Following the publication of Bain & Co’s report A Roadmap for Sustainable Packaging in Consumer Goods, we spoke to authors Daniela Carbinato, Luciana Batista and Yoni Shiran about its proposals and how these could be implemented across different countries. The report aims to give consumer goods companies a framework to understand the market and prioritise their actions in order to achieve circularity targets.
What was the initial drive behind creating the report?
Consumer goods companies are reimagining packaging to achieve circularity targets while reducing greenhouse gases (GHG) emissions. But they are facing big hurdles: lack of infrastructure, poor legislation, consumer awareness not yet translated into demand and uncertainty about areas to invest in product innovation.
Success requires thoughtful coordination and cooperation with multiple stakeholders across the system, including suppliers, retailers, industry groups, and governments. With these and other obstacles in front of them, companies are stymied by how to make progress in their sustainability journeys.
This report aims to provide companies with a robust framework that can allow them to understand the market context and navigate with intent: setting priorities and making choices that tend to be more successful for achieving circularity targets.
You’ve come up with a framework, LICT, which stands for legislation, infrastructure, consumers (and the retailers which sell a consumer products company’s goods) and technology. What are some of the potential issues that could occur for companies adopting LICT and how could these be overcome?
The LICT framework helps companies to seize market contexts better and to prioritise and make choices that tend to be more successful. Dealing with the LICT framework means deal with scenarios: pieces are moving, and companies must be up to date on market context to keep circular packaging strategy and priorities adherent and efficient.
How important is it to consider different scenarios depending on countries’ various legislation and infrastructure?
Understanding different scenarios in terms of legislation and infrastructure helps companies to prioritise efforts and make choices that tend to be more successful. There are 2 examples:
BeautyCo was heavily betting on compostable solutions, however legislation trends and infrastructure investments were not pointing to this direction which makes the solution less efficient to achieve the targets in both markets: Brazil and Europe.
Brazil recycling infrastructure is totally different from European: lower capillarity [less accessibility for collecting, sorting and recycling services to be provided to smaller cities and less developed/poorer neighbourhoods], more informality, poorer automatisation and the expected pace of changing is slower than BeautyCo would require for achieving full circularity. Therefore, BeautyCo must launch local initiatives towards close d loops to overcome the value chain gaps and deliver on the targets.
Which countries do you think will find it most difficult to progress towards circularity? What factors would come into this?
We like to think of packaging circularity as a business like many others (at least for open loops): it will flourish if there is a profitable equation that supports value chains.
On one hand, recycled material must be the cheapest and most efficient economic decision for companies, which will create demand while, on the other hand, collecting and recycling packaging must be profitable for waste management companies and actors.
Given that, the countries that will be most successful in this journey are those that manage to make circularity a profitable business equation for all value chain actors; this should create the conditions to drive required infrastructure investments and to trigger product innovations and design to increase recycled content.
Currently, from what we have seen, Europe is best positioned to progress on this agenda - mostly due to the Extended Producer Responsibility (EPR) schemes, widely adopted in the region. Under these, in essence, the polluter pays a fee that would cover the cost of waste recovery/recycling (the fee can vary by market and material and can also be affected by the relative prices of virgin versus recycled materials, reinforcing the demand for recycled content).
The brief says around 40% of consumers reportedly care about the planet, but only 14% of EU consumers claim Environmental, Social and Governance (ESG) issues are purchase criteria. What do you think could be done to shift consumers’ approach towards sustainable packaging?
We see four major elements preventing consumers from shifting their approach towards sustainable packaging.
a. Awareness & Education: consumers aren’t fully confident on their ability to drive behaviour change or positive impact.
- Complex and interdependent topics
- Unknown symbols
- Waste separation
- Greenwash versus truly sustainable brands
b. Convenience: adopting more sustainable practices tends to require greater efforts from customers.
- Separating waste for recycling
- Travelling long distances to deliver waste and/or find refilling stations
- It can be difficult to find products that are truly sustainable
- Researching brands, products and alternatives
c. Expectations gap: There is still a gap between consumers’ expectations on beauty products and sustainable options.
- Product/packaging performance
- The sensorial experience when opening a new pack
- The current standards of gift packaging
d. Willingness to pay: consumers declare that they are willing to pay more for sustainable products if the relevant premium is not too high or if the product comes with an additional benefit.
In the report, you mention a substitute economy, a circularity breakthrough and a green shift. What would these look like in practice?
Depending on how LICT elements evolve, different scenarios on driving circularity would emerge.
The circularity breakthrough tends to take recycling to its “full potential” versus finding other alternatives to achieve circularity; in this context plastics could be recycled (at least the most important ones) and companies will innovate more towards design for recycling (for example mono-material) versus finding new materials to pack their products.
On the other hand, a substitute economy should focus more on switching materials or product solutions towards more circular options (for example reuse & refill, concentration), given that the recycling value chain will not be able to absorb packaging production and material mix (for example some types of plastics). The green shift is the combination of these two scenarios: companies will be incentivised to take actions in both directions: substitute materials and design for recycling.