A fragmented, grassroots B2C reuse sector is at a crossroads, but what comes next, and what does it mean for reuse more broadly?
I still daydream a lot. When I was 20, a half-century ago, I had a wizened workplace boss who would tell me to “pay attention.” That remains great advice for anyone working around machinery and forklift traffic. It is my turn to pay it forward. For anyone in the reusable packaging space, now is a moment to “pay attention.” We are at an exciting time, perhaps a defining time, in the story of reuse and its ambition to become a pillar of a sustainable culture. The main stage is at the B2C (business to consumer) level, but it will impact reuse more generally.
At the B2C level, the rebirth of the reuse movement is still very early in the journey, and I suspect it looks little like it will look in the following decades. Consolidation will likely follow, especially if industry standardization and collaboration efforts stall, underscoring the crucial element of standardization and network effects in reusable packaging system optimization.
B2C reusable packaging initiatives like refillables and reusables in the takeout and cafeteria space continue to emerge. And like in early times for other industries, we see a great many local players emerging. Unfortunately, there isn’t the level of standardization required to achieve economies of scale or the necessary network effects.
Why do network effects matter for reusable packaging systems?
Network effects refer to the phenomenon where the value of a product or service increases as more users engage with it. This concept is pivotal in various sectors, particularly in digital platforms where the increase in user base significantly enhances utility for all participants. For example, a social media network like LinkedIn becomes more engaging and valuable as more of your industry colleagues join and interact mindfully on it.
Applying this concept to pooling reusable or refillable containers in the restaurant industry and B2C applications could revolutionize sustainable practices on a broad scale. If multiple restaurants within a city—or even across cities—adopt a standardized system of reusable containers, the utility and value of participating in this system would increase with each new restaurant that joins.
This would streamline operations by reducing the variety of containers used and enhance customer convenience by allowing them to return containers at numerous locations. As the network of participating outlets grows, so does the ease and feasibility of reusable containers, driving more significant adoption and, consequently, greater environmental benefits. This network effect could substantially reduce single-use packaging waste, aligning with broader sustainability goals and consumer preferences for eco-friendly practices.
Seattle’s B2C reusable packaging journey
Cities like Seattle and businesses worldwide are increasingly exploring reusable packaging systems to combat the pervasive issue of disposable plastic waste. Despite the ecological benefits, these initiatives face significant operational challenges that could determine their success or failure.
As reported in a comprehensive article in Grist by Joseph Winters, Seattle has been at the forefront of this environmental initiative. For example, Tailwind Cafe briefly offered drinks in returnable metal cups as part of a pilot program with Reusables.com. However, the cafe encountered several hurdles, including logistical complications and customer reluctance, ultimately leading to the program’s discontinuation. The city, nonetheless, continues to push forward, with venues like the Paramount Theater and the University of Washington adopting reusable solutions for drinks and food.
When marketing trumps sustainability, bad things happen
The broader issue is that many attempts at reusable packaging struggle due to the lack of a unified system. Currently, businesses often choose between multiple competing reusable initiatives or opt to create their own proprietary programs. This approach results in a variety of incompatible containers and inefficiencies in the systems used for collecting, washing, and redistributing these containers. The expense of maintaining numerous distinct systems can prevent businesses from achieving economies of scale, making reusable options less economically viable.
Brands want to stand out from the pack, but a plethora of brand solutions prevents the standardization needed to make reuse a broad-based success. Message to brands: embrace the customer experience about what is in the container and how it is presented instead of the container itself.
Ashima Sukhdev, in the Grist article, dreams of a future where consumers could pick up a coffee from a local cafe and drop off the cup at a convenient location like an office building, a library, or a bus stop. However, this level of coordination envisioned by the policy adviser for the city of Seattle is rarely seen. For instance, coffee shops using a unified type of reusable mug would require brands like Starbucks and Peets to collaborate closely, which is currently uncommon.
Standardization or industry concentration
The potential solution to these challenges lies in standardization. Organizations like PR3, the Global Alliance to Advance Reuse, are working towards creating global standards for reusable packaging, which could greatly simplify the reuse process. These standards would make it easier to scale up operations, streamline logistics, and familiarize consumers with the systems. If successful, PR3’s efforts could lead to the first reusable standards certified by the International Organization for Standardization (ISO).
Inefficiencies resulting from a lack of standardization at this early adoption stage will open the door for changes. Whether that change is the establishment of standards, greater consolidation, or both remains to be seen. This conversation has broader implications for pallet and B2B reusable packaging applications as well.
Rick LeBlanc, EMBA, is the founder and editor of Reusable Packaging News (subscribe to the free newsletter) and editor of Western Pallet Magazine. A supply chain journalist with more than 30 years of experience, he specializes in pallets, reusable packaging, material handling and related operations. Rick is co-author of Pallets: A North American Perspective and Pallets & Progress: A Collected History of Pallets and Palletized Handling 1922–1945. He is also an advisory board member of the Virginia Tech Center for Packaging and Unit Load Design. Read Rick’s full bio.
