solutions adhered to rigorous washing protocols, including one team utilizing an off-site industrial facility to ensure the strictest hygiene standards were maintained. The pandemic has further emphasized the importance of sanitation and health, and the critical need to communicate these elements effectively to customers.

Moving forward, collaboration among diverse stakeholders is essential to ensure that innovative new systems of consumption can bring convenience and delight, while reducing the environmental footprint of our daily habits. The NextGen Consortium will continue to work with the Cup Challenge winners, as well as other promising cup innovations, to advance their solutions, while simultaneously strengthening and building the cup recovery ecosystem as a whole. This includes exploring new processes and working with waste collectors, materials recovery facilities, municipalities, and paper mills, among others, to explore the opportunities around cup recycling and composting. Our pilots in the San Francisco Bay Area provided invaluable feedback on how we can collectively enhance the drinking experience in a way that stakeholders (and the environment) can feel good about. And we’re excited to continue to accelerate the future of more sustainable cups.

CupClub’s Cup Chariot in action on Stanford University’s campus

This article first appeared here on the Retail Industry Leaders Association’s blog.

At Closed Loop Partners we believe it is disruptive circular solutions that provide resilience and create unique opportunities in the face of global pandemics, the ocean plastics crisis and accelerating climate risks. But we don’t need to start from square one. The transition to a circular economy that aligns the interests of shareholders, customers, local communities and the environment is already underway. Circular solutions maximize retailers’ opportunities for resource efficiency and profit, while aligning with consumer demand and long-term sustainability. So how do we get there?

HARNESS INNOVATION TO STOP WASTE BEFORE IT HAPPENS
The future of retail is arriving faster than anticipated. During the pandemic, trends like home delivery and automated check out accelerated, while the consequences of excess inventory became costly. The four key drivers of the circular economy – transparency, digitization, automation and localization – suddenly aligned with the urgent need to safely and efficiently deliver goods. The failings of our current opaque global supply chains reinforce that innovations in digitizing inventory and sharing data can create efficiencies and prevent waste, opening up new possibilities for smart stocking, real time tracking and optimized reverse logistics for returns.

THINK OUTSIDE THE BOX AND REEXAMINE TRADITIONAL BUSINESS MODELS
Circular business models are reimagining the relationship between producer and customer. Nowhere is this more apparent than in fashion, where rental models and recommerce are growing their market share rapidly. This is critical as fashion consumption continues to increase, while the average number of times a garment is worn in its lifetime decreases. Between 2000 and 2015, the EPA noted that textile waste by weight jumped 67%. But profitable alternatives to throwing these valuable resources away have already emerged. Apparel leasing in the U.S. is estimated to reach a market value of $4.4 billion by 2028, while the sale of second-hand clothing is expected to more than double to $51 billion by 2023 according to GlobalData and ThredUp. Companies like The Renewal Workshop operating apparel refurbishment services for brands’ damaged or used goods, enabling brands to sell previously unsellable inventory. Both approaches offer traditional retailers opportunities for additional revenue streams from existing stock, increasing customer touchpoints with individual companies while encouraging long-term brand loyalty and customer satisfaction. This breaks the cycle of waste and helps brands recover the full value of products they’ve already manufactured.

Clothing from The Renewal Workshop

ACCELERATE ADVANCED RECYCLING TECHNOLOGIES TO KEEP EXISTING VALUABLE MATERIALS IN PLAY
After a product’s resale market/value has been exhausted, there is still value to be found. Today’s ‘waste’ stream is rapidly evolving as new types of packaging and textiles enter the market. Most of these new formats and material blends are difficult to recycle after use, and few end markets exist for the materials to profitably remain in the value chain. But game-changing advanced recycling technologies are expanding. These technologies clean or break down mixed plastic packaging and synthetic fibers into their original building blocks so that they can then be reincorporated into manufacturing supply chains without diminished quality. Advanced recycling companies like Evrnu convert textile waste into new, high quality fiber for the creation of new clothing, in partnership with brands and retailers. It is this combination of disruptive technologies and collaboration across the entire value chain that can help eliminate the costs of incineration and landfill disposal, and instead create revenue from recycled materials.

It’s always the right time to reduce costs, increase efficiency, and protect the environment we share. Now is the moment to embed circular principles into core business models and harness these emerging innovations to ensure a more prosperous and sustainable future.

On June 17, 2020, Bridget Croke, Managing Director, at Closed Loop Partners spoke at the United States Senate Environment and Public Works Committee as they held a hearing on “Responding to the Challenges Facing Recycling in the United States.” The following text is drawn from her testimony. 

