How Do We Spark a Seachange for Reuse?

By Kate Daly

October 06, 2022

It will take unprecedented collaboration to address the scale of our global plastic waste challenge. Bringing together the nation’s largest retailers to test and pilot sustainable packaging solutions that operate across each other’s stores is a critical step toward this collective goal. 

If you visualize the current journey of most products and packaging in our economy, it looks like a straight line that starts with extracting finite raw materials and ends at the landfill. After decades of relying on this seemingly convenient linear system, its long-hidden economic costs and environmental consequences have become clear, bringing us to a tipping point that necessitates a better way forward — one that considers these materials as resources, not waste.

Consider the iconic single-use plastic bag. In the United States, it’s estimated that we use 100 billion plastic bags per year – and fewer than 10 percent of these are recycled. Most bags wind up in the landfill, in the environment, or in the wrong recycling stream, tangling recycling equipment and leading to costly shutdowns. Today, depending on where we live, our local stores may charge a fee to use a plastic or paper bag or may have banned single-use bags. More and more, customers are demanding convenient options that reduce environmental impact while helping us get our goods home. Reusable bags that we can borrow rather than own are one part of the solution, alongside bag reduction and building the habit of using the bags we already own. We’ve all had moments when we’ve forgotten our reusable bag or taken an unplanned shopping trip, which is where borrowing a reusable bag fits in.

Earlier this month, the Center for the Circular Economy released Beyond the Plastic Bag: Sparking a Seachange for Reuse – a report of our learnings from conducting first-of-a-kind reusable bag pilots at CVS Health, Target and Walmart stores in Northern California last summer.  The report is specific to the testing of reusable bag systems where customers who didn’t bring their own bag could “borrow” a bag and use it multiple times before returning it at the same or a different brand’s store to be washed, redistributed and reused by other customers.

The Beyond the Bag Pilots, launched by the Consortium to Reinvent the Retail Bag and conducted in partnership with global design firm IDEO, unearthed key insights across the customer journey and in behind the scenes operational logistics to determine what needs to be true for reuse models to be successful.

 What We Learned

  • For customers to pay attention to this new approach to carrying goods home, punchy, impact-oriented storytelling, with a clear description of the rewards and benefits of participating is essential
  • For customers to participate in reuse systems, signing up to borrow a bag must be just as convenient, inclusive and accessible as using a single-use bag
  • Accessible drop-off points and quick confirmation of the return of reusables are must-haves for customers to engage fully in a reuse system
  • Impact must be measured at every stage of the system, including percentage of reusable bags recovered, water and energy usage, and bag damage or loss rates. Return rates and repeat participation are critical measurements that require long-term testing and engagement to accurately gauge
  • As reuse grows, so do opportunities for increased efficiencies in shared infrastructure and other collaborations that increase the density and availability of drop-off points and help optimize and scale the system

We need to design and implement every aspect of the new systems thoughtfully to meet the needs of customers and retailers and ensure a measurable environmental benefit. Iterative testing and data-driven decision-making can help avoid unintended consequences, like insufficient recapture of “reusables” or the one-to-one replacement of single-use plastics with reusables.

The learnings from our reusable bag pilots extend far beyond this one application and help bring additional data to the conversation on reuse, but we still have a long way to go. Experimentation, iteration, and collaboration will continue to be key. Additional tests and measurements of reuse systems over longer periods will be necessary to gauge the shift from initial adoption of a reusable product to the active return and repeat engagement in a truly circular reuse system. Through collaborations like the Beyond the Bag partnership we hope to accelerate toward a future in which reusing valuable materials and products in our economy becomes the commonsense norm. Explore the full learnings from our pilots here.

Closed Loop Partners Releases Key Insights from First-of-a-Kind Multi-Retailer Reusable Bag Pilots, with CVS Health, Target & Walmart

By

September 13, 2022

New report from Closed Loop Partners shares insights to guide retailers on effective reusable bag models, a key solution as regulations to reduce reliance on single-use plastic bags grow across the U.S.

Read the full report

September 13, New York, NY – Closed Loop Partners’ Center for the Circular Economy and the Consortium to Reinvent the Retail Bag released a new resource to help guide retailers looking to adopt reusable bag service models. The report, Beyond the Plastic Bag, shares key insights and analysis gathered from collaborative reusable bag pilots conducted in select CVS Health, Target and Walmart stores throughout Northern California in 2021, as part of the Consortium to Reinvent the Retail Bag’s Beyond the Bag Pilots.

Approximately 100 billion single-use plastic bags are used each year in the U.S., most of which end up as waste in landfills and the environment. Reuse models play an important role in addressing single-use plastic packaging waste, alongside other complementary waste mitigation strategies. As retailers work to respond to the urgent challenge and address increasing plastic bag regulations across the U.S., the report provides key findings on what drives an optimal shopper experience and uptake of reuse models:

Customer-facing journey for reusable bag services

  • Effective storytelling is foundational for building awareness
  • Convenience is imperative when it comes to adoption and sign-up
  • Customers are looking for a clear and easy reason to help them reuse
  • Accessible drop-off points and quick confirmation of return help build trust in the reuse system

 

Behind the scenes action enabling reusable bag services

  • Partnering with the right stakeholders matters
  • Impact must be measured at every stage
  • Further scaling reuse systems will help catalyze efficiencies

 

“Successfully implementing reuse models on the ground, and accelerating their growth, takes unprecedented collaboration. Since 2018, the Center for the Circular Economy has been convening competitors to address complex material challenges and advance circular solutions, including reuse,” said Kate Daly, Managing Director of the Center for the Circular Economy at Closed Loop Partners. “This collaboration with the nation’s largest retailers to test and pilot reusable bag solutions across multiple stores is a critical step toward reducing single-use plastic bag waste. Iterative testing and data-driven decision-making of reuse systems can help avoid unintended consequences, like insufficient recapture of reusable packaging or the one-to-one replacement of single-use plastics with ‘reusables.’ We hope that this report on the Beyond the Bag initiative serves as inspiration for forward-thinking organizations looking to bring reuse to the next level. The learnings from our pilots can help guide us toward a future in which reusing valuable materials and products in our economy becomes the commonsense norm.”

