Case Study: Zero-waste Food Packaging: Innovations and Challenges
Zero-waste Food Packaging: Innovations and Challenges
Packaging from food products contributes as much as a quarter of all landfill waste in countries with low levels of recycling such as the US. As consumers learn about the damaging environmental impact of packaging waste, particularly the destruction of ocean ecosystems caused by plastics, they are looking for alternatives. In 2018, the “year of the plastic straw,” anti-straw sentiment led companies such as Starbucks to eliminate plastic straws. But in the face of this backlash, the packaging industry has been slow to respond. Without government regulations, there is little incentive to reduce the commercial use of plastic. Instead, the widespread awareness of plastic’s impact in the world has focused on consumer responsibility, including recycling efforts in local communities.
Unfortunately, very little plastic gets recycled today. China once was a major recycler, but in 2018 it stopped accepting waste shipments. As a result, less than 9% of plastic is recycled, and the bulk is buried in landfills or incinerated; both methods contribute to carbon emissions and often toxic emissions. To counter this problem, entrepreneurs are looking for innovative solutions to reduce packaging in retail environments through packaging-free grocery retail (PFGR). PFGR can occur as part of an existing store such as the bulk foods department; in stand-alone stores, sometimes known as “zero waste shops”; or through online retail stores. The bulk food department represents the part of the store where food is sold in self-serve dispensers and paid for by weight. Bulk food departments are common in natural food stores including Whole Foods, the largest US natural food retailer. Morrison’s and Waitrose, both UK grocery chains, added a trial bulk food dispensing in several of their stores. The products range from grains and cleaning materials to wine and beer, all at 15% cheaper (at Waitrose) than packaged alternatives.16
Figure 8.8 Zero-Waste Dispenser.
Depending on the store, the consumer brings their container or uses a sack provided by the store. The process involves weighing the container, dispensing the product into the container, re-weighing the filled container, labeling the product with the weight and paying accordingly. The typical bulk department requires dispensing units and sometimes scoops or spoons (for small items), pens, labeling materials and even sacks. The system requires customer training, equipment and protocols around using spoons (clean versus dirty). This can be a headache for a traditional retailer because of theft, confusion and maintenance, but the department can generate the highest margins in grocery retail. During the COVID-19 pandemic, bulk departments in some locations came under scrutiny as an opportunity for the virus to spread. From the consumer perspective, bulk buying is a way to reduce packaging and buy food at a lower cost. But there are also concerns about the cleanliness of bulk-food areas and the potential for contamination. In the quest for reduced packaging, start-ups are looking at bulk-food retail as a promising way to improve technology to streamline the process and increase the variety of foods. The next section highlights two start-up companies’ efforts to apply technologies to bulk packaging issues.
SmartBins-. SmartBins was started by David Conway based on his witnessing troubling amounts of plastic pollution during his time in the Coast Guard and sailing in the Bay Area of San Francisco. In a 2018 study of trash from 120 nations by the Ocean Conservancy, 23.3 million pounds of trash are on beaches and plastic packaging from food is the most common item. Conway set out to redesign the bulk bins to make them as convenient as buying the equivalent packaged product. His first improvement involved sensors that attach to existing food bins so that as food flowed through the bin exit, the volume is measured and a label is printed automatically. This avoids the customer fussing around with scales and pens. As a next step, SmartBins plans to introduce a fully automated shelving system for bulk foods.
MIWA: Petr Baca, an entrepreneur in the Czech Republic, started his company after working for years in large consumer packaged goods companies. He knew that bulk foods areas lack the ability to satisfactorily brand a company’s food, and they also cause product loss, poor brand spillover effects, efficiency losses and liability. MIWA’s main product line is easy to use and refill bulk bins. The company offers modular bin holders and containers that are easy to clean and refill with a single use 12-L pouch of food item, such as oats, beans or shampoo. The containers can be branded by the companies that want to sell in the bulk area.
Both MIWA and SmartBins see the potential to streamline the supply chain for bulk foods by automating the bin refilling and using microchips in various parts of the equipment for information transfer. Some larger food companies such as Nestle see the potential in using these high tech bulk dispenser systems. Nestle has been using MIWA’s system for its branded cat food and powdered Nescafe beverage mixes in retail stores. Buyers who want to bring their own reusable containers have welcomed these conveniences. Once brands see how they can use these bulk systems, others many get excited about the potential for interactive marketing and branding as well as data gathering from shoppers.17
Zero-waste food shops—where the entire store is dedicated to minimizing waste— have grown exponentially in recent years. In 2010, Germany had one zero-waste store and by 2017 had 28.ls The UK’s first zero-waste store opened in 2007; in 2019,100 new zero-waste shops opened in a single year. In Australia, The Source Bulk Food was founded in 2012, grew to 60 stores, and is now franchised in New Zealand, Singapore, the UK and Ireland. These stores go beyond bulk bins of dried commodities (rice, beans, flours, spices and herbs) and have expanded into household products such as washing-up liquid, laundry detergent, shampoos and other cleaning products. Other zero-waste stores include bulk wine and beer, oils and vinegars and fresh foods such as fruits, vegetables, bread, eggs, butter and cheese for the environmental conscious eater. Many zero-waste shops also focus on purchasing food with environmental and social attributes, such as grown organically, sourced as locally as possible, produced without workforce exploitation and with limited use of natural resources. As a result, most shops do not offer meat as it conflicts with this social and environmental ethos.19
Naturally, zero-waste shopping has moved online. Loop, a zero-waste shopping platform, partners with big companies such as Nestle and Proctor & Gamble to offer their branded products in reusable containers. The products are delivered in a reusable box and when consumers are finished with the items, the box is collected with the empty containers. The containers are cleaned and refilled. Loop plans to roll out the platform in international locations such as Paris and New York.20
As the coronavirus pandemic swept throughout the world, the fledgling reuse industry was blind-sided by consumer fears of contamination from different surfaces, such as plastic, cloth and metal. Coffee drink chains such as Starbucks stopped filling customers’ personal containers; reused plastic and cloth bags became suspect. The plastic industry quickly jumped on the bandwagon to disparage customers from bringing their own bags to stores and stalled plastic bag bans in several US states.21 But, as the founder of TerraCycle packaging pointed out, “No disposable package is today sterile.” As packaged food and beverages move through their supply chain from pallet to store shelf, they experience many touch points and environments. Zero-waste advocates stressed that at least people know where their own containers have been. However, consumer concerns remain high while liability conscious large retailers add another reason to dislike bulk areas. Whole Foods adopted a policy forbidding customers from refilling their own containers, citing the US Food and Drug Administration food code, which is a suggestion, not a regulation. This is but one example of how consumers’ priority for their own health can come into conflict with their environmental values—and points to the bigger policy and retail decisions that need to be made for the future.
Case Discussion Questions
- 1. Considering the potential conflict between consumer’s health and environmental impact of refillable containers, how can entrepreneurial innovation help address this conflict to create a win-win situation?
- 2. What is the role of government in balancing these trade-offs?
- 3. Why would some food and beverage companies not want to have their products offered in bulk bins?
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