Today, we have over 40 investments in companies and municipal projects in the United States, all focused on helping Americans avoid landfill disposal fees while generating good jobs in the recycling and manufacturing sector.  Our investors are a combination of some of the largest American based consumer brands in the world including 3M, Coca-Cola, Colgate Palmolive, Johnson & Johnson, Keurig Dr. Pepper, PepsiCo, Procter & Gamble, Unilever and The Walmart Foundation, as well as the American Beverage Association, institutional investors, family offices and environmental foundations.  CLP proves that public–private partnerships are critical to unlocking the capital needed to build robust recycling and circular economy infrastructure needed to create jobs, reduce waste and build the supply chains of the future.

Despite some of the headlines we’ve all seen, recycling is big business in America and should create the manufacturing feedstock for future packaging. In 2019, the recycling industry in America generated over $110 billion in economic activity, $13 billion in federal, state, and local tax revenue and 530,000 jobs.  In spite of COVID and market challenges in recent years, 2020 is shaping up to be a year of major innovations in the recycling industry as it becomes central to circular economy business models that major consumer goods companies and cities are deploying. Transitioning US manufacturing to circular supply chains could unlock a $2 trillion opportunity.

Recycling continues to be the most cost-effective option for the vast majority of American cities. The economics are simple. Cities have two choices when it comes to disposal: recycle or landfill. While the value of recycling is generally reported as the amount that a city can be paid for its recyclables, the core economic value of recycling is actually the opportunity for a city to avoid costly landfill disposal fees.  Economic analysis conducted has shown that the U.S. scrap recycling industry is a major economic engine powerful enough to create 531,510 jobs and generate $12.9B in tax revenue for governments across the US.

New York City, the largest market in the United States, is an example of how advanced recycling infrastructure and strong local markets create long term profits. New York City has a long-term public-private partnership with Pratt Industries that converts all of its recycled paper locally into new paper products sold back into the NYC market. Via its contract with Pratt, New York City is paid for every ton of paper its residents recycle, as opposed to a cost of over $100 per ton to send paper, plastics and metals to a landfill.

Minneapolis is another good example. Eureka Recycling and the City of Minneapolis invested in local community outreach focused on keeping their recycling stream clean of contamination, defined as non-recyclable material. The result is one of the lowest contamination rates of any municipal recycling program in the country. With a clean stream of valuable recyclables, Eureka consistently shares with Minneapolis the profits earned from the sale of their recyclables. In many other cities, unfortunately, approximately 15% of the material that arrives at the municipal recycling facility is considered contamination. Municipal recycling programs that keep contaminants out of the recycling stream via strong community outreach or enforcement realize lower costs and better revenue opportunities. Municipalities that recognize that recycling is part of the commodities industry, not the waste industry, generate value.

Along with the examples of Pratt Industries in New York City and Eureka Recycling in Minneapolis, Recology in San Francisco and Balcones in Austin, among others, continue to provide their municipal and commercial customers robust recycling service. In addition, municipalities like Pensacola, Florida and Davenport, Iowa that manage their own best in class recycling facilities consistently reduce landfill disposal costs and create local economic value for their constituents.

The value of recyclable commodities continues to have a wide range. The cost to process municipal recyclables at a recycling facility is, on average, $70 per ton. That means that for a recyclable commodity to have value, it must have a market that pays the recycling facility over $70 per ton of that material. A sample of the commodities that are usually profitable to recycle include PET plastic (beverage containers), HPDE plastic (laundry detergent and soap containers), rigid polypropylene (bottle caps, some yogurt containers), cardboard and aluminum.

In 2020, three innovations are driving the increased profit potential of recycling in America and the development of a vibrant and growing Circular Economy.

1. The introduction of robotics and artificial intelligence. The future of the industry will be led by the recycling facilities that produce the highest quality commodity bales of materials. Companies like AMP Robotics have introduced robotics (robots) with artificial intelligence systems that enable the sorting and production of high-quality commodity bales, supply chain tracking and safeguards against contamination that were never before imagined in the industry.
2. Packaging innovation. We are seeing the emergence and growth of smart refillable packaging systems like Algramo that makes it cheaper and more convenient for consumers to use packaging more than one time.  We are also seeing a growth in packaging that is designed to be recycled for value.  Temperpack, for example, is a packaging technology that uses recycled cardboard to keep packaged food cold, replacing a significant amount of low value plastics like Styrofoam peanuts, which are both not recyclable and a common contaminant in the recycling system.
3. Advanced plastics recycling technologies, including purification technologies and chemical recycling technologies. Purification is an enzymatic process that improves the quality of recycled plastics so they can more easily be used again in packaging.  P&G invented a technology and helped launch a company, PureCycle Technologies, that will significantly increase the value of recycled plastic by removing color and smells. Chemical recycling is a process whereby plastic is depolymerized back to the base monomer, intermediary or carbon state in order to remanufacture a new plastic. Some plastics, like PET, HDPE and rigid polypropylene have significant value and are very profitable for the recycling industry, but they can degrade after a number of recycling cycles while some other plastics currently have limited value or are challenging to recycle. Chemical recycling has the potential to create an infinite circular economy value loop for all plastics. Some of the leading innovators are backed by major consumer goods companies. In 2020, we expect a number of emerging companies to move from pilot to commercialization phase.