The Center for the Circular Economy launched the Consortium to Reinvent the Retail Bag in 2020, convening many of the world’s largest retailers to identify, test and implement innovative new design solutions that serve the function of today’s single-use plastic retail bag. The Consortium’s Innovation Partner, IDEO, worked closely with Closed Loop Partners and its retail partners in designing and running the reusable bag pilots in Northern California featured in the Beyond the Plastic Bag report. Findings from the Beyond the Bag Pilots build on and complement additional learnings from Closed Loop Partners’ NextGen Consortium that ran several reusable cup pilots in 2020, driving forward the Center’s work to rigorously test and hone reuse solutions to ensure that they achieve their intended impacts.

“Through partnerships with innovative startups, collaboration with other partners, and buy-in from our customers, the Beyond the Bag Pilots provided critical data-driven analysis on the role that reuse models could play in plastic waste mitigation when thoughtfully designed and their impact successfully measured,” said Sheryl Burke, Senior Vice President of Corporate Social Responsibility for CVS Health. “We still have a lot to learn collectively, but we’re thrilled to continue our journey towards a more circular future for retail.”

“Bringing Target, Walmart, and CVS Health to the same table demonstrates the partnership needed across our industry to address the challenge of plastic waste and achieve measurable environmental benefits for all,” said Amanda Nusz, Senior Vice President of Corporate Responsibility for Target and President of the Target Foundation. “We’re grateful for the insights these pilots have provided, and we’re applying what we learned to identify bag options that are best for our guests, propelling more circular systems throughout retail.”

“The Beyond the Bag Pilots fostered an unprecedented platform for connectivity between trailblazing reuse start-ups, customers, Walmart, and other retailers in the industry,” said Kathleen McLaughlin, Executive Vice President and Chief Sustainability Officer for Walmart. “The pilots created the space for collective experimentation, and provided data-driven insights on the ease, convenience, and perceived benefits of the models tested. This kind of on-the-ground diligence from pilots is critical to inform what could be next for reuse and where it could fit in a circular economy.”

Over the next year, the Consortium to Reinvent the Retail Bag will continue to conduct extensive research and in-market testing of designs and innovative bag solutions that can reduce single-use plastic bag waste. These aim to inform the viability of solutions in different contexts, as well as the full potential of solutions to more sustainably, accessibly and effectively get goods home.

About the Center for the Circular Economy at Closed Loop Partners

Closed Loop Partners is a New York-based investment firm comprised of venture capital, growth equity, private equity and catalytic capital, as well as an innovation center. In 2018, Closed Loop Partners launched its innovation center, the Center for the Circular Economy, which unites competitors to tackle complex material challenges and to implement systemic change that advances the circular economy. Closed Loop Partners brings together designers, manufacturers, recovery systems operators, trade organizations, municipalities, policymakers and NGOs to create, invest in and support scalable innovations that target big systems problems. In 2022, the Center launched a Reuse Insights Lab to advance the firm’s testing, piloting and investing in reusable packaging models. The Reuse Insights Lab conducts qualitative and quantitative research and data analytics through in-market testing, focus groups and customer interviews, to identify how to design and build the architecture for a reuse system that brings the circular economy to the forefront in our everyday life. Learn more about the Center’s work here.

About the Consortium to Reinvent the Retail Bag

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. The Kroger Co. joined as Grocery Sector Lead Partner, DICK’S Sporting Goods joined as Sports & Outdoors Sector Lead Partner, Dollar General as Value Sector Lead Partner, The TJX Companies, Inc. as Apparel & Home Goods Sector Lead Partner, and Ulta Beauty as Beauty Sector Lead Partner. Ahold Delhaize USA Brands, Albertsons Companies, H-E-B, Hy-Vee, Meijer, Wakefern Food Corp., and Walgreens are Supporting Partners, and Conservation International and Ocean Conservancy serve as Environmental Advisory Partners. IDEO is the Consortium’s Innovation Partner. Learn more about the Consortium here.

Food & Agriculture Series

Why Investments in a Circular Food System Need to Happen Now

By Bea Miñana & Allison Shapiro

September 08, 2022

Supply chain disruptions and a heightened climate crisis call us to look across a wide range of solutions, including the food we eat and don’t eat.

In the U.S., 35% of the food we produce goes unsold or uneaten. Whether this is because of too much food produced, too little harvested, food spoilage, or not recognizing the economic value of food byproducts, most of this surplus food ends up in the 1,000+ landfills operated around the country. If we look at U.S. landfills today, food makes up almost a quarter of the materials in them. A lot can be done to improve the resource efficiency of our food system today––and within this work lies a critical path to positive environmental impact and significant economic opportunity.

According to the leading food waste non-profit organization ReFED, uneaten food is a major driver of greenhouse gas emissions today, generating 4% of U.S. and up to 10% of global emissions annually. These emissions come from many sources, ranging from unnecessary forestland conversion to excess energy use in food over-production to methane emissions during food waste decomposition.

To address climate change holistically, we need to look across the supply chains that move food through our economy today and transition them from take-make-waste supply chains to circular ones. Ultimately, a circular food system reduces food waste – and its associated greenhouse gas emissions – fundamentally linking it to climate goals. In fact, it is one of the top solutions to avoiding a global two degree warming scenario today, as reported by climate education non-profit Project Drawdown.

Investments in solutions that prevent food from going to waste, such as predictive software that allows retailers to match supply with demand more precisely, as well as composting infrastructure or anaerobic digestion technologies, are critical. According to ReFED, an annual investment of $14 billion – including $3 billion in catalytic capital that is patient and flexible – is necessary to cut food waste in half in the U.S.

But why invest in food waste reduction now?

