Reuse and refill: The model that will help consumers quit single-use plastics
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By moving away from disposable packaging, companies can address the global problem of plastic waste.
According to the United Nations Environment Programme, only about 9 percent of the 9.9 billion tons of plastic generated globally since the 1950s has been recycled. And almost halfPDF of the plastic waste poisoning marine life, contaminating food, and clogging waterways and sewers comes from consumer packaging. As citizens and governments wake up to this plastic pollution problem, they’re turning to business to solve it. In response, companies are trying to craft new approaches to plastic, whether reducing overpackaging or rolling out biodegradable materials made of seaweed and cornstarch. But one solution — the reuse and refill business model — stands out for its potential to shift consumer behaviors while unlocking new revenue streams and cost savings for companies.
It’s easy to see why cheap, sturdy, and lightweight plastic quickly became a convenient, even innovative, packaging option for consumers. The popularity of plastic skyrocketed in developed countries in the 1970s after the invention of the polyethylene shopping bag. Within two decades, plastic packaging had flooded the world; consider how, in developing countries, companies have marketed items as varied as shampoo and hot sauce in tiny single-use sachets. Products in cheap, throwaway packaging solved immediate consumer problems — for example, by offering unbeatable value pricing to millions of low-income consumers — but created a long-term health and environmental disaster.
Now, businesses such as Chilean startup Algramo, literally meaning “by the gram,” are tackling the crisis by offering the same value to consumers, but in reusable containers. Algramo makes products including rice, detergent, and other everyday staples available in small, affordable quantities via smart vending machines and reusable containers. Its bottles are equipped with RFID tags that allow consumers to earn discount credits with each use, incentivizing them to refill rather than throw away the containers. Flush with funding from Closed Loop Partners, Algramo is set to introduce this innovation in the U.S., too. It has good reason to do so: On a per capita basis, North America, Japan, and Europe generate the most plastic waste.
Algramo is in good company. As part of the New Plastics Economy initiative, launched two years ago by the Ellen MacArthur Foundation and the U.N. Environment Programme, more than 400 organizations have set concrete targets toward reducing plastic use by 2025. Many of those companies, both startups and established brands, are testing reuse and refill solutions. Their motivations aren’t strictly altruistic: The Ellen MacArthur Foundation estimates a US$10 billion business opportunity in converting even 20 percent of global plastic packaging to a reusable model.