These and other circular advancements are attracting significant private capital from leading investors. The industry saw investments from leading investors across asset classes. Google and Sequoia invested in AMP Robotics, Goldman Sachs is now the largest shareholder in Lakeshore Recycling Systems, Citi is largest investor in rPlanet Earth, a bottle-to-bottle plastics recycling facility in California and SJF Ventures invested in TemperPack.

The emerging leadership demonstrated by a number of retailers and consumer brands is driving the growth of the circular economy and improvements in recycling. Leadership means designing products and packaging that are free of any non-recyclable material and profitable for recycling. These packages are manufactured with recycled content, while reducing raw material inputs. Brands are telling their consumers that their commitment is to use recycled content in their packaging. Leaders are transparent in their progress, reporting in their annual reports the use of different recycled feedstocks. They know that any product or package that is not recyclable is destined for a landfill (or even worse, a river or ocean), and that cost is passed to the taxpayer.

Walmart has developed design for recycling guidelines for their suppliers to ensure the products sold in their stores are recyclable and piloting refillable packaging models.  Unilever’s Seventh Generation Brand uses mostly recycled HDPE plastic in its packaging and recycled paper in its paper products.   And over 10 global companies have invested over $150m in CLP’s investment funds so together we can help spur more innovation and create more tons of recycled feedstock coming through systems in the US.

We are also seeing a major trend amongst consumer goods companies looking to increase their use of recyclable material in the packaging and products they sell. It makes sense. At scale, along with the considerable environmental benefits, it should be less expensive for companies to manufacture using recycled material. That is why most major beverage companies including Coca-Cola, Keurig Dr. Pepper, PepsiCo, Nestle and Danone as well as the world’s largest consumer goods companies such as P&G, Unilever and Colgate Palmolive are publicly communicating aggressive goals for the use of recycled materials in their products and packaging.

For Americans, recycling is a matter of economic self-interest. Recycling our cardboard, paper, beverage bottles, rigid plastics containers, and aluminum cans has three important outcomes. First, it reduces the cost to manufacture the products we buy. Second, it reduces the amount of our taxpayer dollars used every year to pay landfills. Third, it generates revenue for our communities via the sale of recyclable commodities. A recent analysis reported the average cost to dispose of a ton of municipal waste in the US in 2019 was $55 per ton, and disposal fees in some states average more than $100 per ton.

Despite these economic incentives, large parts of the United States still have little or no recycling collection or processing infrastructure. Much of the economic activity generated by recycling is accomplished by long standing recycling programs on the West and East Coast as well as the upper Mid-West of America. For those who live in parts of the country with limited or no recycling infrastructure, their tax dollars are wasted on the cost of sending valuable commodities to landfill that could otherwise be sold. While the 90m tons currently recycled in the United States saves American taxpayers and businesses over $3 billion annually in landfill disposal fees, over 180 million tons of recyclable materials are landfilled, costing American taxpayers and businesses over $5 billion annually in landfills fees. We are literally throwing money in the garbage.

It is also important to recognize how China, which has received much press as of late for their role in the American recycling ecosystem, impacts the industry. For much of the past 20 years, the U.S. recycling industry was dependent on China as the leading export market. As consumption and waste has increased in China, the Chinese government has decided to develop their own domestic recycling infrastructure. This may cause some short-term pain in some parts of the United States’ recycling industry, but leading companies in the recycling industry, consumer goods and packaging industry, as well as a number of investors, see this as an opportunity to further develop and profit from domestic recycling and manufacturing infrastructure.

These are exciting times in the recycling industry as the development of the circular economy continues to expand. Major innovations are entering the industry ranging from robotics to supply chain mapping to advanced technologies that recycle plastics. Like any major industry analysis in the U.S., there is no one or two cities that should be extrapolated to define the industry. There are cities where recycling is profitable and a major economic engine and there are cities where the recycling program is struggling. What is clear is that the cities that focus on limiting contamination in their recycling program, build efficient and effective material recovery facilities and who contract with best in class recycling companies benefit from recycling programs that are both profitable and produce good local jobs.

Leading municipalities, recyclers, manufactures and brands are starting to partner together to establish, and profit from, a circular economy in the United States where goods are continually manufactured using recycled material from local recycling programs. This partnership in developing a circular economy will result in one of the largest investment opportunities in the United States over the next decade, major reduction in landfill disposal fee paid by municipalities, and become a primary driver of job creation in local economies.

We encourage policy makers to build incentives and develop policy to spur the market for recycled content and product and system innovation that reduces waste, creates jobs and makes recycled content competitive with the raw material market.