1) Investable Innovations Already Exist

For more than five years, Closed Loop Partners has been publishing research, investing in and advancing circular solutions that cycle nutrients and eliminate food, organic and agricultural waste. These solutions span upstream food reduction solutions to midstream consumption solutions to downstream processing infrastructure – knowing that interventions at every stage of the supply chain are required to build a circular food system. As an upstream example, one of our portfolio companies, Mori, has developed a silk-based and edible coating that extends the shelf life of fresh food, reducing food spoilage and waste.  Rebound Technologies, one of our midstream portfolio companies, designs and manufactures freeze-point cooling systems, reducing food spoilage by boosting the efficiency of cold storage. Further downstream, our portfolio company HomeBiogas creates household and commercial-sized anaerobic digester units that convert food and yard waste into renewable energy and liquid fertilizer that can both be used onsite. Closed Loop Partners also invested in Atlas Organics, a growing composting company. In 2021, we successfully exited our investment in Atlas Organics, following its sale to Generate Capital, a key investor aligned with impact outcomes and growth of the company.

2) Demand for Investment Is Increasing

We are now at an inflection point, with several clear tailwinds that have convinced us that the investment case for deploying capital into the sector has never been more attractive. What are the tailwinds? We bucket them into three categories:

  • Environmental and market forces are directly driving revenue opportunities: Climate change has been headline news for years, but it’s never garnered the level of attention in the U.S. that it has today––and its link to food and agriculture has never been clearer. Climate change-induced droughts and severe weather are impacting agriculture cycles and food supplies, and organic waste in landfills is increasing greenhouse gas emissions. Additionally, amidst rising inflation, geopolitical instability and challenged supply chains, retailers are searching for more resilient ways to manage food supply chains: including sourcing more locally and reducing food waste to decrease costs while providing affordable products to consumers.

 

  • Industry leaders are driving action toward shared goals: Many Fortune 500 companies have set public net zero commitments, and more than 20 of them have set food waste reduction commitments with target reduction levels by target dates. As of early 2022, more than 40 large global corporations have signed up to the EPA’s 2030 Food Loss & Waste Champions program to reduce their food waste by 50% by 2030. Furthermore, there are several large cross-sectoral corporate, government and NGO partnerships for food waste reduction now in place, from 10x20x30 to the Pacific Coast Food Waste Collaborative to promote knowledge sharing, innovation and pool sources of demand for solutions. Kroger also launched their Zero Hunger | Zero Waste social and environmental impact plan to help create a more efficient, equitable and charitable food system. We are closely watching and excited by all three sets of development: consumer demand, corporate demand and public-private partnerships for knowledge sharing and innovation.

 

  • Policy is indirectly driving revenue opportunities: Many of us in impact investment have been watching regulatory and voluntary bodies work to standardize and create accountability for ESG disclosure for years. Those of us in the food waste space, particularly in the U.S., have also honed in on the uptick in legislation and updated mandates introduced at every level: federal, state and municipal, including the food waste bill passed this year and local organic waste bans. In 2021, the EPA updated its food waste data baselines to align with international goals outlined in Sustainable Development Goal 12.3, and it expanded the scope of the food scraps it considers waste that must be addressed. More than 10 states and D.C. have enacted food diversion mandates. In the nearly seven months that have passed since January 2022 alone, more than 70 bills were introduced in state legislatures to mitigate or repurpose food waste, calling for measures ranging from making it easier to donate excess food, to updating expiration date label approaches to funding compost collection.

 

  • Signals that traditional investors are starting to pay attention are rising: Investors poured more than $10 billion in venture capital into agricultural technology (known as ‘ag tech’) solutions in 2021. They even invested $2 billion into food waste solutions last year as well. But $2 billion trails the capital needed to cut food waste in half in the U.S., which ReFED found to be a $14 billion annual need.

 

3) Opportunities to Invest Are Growing

Having invested in food waste solutions since 2016 through Closed Loop Ventures Group and ongoing strategies within growth equity and private equity, Closed Loop Partners and ReFED have recognized the need to bring additional catalytic capital into the space. The two organizations have joined forces in a long-term partnership to begin to close the funding gap and to connect innovators with large players in the food system for transformational, sustainable systems change. Our new Circular Food Solutions Platform aims to provide the necessary capital, connectivity, market insight and support for innovation, to accelerate a variety of emerging food waste reduction solutions and bolster infrastructure for recovery. Ultimately, the Platform aims to scale a more circular food system that reduces organic waste and its associated greenhouse gas emissions, minimizes the economic burden on municipalities of unnecessary landfilling and waste incineration, and contributes to hunger relief – all with the larger goal of a more sustainable, circular economy.

Our new Platform is an investment and innovation platform that aims to drive traditional capital into the sector through two catalytic vehicles: a catalytic investment strategy and catalytic grant strategy. The Platform will be jointly managed by Closed Loop Partners & ReFED, intending to: (a) provide patient, catalytic capital; (b) de-risk solutions through innovation support and research; and (c) bring critical stakeholders to the table to collaborate in a cross-supply chain, cross-sectoral manner toward shared sustainability goals. The proposed hybrid structure seeks to activate solutions across three categories: Prevention, Rescue and Recycling. The Platform’s proposed design includes philanthropic and catalytic, flexible investment capital – debt, equity and grants – with the intention of meeting organizations where they are in their development cycle and a purpose of accelerating the efforts of not just private start-ups, but also public sector entities, project operators and non-profit organizations.

Collaboration is Key to Solving the Problem

This initiative is unprecedented. Knowing that collaboration is key to solving this complex challenge, it brings together an industry-leading data provider on U.S. food waste and impact methodology to assess solutions, and an experienced circular economy-focused investment and innovation firm, with unparalleled collective industry knowledge, network, and investment experience. By working together, we can collectively have a much bigger impact on the system, in activating supply chains for sustainability.

Closed Loop Partners is already seeing many circular solutions in the food and organics space, seeking capital ranging from grants to early-stage equity funding to later-stage project finance debt. Since 2016, we’ve invested in 10 food waste mitigation or recycling companies ranging from solutions to sequester carbon in agricultural products, to cold chain storage, to industrial organic composting and anaerobic digestion.

With targeted funding of $100M – of which $80M would be allocated to an investment strategy, and the remaining $20M to grants for non-investment-grade (or non-profit) solutions – the new Circular Food Solutions Platform aims to contribute to the diversion of up to 10 million tons of food waste from landfill, which would result in 15M mtCO2e avoided, and save nearly 800 billion gallons of water. All while supporting innovators of all types to benefit from our nearly 10 years of work investing and partnering with large global retailers, consumer goods, technology companies and local municipalities to build more sustainable supply chains.

