It doesn’t matter how durable your returnable packaging is if the cost to return it is too high.
“At the end of day, it needs to get a ride back with the truck that delivered it, or you need to do an aggregate collection,” said Mike Newman, CEO of Returnity, a company that replaces single-use shipping and delivery packaging by designing, manufacturing and implementing reusable packaging and circular logistics systems.
He spoke to attendees at one of the Sept. 14 sustainable packaging education sessions at The Packer’s virtual Sustainable Produce Summit.
Key drivers of a successful returnable packaging program are threefold: return shipping and collection; cleaning and operational efficiency.
“You can actually save labor and have brand benefits. But if you can’t get it back cheap, you’re probably not going to be able to do this in scale,” he said. “To scale, reusable packaging-program cycle costs must be equal to, or lower, than the cost of the single-use package they replace.”
Supply chain leaders selected packaging as their top focus for increasing sustainability, according to a Supply Chain Dive Operations poll.
Packaging-use scrutiny is a catalyst for change, with pressure from the public and government, through environmental legislation, corporate packaging targets and consumer preference.
More than 75% of Gen Z and millennials cite sustainability when making purchase decisions — up 13% in the past two years, according to the poll.
Despite this consumer preference, avoid asking the end consumers to return packaging to you, he said.
“It’s really hard to get consumers to shift their behaviors,” Newman said. “Avoid the opt-in trap. That’s a trigger for virtue-signaling … and in practice, too many of them won’t follow through.”
A mix of “carrots and sticks” could be helpful, but different ones for every situation.
“Companies don’t like sticks, or charging their customers, and coupons or discounts don’t really work,” he said.
Newman suggested playing with the market to find a way to use this circular program in a way where the baseline is high participation.
When done wisely, reusable packaging can create less carbon dioxide and use less water, reduce cost in some settings and increase consumer loyalty, Newman said.
But there are big caveats.
Companies need to avoid the product design siren song. Systems should drive the design of reusable packaging, not the other way around.
“You really have to think top down, rather than bottom up,” Newman said.
Design for cleaning and end of life. Size, produce protection and branding specificity are key. And more reuse is not always best. You have to find a balance among cost, material and durability, he said.