The increasing threats (and, positively, public awareness) of the climate crisis coupled with a recession looming in the US present an interesting test for consumer packaged goods (CPG) companies looking to grow while they address sustainability concerns. Raising the bar on circularity now can create new value propositions against the uncertainty of changing markets.
What do people really want out of the things they need? The answer holds the key to building better products.
Taking care of the world: consumer staples
CPGs in the global personal care and household product market are what we call consumables. In contrast to durable goods in this category (such as home appliances, furniture, and electronics), consumables are quite literally items that get “used up,” like cosmetics, hair care, and home cleaning products.
Most consumables are considered consumer staples, or things people need year-round. No matter the season or state of the economy, most people need dish soap, body wash, and laundry detergent. By this metric, many investors call consumable consumer staples “recession-proof,” or holding steady and even growing in periods of economic decline.
Toothbrushes, razors, dish sponges, and hair combs, though not always used once and thrown away in the same manner single-use packaging is, are also considered consumables. Many are made to be disposable
Huge conglomerates, younger boutique brands, and private label manufacturers alike serve the needs of people around the world. But, it is increasingly at the cost of the environment in which the same people live.
Packaging keeps it convenient and cost-effective
Why do we (the consumer) own things we don’t want to own? We buy a bottle, jar, or container for the product inside, not the plastic, throwaway packaging that becomes our responsibility at the checkout counter. When you run out of product, will you cherish the packaging forever and ever? No: Most of us will dispose of it.
Most products are packaged in low-value, disposable packaging that consumers at the distribution, retail and end-user levels instantly own upon purchase. Companies are not incentivized to own this packaging as an asset and instead design it to make it easy and inexpensive for customers to buy and throw away, driving sales.
There are many upsides to this “business as usual” type practice, including ease of use for consumers (lightweight standup pouches, trigger heads for sprays, and snap top shampoo bottles are good examples) and flexibility of on-pack marketing (new designs for every product).
But while the downsides have become apparent, changing behavior to support a change will be nearly as difficult as changing the packaging itself.
Creating the shift away from this practice with more circular models for consumer staples will take much more than convincing consumers it is better for the environment. It must be just as, if not more, convenient and cost-effective than the conventional alternative, while also being superior in other areas.
Consumer delight for consumer staples
One of the many downsides to disposable packaging is the reduction of consumer delight: the positive, emotional response one has when interacting with a product. For the same reasons we aren’t served with disposable eating utensils and paper plates at fancy restaurants, we are delighted by products housed in glass or metal or beautiful dinnerware.
Durable versions of consumer goods previously housed in single-use packaging may sound exclusive at first, but the goal of our new initiative Loop is to keep containers useful for much longer, allow people to get what they really want out of the things they buy, and create an upgrade for products the world already uses.
Essentially, the way Loop works is consumers chooses their items, each with a base price for the product inside and an additional container deposit to be refunded when the item is returned empty. If a person were to purchase the same product again and again, they only pay for that product; companies in Loop own the packaging and are responsible for its recovery, like a modern milkman.
Offered in a combination of glass, stainless steel, aluminum and engineered plastics, items such as a first-of-its-kind Häagen-Dazs container and what might be the world’s most beautiful package of Clorox Disinfecting Wipes make up Loop’s growing catalog of containers.
Bending the linear economy into a circle is a process
The shortest distance between two points is a straight line, which is why the linear economy has so long served well to drive growth, create jobs and provide convenient and inexpensive ways for people to improve their lives. Thus, companies and consumers out to take their place on the right side of the climate crisis are faced with the challenge of making solutions work in the world as it is currently. It will not be easy, but it will be worth it.
The paradigm shift required of a circular shopping system such as Loop must come with enough guidance and incentives to make it stick. Living in Loop entails returning empty packages back in the Loop Tote for UPS pickup, and in the future, a nearby store, so the containers can be cleaned, sanitized, and prepared for reuse by the next customer...instead of simply using up the product and throwing it away.
Thus, our customer support team must be available to answer questions, our social media has to be responsive (adding even more value through engagement and shareability), and our marketing and instructional materials have to be as thorough and easy-to-understand as possible.
As one customer review put it, “the consumer is never without instructions as to what to do next,” which is a great response to a product that asks consumers to do something different than what they are used to.
The future of packaging is one that is recyclable and reusable. Packaging that is durable, not disposable, creates systems that save resources and deliver products we use every day. While there are a great many issues that touch the CPG space, including palm oil production, deforestation, fair trade, and ethical sourcing to name just a very few, packaging is where we can capture early and measurable gains.
Aim for solid wins in the production and consumption of packaging consumer staples. This will keep the world turning as the industry innovates to try and save it. Every brand, retailer, and manufacturer has an opportunity to design differently and be on the front lines for consumers looking to make a change.
About the Author
Tom Szaky is founder and CEO of TerraCycle, the Trenton, NJ. company that made a name for itself by turning hard-to-recycle waste (think juice boxes, coffee capsules, plastic gloves and cigarette filters) into new products. Along the way, the company, founded in 2001, has partnered with major consumer brands, retailers, manufacturers, municipalities and small businesses in more than 20 countries. Loop, Szaky's new idea to eliminate waste, changes the ownership model of packaging from consumer to producer.