If you are interested in learning more about this important topic, please contact us here.

How the Inflation Reduction Act Will Accelerate the Case for Investing in the Circular Economy in the United States

By Aly Bryan

August 18, 2022

Earlier this week, the United States Congress passed the Inflation Reduction Act (IRA), the most sweeping collection of climate change-related programs in decades. The bill is being heralded as helping to get the U.S. back on track with the country’s Paris Agreement commitments––among these, limiting temperature rise to 2 degrees Celsius, with an agreement to aim for a 1.5 degree Celsius limit.

With 70% of greenhouse gas emissions associated with the production and use of products, this bill will also have sweeping implications for the transition to the circular economy. As a leader in the earliest stages of circular economy investing, Closed Loop Ventures Group (CLVG) set out to identify the primary ways the IRA will accelerate the transition to a climate-positive future with circularity at its core:

  1. The IRA may provide an accelerant for new, circular markets domestically

To advance a much-needed renewable energy transition, the IRA directly encourages investments in solar and wind generating assets and energy efficiency upgrades in commercial and residential buildings. These new installations will not only require ample raw material – they will also accelerate the need for end-of-life solutions for energy infrastructure being replaced or systems being repowered. In solar, for example, annual capacity additions are expected to increase from 10 GW in 2020 to nearly 50 GW per year in 2025-6.[1]

As supply chain constraints continue, especially for products sourced from challenging geopolitical climates, recovering materials already in use will become increasingly desirable – and economically viable. This is a huge opportunity for companies focused on effective, at-scale reclamation and recycling – such as CLVG’s portfolio company, SOLARCYCLE. SOLARCYCLE is focused on recovering solar panel materials for resale, ultimately providing materials that can be sourced into new, domestic manufacturing.

Many of the tax credits introduced or expanded by the IRA have specific provisions related to domestic manufacturing – including for electric vehicle batteries. As domestic manufacturing scales to take advantage of these tailwinds, access to low-cost, locally sourced input materials, including those that are reclaimed from the value chain, will be paramount. This creates opportunities for companies focused on recovery of hard-to-recycle materials that can be incentivized with IRA rebates or credits – everything from battery materials to boilers and air conditioners, insulation, roofing and windows. Early-stage companies that are seeking scalable solutions for recovery and reuse across these markets may capitalize on opportunities from the legislation.

Not only does the IRA amplify the need for companies that can help reclaim products at end-of-life, but it also reinforces the opportunity for low-carbon, circular solutions for energy-intensive industries – such as steel, iron, concrete, glass and chemical production. Indeed, nearly $5B in capital is allocated to continue the push for low-carbon building materials, especially in public infrastructure projects. This is following on previous Executive Orders related to net-zero government procurement which aspire toward net-zero public procurement by 2050, including for carbon-intense materials like steel and concrete.[2]– To date, there are few – if any – commercial scale, low-carbon solutions for much of this procurement, meaning significant innovation will be needed in the coming years to make at-scale, carbon neutral production possible.

Beyond investment in renewables, the bill also has provisions that seek to enable investment into waste-to-energy and biogas operations, including expansions and modifications to existing tax credits. This creates opportunities for new, waste-generated, clean energy sources. Green hydrogen, which can be produced from waste biomass and other reclaimed sources, is well positioned with additional production tax credits. Through provisions for residential homeowners, home energy efficiency upgrades for electric heat pumps or window replacements can be much more accessible, even creating opportunities to bundle with circularity-enabling products like home anaerobic digesters, such as those developed by CLVG’s portfolio company, HomeBiogas. The biogas company creates modular household and commercial anaerobic digester units that convert food and organic waste into renewable energy and liquid fertilizer.

  1. The IRA may facilitate environmental remediation on an unprecedented scale

The bill is heavily focused on the identification and remediation of pollution to air, water and soil systems, as well as the fortification of soil and water for the future – including a specific focus on ports. CLVG’s portfolio company, Accelerated Filtration, supports this mandate by offering fine particle filtration across a range of industries and applications, helping reduce the flow of wastewater into the environment. Nonetheless, there continue to be pollutants – PFAS and 1,4 dioxane among them – that do not yet have commercialized solutions for remediation. More innovations are needed to mitigate the future risk of all types of pollutants leaching into the environment upon disposal.

Additionally, more than $20B is provided in the IRA to support the uptake of sustainable agricultural practices, including regenerative farming solutions and financing for innovations that can improve conditions for livestock raising. The question of how best to engage farmers on these topics continues to be top-of-mind – after all, the intent is to create a win-win situation, where farmers can both increase profits and enhance the quality of the land that they are growing on for today and the future. Ucrop.it, a CLVG portfolio company, has developed a novel solution to this problem with a free platform that fully tracks crops throughout the development cycle, leveraging blockchain to prove the application of climate-positive agriculture practices, which flows through to customers, enabling full transparency and traceability. Companies innovating upstream in the food and agriculture value chains – from soil health and vertical farming to livestock management, have a strong dual mandate that is reinforced by the innovation capital in the bill.

  1. The IRA may allow for other enablers of circularity – notably, financing

There continues to be more demand than supply of financing for circularity-enabling solutions to accelerate a climate-positive future. In particular, asset-heavy solutions that require commercialization of large-scale manufacturing or materials recovery facilities find it difficult to scale from pilot stage. This is yet another space in which the IRA is helping to close gaps and accelerate progress on circularity. By providing additional capital – in the form of grants, loans and concessionary capital – through national labs, the Department of Energy LPO, and even the formation of a Federal Green Bank, the IRA may enhance the dry powder available for early-stage climate tech and circularity-enabling solutions that accelerate our progress toward a climate-positive future. Closed Loop Partners continues to be energized about the crowding in of additional capital into the earliest stages of the space to facilitate the transition to a fully circular ecosystem––one that brings us closer to achieving our shared climate goals.

