Reusable packaging companies are shutting down at an alarming rate. Why is this happening, and what can be done to ensure the future viability of the sector? Mike Newman, CEO of Returnity, offers a firsthand perspective.
The news that reusable packaging provider Hipli has entered liquidation is another exit in what has been a tough stretch for innovators in the category; I know of at least half a dozen in the past year alone.
They say that a rising tide lifts all boats, with the success of any company helping to validate new technology. Nominally fewer competitors won’t help us at Returnity, instead putting into question the health of the remaining players.
As an entrepreneur, I know how devastating it can be to close shop. There is certainly no shame in the journey, and the ingenuity and resilience the founders demonstrated will serve them well.
Reuse business leaders and advocates should look at these closures and ask: What are the key lessons? Why have so many companies failed after collectively raising tens of millions of dollars, and why now?
Most startups don’t make it. You can be too early, undercapitalized, or simply unlucky; often it’s all three. That certainly is one driver.
But there’s another key takeaway: business models matter, and you can’t just market your way out of upside-down unit economics.
I continue to see reuse providers promoting their solutions as immediate economic and environmental wins. Yet their own internal data frequently suggests otherwise, even when picking and choosing the best-performing clients or applications.
This is taking a page from the Silicon Valley approach to building new businesses. You “fake it ‘til you make it”, fuelled by a venture capital money cannon, and get to scale as quickly as possible. Once there, you can worry about profitability and invest in efficiency.
That approach won’t work for reuse. VCs have largely abandoned the category; they have seen enough. Extended producer responsibility fees and government grants are either too limited or too far off from implementation to close the gap.
Reuse momentum in concert halls and stadiums will likely continue, but bridging to grocery staples and to-go containers is orders of magnitude more expensive. It requires fundamental changes in behavior that will take years, far out of reach for the early-stage companies that are leading the charge on reuse.
The solution is modesty and maturity. Reuse is not on the brink of transforming society, but there are success stories worth amplifying in settings like B2B shipping and corporate cafeterias.
If we double down on real paths to profitability, ones grounded in existing consumer behaviour and infrastructure, we will all benefit from having a network of healthy businesses driving real benefits to their owners, employees, and the communities where they operate.
If you liked this story, you might also enjoy:
The ultimate guide to packaging innovation in 2026
The ‘complex reality’ of reusable packaging in Europe
Everything you need to know about global packaging sustainability regulation
No comments yet