 

[1] https://repeatproject.org/docs/REPEAT_IRA_Prelminary_Report_2022-08-04.pdf

[2] https://www.sustainability.gov/federalsustainabilityplan/procurement.html

How Local Counties are Driving the Future of U.S. Recycling – and Why More Investment is Needed 

By Bea Miñana

August 17, 2022

Situated in the northwest corner of the Upper Peninsula of Michigan, next to Lake Superior, Marquette County has been busy building a recycling system that works. For years, the County faced low participation rates in their recycling collection program that fed a dual-stream recycling system: one where residents had to sort recyclables themselves. Confusion among residents about what could be recycled, coupled with a facility that lacked capacity, challenged the viability of the system.  

In 2021, Marquette County’s Solid Waste Management Authority (MCSWMA) decided to make a big change: upgrading its materials recovery facility (MRF) from a 1,500-ton-per-year dual-stream facility that could only serve Marquette County residents, to an 8,500-ton-per year – and growing – regional single-stream installation. The single-stream system meant that residents could put all materials in one recycling bin, since the facility could sort the recyclables instead. The larger capacity also meant that the program could serve not only Marquette County, but also other counties’ residential and commercial recycling. Partially funded through a $3 million interest-free loan from Closed Loop Partners’ Infrastructure Fund, the facility upgrade led to dramatic increases in recycling rates, improving the likelihood of materials being kept in the loop for longer, and locally. This kickstarted an improved recycling system for the County. But as Michigan’s recycling landscape rapidly changes, continued funding is needed if Marquette County’s recycling system is to evolve with it.   

What Michigan’s recycling looks like today  

Michigan is focused on developing its local economy through new manufacturing and industry – tied to its goal of building sustainable communities. Ensuring that there is robust access to recycling across the state, including processing capacity to manage the increased and changing materials flows, is a core part of this vision. Michigan Governor Gretchen Whitmer and the state Legislature are committed to raising Michigan’s recycling rate to 30% by 2025 and 45% by 2030, exceeding the national recycling rate of 32%. Achieving this goal requires investment across the recycling value chain – financing and supporting the scale of collection, ensuring that there is adequate capacity locally to process and sort these materials, and strengthening local end markets. Ensuring that materials are sorted and processed locally also lends itself to the state achieving greenhouse gas emissions goals, a key step to climate change mitigation.

Amidst the state’s constantly evolving materials landscape, even the most recently constructed or upgraded MRFs may be challenged to keep pace. High contamination rates continue to plague U.S. recycling systems. Materials that should not end up in the mix cause significant wear and tear on the equipment, in turn requiring regular investments from operators. Investments to fund capital equipment, technology and education are needed to ensure that a recycling system is operating optimally – keeping valuable resources in circulation and out of landfills and natural ecosystems. For Marquette County specifically, based on its facility’s design and the challenges and cost to hire manual sorters, investment in optical sorting technology is critical to moving forward. These could cost approximately $500,000 per unit, not including any potential retrofits needed. 

How Marquette County is making waves in the recycling system  

Operating with deep local roots, MCSWMA has actively sought ways to maximize the value of materials that are otherwise viewed as waste. In a state where landfill tip fees are relatively low, the County has been committed to identifying opportunities to reduce tons of material sent to landfill. This includes finding innovative ways to engage the public and raise awareness on contamination issues, especially those of biohazard waste that places their staff and team at risk.  

As a strong advocate for expanding residential recycling access, MCSWMA has also enabled discussions on recycling access at local and regional government levels. By delivering state and other recycling infrastructure grant opportunities to their municipalities and assisting in the grant process, MCSWMA was able to deploy over 10,000 recycling carts in Marquette County, improving access to their recycling program. They have also played a critical role in advancing recycling education, with their website becoming a regional resource for recycling participants. Building on these milestones, they are now working with the regional planning commission to determine ways to continuously improve recycling education, access and participation in the area. 

Collaboration between Marquette County and its neighboring counties has also been commendable. In fact, most of the tons processed at the County’s MRF is from out-of-county communities, and the team continues to strive to be a best-in-class hub for recycling in the region. The upgrade to a single-stream MRF was intended not only to serve the County’s 65,000 residents, but potentially the entire region’s population of approximately 200,000.  

In May of this year, Marquette County was given an Excellence in Recycling award from the Michigan Recycling Coalition for all their work. Additionally, they are a finalist for Resource Recycling’s Recycling Program of the Year, for counties with 150,000 or less residents. Today, they are continuing their work, strengthening infrastructure to push more materials to their MRF, and ensure valuable materials are pulled through the system. They are currently partnered with Michigan Tech University (MTU) on a proposed molecular recycling project, which could help process more challenging-to-recycle plastic materials on site in Marquette County, utilizing technology developed by MTU.  

“Previously, limited or no access to recycling and the lack of sufficient infrastructure resulted in recyclable materials being landfilled in Upper Michigan. We anticipate increased landfill diversion rates as more Upper Peninsula counties seek infrastructure funding to increase access to recycling services,” said Brad Austin, Director of Operations of the Marquette County Solid Waste Management Authority.  

Why invest in Marquette County 

Marquette County represents an important local solution to diverting valuable recyclable materials from Michigan landfills, and can serve as a blueprint for other similar programs across the U.S. The team that manages the County’s MRF, including Brad Austin, Director of Operations, is committed to building out a robust recycling system in the region.  

Today, the momentum of investments into Marquette County is strong. Closed Loop Partners’ Infrastructure Fund, following its initial loan to the County, continues to build upon their partnership, closing their second (follow-on) loan to the MCSWMA in May 2022. The Infrastructure Fund’s second loan to the MCSWMA supported the purchase of a new eddy current that will not only improve the county’s mixed plastics bales as commodity markets near historically high prices for such materials, but will also allow the County to separate out valuable non-ferrous metals such as aluminum that are also able to command high prices in today’s markets.  

Beyond the financing received from Closed Loop Partners, the MCSWMA has continued to identify grant funding sources to support smaller upgrades. However, the facility has grown much quicker than anticipated, and significant funding gaps still exist for the kinds of upgrades the facility now needs. This includes additional tipping floor and commodity storage space to enhance operational flexibility, and increase opportunities to recover and market additional commodities like aseptic cartons. Optical sorting technologies, and the construction associated with installing these, is also needed to maximize efficiency and complement their sorter staff. Ultimately, investments in these types of upgrades can bring the County closer to its goal of operating an efficient facility at capacity. 

To date, investment in the County’s recycling infrastructure has proven to be a critical driver to a more efficient and resilient local recycling system. If Marquette County is to stay at the forefront of recycling, and play a key role in Michigan’s recycling goals, more capital needs to be catalyzed into the County’s recycling infrastructure to drive continued impact.  

Interested in learning more about Marquette County? Contact Brad Austin at [email protected] 

PepsiCo Beverages North America Invests $35 Million to Help Close Gap In Recycling Access through investment in Closed Loop Local Recycling Fund

By

January 20, 2022

PepsiCo’s investment creates an innovative community-based recycling infrastructure model that aims to reduce waste, increase circularity, and increase availability of recycled plastic to support company’s sustainable packaging goals

Image: Example of small scale materials recovery facility: Revolution Recycling at Twin, Steamboat Springs, CO

PURCHASE, N.Y., January 20, 2022 – PepsiCo Beverages North America (PBNA) announced today a $35 million investment with Closed Loop Partners that will create the “Closed Loop Local Recycling Fund,” an innovative circular economy initiative to advance new small-scale, modular recycling systems in communities across the U.S.  The fund aims to increase recycling in areas with no or limited access to recycling, reducing waste and unlocking a new supply of recycled plastic (rPET), among other valuable materials, to support PepsiCo’s pep+ (PepsiCo Positive) sustainable packaging goals.

“As companies – including PepsiCo – set ambitious goals to use more recycled content in their packaging, there is more need than ever for partnerships and investments to increase recycling in the U.S. We need to develop the infrastructure that makes recycling available to more Americans so we can recover the high-quality material that can be used in our packaging,” said Jason Blake, Chief Sustainability Officer and SVP at PepsiCo Beverages North America. “Through pep+, our end-to-end strategic transformation, sustainability is at the heart of everything we do. As the exclusive investor in the Closed Loop Local Recycling Fund, we are actively driving the changes needed to transform the US recycling system and move towards a circular economy.”

Closed Loop Partners will use the investment to deploy small-scale modular Materials Recovery Facilities (MRFs) in underserved communities that currently lack access to larger municipal MRFs. This gap in access is typically due to a lack of funding or geographic proximity to facilities that process the materials. The smaller, local MRFs lay the groundwork for the future of recycling, introducing a new way to meet and adapt to the various needs of communities across the U.S. These modular recycling systems are smaller and less capital intensive than traditional large-scale recycling facilities, reducing the need for the costly transportation of recycled materials to larger MRFs outside of the area. The small-scale MRFs will help recapture valuable recyclables––paper, plastic, glass, and metals––reducing waste sent to landfill and unlocking a new supply of recycled materials. Each individual system creates the capacity to recycle at least 8,000 tons per year of materials, including keeping 400 tons of rPET in circulation every year. They are also expected to yield higher quality plastic while also reducing the costs and greenhouse gas emissions  associated with the longer distance transportation of the materials.

This investment reinforces PepsiCo’s desire to create a world where packaging never becomes waste and to increase recycling rates in the United States. It aims to support PepsiCo’s goal to cut virgin plastic from non-renewable sources across our food and beverage portfolios by 50% by 2030.

“This first-of-a-kind investment from PepsiCo ushers in a new future for local recycling, empowering communities across rural America and small cities to reduce waste and harness the value of their recycled commodities,” says Ron Gonen, Founder & CEO of Closed Loop Partners. “By closing the loop on these commodities, which can then re-enter local manufacturing supply chains, we are better equipping communities with the tools needed for resilience against a globally changing climate, while also creating new revenue opportunities and jobs. We look forward to continuing our long-standing partnership with PepsiCo to build and strengthen circular supply chains.”

This announcement comes on the heels of a $15 million PBNA investment in Closed Loop Partners’ Leadership Fund, a private equity fund that seeks to acquire and grow companies, including those in the packaging value chain, to strengthen recycling infrastructure and build circular supply chains that keep materials out of landfills. These investments are part of a long history of PepsiCo partnering with Closed Loop Partners to make strides on material recovery and infrastructure advancements:

  • In 2021, PepsiCo became a founding partner of Closed Loop Partners’ Composting Consortium, managed by their Center for the Circular Economy. The Consortium brings together leading voices in the composting ecosystem in the United States to identify the best path forward and pilot industry-wide solutions to increase the recovery of compostable food packaging and drive toward circular outcomes.
  • In 2014, PepsiCo became a founding member of the Closed Loop Infrastructure Fund, which has provided investments that cities, counties, and businesses in the U.S. use to take the steps necessary to move recycling to the next level, including new trucks for pick-up/hauling and cutting-edge technology to make materials recovery facilities work more efficiently.
  • Through American Beverage’s Every Bottle Back Initiative, PepsiCo is an investor in Closed Loop Partners’ Beverage Fund, which seeks to improve the collection of the industry’s valuable plastic bottles so they can be made into new bottles using rPET. This fund partners with other beverage companies, as well as nonprofits and NGOs like The Recycling Partnership and WWF to reduce their plastic footprints, improve recycling access, provide education to residents, and modernize recycling infrastructure in communities across the country.

 

As the Closed Loop Local Recycling Fund begins investing in community recycling, municipalities across the U.S., as well as local haulers, can reach out to Closed Loop Partners if they are interested in exploring a small-scale, modular MRF in their community.

 

About PepsiCo

PepsiCo products are enjoyed by consumers more than one billion times a day in more than 200 countries and territories around the world. PepsiCo generated more than $70 billion in net revenue in 2020, driven by a complementary food and beverage portfolio that includes Frito-Lay, Gatorade, Pepsi-Cola, Quaker, Tropicana, and SodaStream. PepsiCo’s product portfolio includes a wide range of enjoyable foods and beverages, including 23 brands that generate more than $1 billion each in estimated annual retail sales.

Guiding PepsiCo is our vision to Be the Global Leader in Convenient Foods and Beverages by Winning with Purpose. “Winning with Purpose” reflects our ambition to win sustainably in the marketplace and embed purpose into all aspects of our business strategy and brands. For more information, visit pepsico.com.

About the Closed Loop Local Recycling Fund at Closed Loop Partners

The Closed Loop Local Recycling Fund is a circular economy initiative managed by Closed Loop Partners and funded by PepsiCo, aiming to finance and deploy small-scale, modular Materials Recovery Facilities (MRFs) to increase recycling in communities with no or limited access to recycling, reduce waste and unlock a new supply of recycled plastic. Closed Loop Partners is a New York-based investment firm comprised of venture capital, growth equity, private equity, project-based finance and an innovation center focused on building the circular economy. The firm’s business verticals build upon one another, bridging gaps and fostering synergies to scale the circular economy.

To learn about the Closed Loop Local Recycling Fund, visit Closed Loop Partners’ website.

PepsiCo Cautionary Statement

This release contains statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are generally identified through the inclusion of words such as “aim,” “anticipate,” “believe,” “drive,” “estimate,” “expect,” “goal,” “intend,” “may,” “plan,” “project,” “strategy,” “target” and “will” or similar statements or variations of such terms and other similar expressions. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from those predicted in such statements, including future demand for PepsiCo’s products; damage to PepsiCo’s reputation or brand image; political or social conditions in the markets where PepsiCo’s products are made, manufactured, distributed or sold; climate change or measures to address climate change; changes in laws and regulations related to the use or disposal of plastics or other packaging of PepsiCo’s products; failure to comply with applicable laws and regulations; and potential liabilities and costs from litigation, claims, legal or regulatory proceedings, inquiries or investigations. For additional information on these and other factors that could cause PepsiCo’s actual results to materially differ from those set forth herein, please see PepsiCo’s filings with the Securities and Exchange Commission, including its most recent annual report on Form 10-K and subsequent reports on Forms 10-Q and 8-K. Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made. PepsiCo undertakes no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.

Starbucks and McDonald’s Deploy Additional $10 Million with NextGen Consortium to Accelerate the Circularity of Foodservice Packaging & Address Urgent Waste Challenge

By

October 20, 2021

The Consortium expands its work to advance reusable packaging systems, strengthen recycling and composting infrastructure and scale foodservice packaging innovation

NEW YORK, Oct. 20, 2021 — Today, Closed Loop Partners announced an additional $10 million commitment from the NextGen Consortium‘s Founding Partners, Starbucks and McDonald’s, to continue the Consortium’s work: identifying, accelerating and scaling commercially viable, circular foodservice packaging solutions. The Coca-Cola Company increased its commitment to now participate as a Sector Lead Partner, paving the way for sustainable packaging solutions for its broad customer base. JDE Peet’s, Wendy’s and Yum! Brands will continue their participation as Supporting Partners in the Consortium, and the Consortium continues to invite other brands to join the effort.

Since 2018, the NextGen Consortium has made significant headway in advancing sustainable packaging innovation and recycling infrastructure to help end foodservice packaging waste, with an initial focus on redesigning the single-use hot and cold fiber cup. The Consortium’s NextGen Cup Challenge sourced 480 solutions globally to redesign the cup, selecting 12 winning solutions across three areas: innovative cup & cup liners, new materials, and reusable cup service models. Following the Challenge, the Consortium has continued to advance the development of innovative cup and cup liner innovations, and the Consortium’s Circular Business Accelerator supported six early-stage teams to help test and refine their solutions.

In 2019 and 2020, Accelerator teams executed on-the-ground tests at a large tech company’s campus with four solutions, including two reusable systems, moving to the pilot phase across 14 local, independent cafes in the San Francisco Bay area. These solutions received valuable feedback from customers, restaurants and other key stakeholders. Drawing on insights from those pilots, the Consortium released a first-of-its-kind report, Bringing Reusable Packaging Systems to Life, sharing a blueprint and open-source resource to encourage collaboration and the growth of reuse models. The Consortium also continued its work across the broader foodservice packaging value chain, conducting dozens of lab- and commercial-scale tests with recyclers, material test labs and paper mills to evaluate the performance, recyclability and recoverability of the fiber cup solutions. As part of this work, the Consortium collaborates with paper mills, recycling facilities and municipalities to expand recycling access and recovery of fiber cups as well as NextGen cups.

“Through NextGen, we’ve made great progress in growing more sustainable packaging solutions, and there is a lot more work to be done. Faced with increasing climate risks, eco-conscious customers and a resource-constrained world, the foodservice industry must double down on its efforts and band together to strategically tackle the mounting waste challenge,” said Kate Daly, Managing Director of the Center for the Circular Economy at Closed Loop Partners. “Starbucks, McDonald’s and other partners in the Consortium make clear their commitment to collaboratively accelerate more circular foodservice packaging solutions, and we encourage stakeholders––from packaging manufacturers to recyclers to designers––to join us in advancing NextGen solutions.” 

With the additional $10 million in funding, the Consortium will expand its efforts, including and beyond the fiber cup, to strengthen the sustainable packaging ecosystem. The Consortium will deepen its customer research and testing of reusable packaging systems, explore the circularity of additional packaging materials such as polypropylene (PP), and accelerate the development of more widely recyclable and compostable fiber-based packaging solutions, as well as the infrastructure pathways needed for their recovery. The Consortium’s increased focus on PP is driven by the growing demand for recycled PP in foodservice packaging, and the need to optimize recycling infrastructure to capture the material. With its additional focus on polypropylene, in 2020, the Consortium joined The Recycling Partnership’s Polypropylene Recycling Coalition as a Steering Committee member, collaborating to allocate millions of dollars in grants to recycling facilities to improve polypropylene recycling.

“Starbucks’ work with the NextGen Consortium has been an important part of our ongoing efforts to reduce single use cup waste, part of our larger goal to reduce waste sent to landfills by 50% by 2030,” said Michael Kobori, Chief Sustainability Officer at Starbucks. “There has never been a more critical time for industry collaboration to shift away from single-use packaging, promote reusability, and champion recyclability. We are thrilled to continue our work with the NextGen Consortium to drive sustainable solutions for our planet.”

“Over the last three years, the NextGen Consortium has demonstrated that working together as an industry helps accelerate sustainable change, and is paving a clear pathway forward for the industry to scale packaging solutions that can benefit the planet and the communities we serve,” said Marion Gross, Senior Vice President and Chief Supply Chain Officer at McDonald’s North America. “Knowing that industry-wide collaboration is essential to creating lasting, scalable impact, we invite others to join us in this important work to advance solutions and eliminate packaging waste.”

Individual waste mitigation efforts by Founding Partners Starbucks and McDonald’s further bolster the Consortium’s work to accelerate sustainable packaging innovation, foster more robust recovery opportunities for packaging, and develop, enhance and optimize emerging reuse models. Starbucks continues to innovate to encourage the use of personal reusable cups in stores, most recently in partnership with Ocean Conservancy, and will continue to test and learn from programs geared toward reducing single-use cups around the world. McDonald’s has also made strides toward reuse, partnering with TerraCycle’s Loop platform to pilot reusable cups in the brand’s UK stores, and continues to make tremendous progress in ensuring its packaging comes from renewable, recycled or certified sources.

“Getting to a circular economy will require every community, organization and industry to be involved in making it a reality. The food & beverage industry touches all people, and so the need for more sustainable packaging for our customers is a top priority,” said Alpa Sutaria, General Manager, Sustainability, North America Operating Unit, The Coca-Cola Company. “We are proud not only to continue our work with the NextGen Consortium, but to increase our commitment, now as a Sector Lead Partner. We invite others to join us in this effort to strengthen and scale circular solutions for packaging.”

“With approximately 11 million metric tons of plastic waste ending up in our oceans every year, we need to bring circular packaging solutions to the table. We know that to tackle this massive, shared challenge, all stakeholders have to be involved,” said Erin Simon, Head of Plastic Waste + Business at the World Wildlife Fund (WWF). WWF is an environmental advisory partner for the Consortium. “The NextGen Consortium can play an important role in catalyzing the collaboration we need by enabling cross-sector partnerships and open-source insight sharing, and we are proud to be a partner in this important work.”

Moving forward, even greater collaboration among businesses, industry groups, nonprofits and others will be needed to solve systemic waste challenges. Through the expanded commitment of the NextGen Consortium, the multi-year collaboration will continue to work across the value chain––with global brands, municipalities, NGOs, recyclers and manufacturers––to advance viable market solutions that scale throughout the supply chain and bring value to recovery systems.

About the NextGen Consortium

The NextGen Consortium is a multi-year 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, with The Coca-Cola Company joining as a sector lead partner. JDE Peet’s, Wendy’s and Yum! Brands are supporting partners. The World Wildlife Fund (WWF) is the environmental advisory partner. Learn more at www.nextgenconsortium.com.

About the Center for the Circular Economy at Closed Loop Partners

Closed Loop Partners is a New York-based investment firm comprised of venture capital, growth equity, private equity, project-based finance and an innovation center. In 2018, Closed Loop Partners launched its innovation center, the Center for the Circular Economy, which unites competitors to tackle complex material challenges and to implement systemic change that advances the circular economy. Closed Loop Partners brings together designers, manufacturers, recovery systems operators, trade organizations, municipalities, policymakers and NGOs to create, invest in, and support scalable innovations that target big system problems. Learn more about the Center’s work here.

Upstream and Closed Loop Partners Announce Nominees of Inaugural National Reuse Awards

By

August 17, 2021

The Reusies: Virtual awards show for Reuse Movement in the U.S. celebrates heroes of a world without waste on September 30 ─

NEW YORKAug. 17, 2021 /PRNewswire/ — Upstream, a non-profit sparking innovative solutions to plastic pollution, today announced the nominees of the first-ever virtual National Reuse Awards (aka The Reusies), which will take place Thursday, September 30. Presented in partnership with circular economy-focused investment firm and innovation center, Closed Loop Partners, the awards show will be hosted by TV personality and science communicator Danni Washington and celebrate the heroes of reuse.

Tickets to attend the event and sponsorship honoring Most Innovative Reuse CompanyActivist of the YearFan Favorite Reuse Company, and Most Impactful Community Leadership are available as of today. The final winners will be announced during the show.

“The Reusies is a celebration of pioneers and innovators in the growing reuse economy,” said Matt Prindiville, CEO at Upstream. “The individuals and organizations we’re recognizing are launching innovative ideas to protect the planet. They’re charting a future to get what we want and need without all the waste.”

The nominees for Most Innovative Reuse Company are: AlgramoRheaply, and TURN.

The nominees for the remaining three categories are:

 

Award winners (except Fan Favorite Reuse Company) will be selected by a combined panel of judges and public voting. Judges include:

 

Added Kate Daly, managing director at Closed Loop Partners, on why they chose to be a presenting partner: “Reuse is vital in addressing the global waste challenge. We’re joining forces with Upstream to bring attention to the incredible ecosystem of innovators working toward a circular future. This builds on our existing work, as we research, test and invest in solutions that keep valuable materials in circulation longer.”

The event will be emceed by Danni Washington and streamed online on Thursday, September 30 at 4:00PM PT / 7:00PM ET and include performances by singer Kori Withers, video montages, award presentations, and a panel discussion on why reuse wins for the environment and economy through innovation and entrepreneurship. There will also be a live VIP session immediately after the show with speed networking in online breakout rooms.

Tickets are now available at www.TheReusies.org at an early-bird price of $10 for general admission (one screen) through August 31 (after that, general admission ticket cost will increase to $25). VIP Tables (which include 10 screens, access to the VIP after show and other perks) are available at $2,500. Category-exclusive sponsorship and brand integrations are also available. For more information, email [email protected] or visit the event website. For press inquiries contact Jen Maguire[email protected]; social: #TheReusies @Upstream_org @LoopFund.

SOURCE Upstream

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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.