Ep 149: Scaling refill and return with GoUnpackaged

Finley Phillips 00:04

If you walk into a typical supermarket in the UK, you'll see hundreds or even 1000s of products in single use packaging, from fruit and veg to pasture and bread. As a result, reusable packaging systems offer one of the most effective routes to tackling waste and pollution. Hello, and welcome to the circular economy Show. I'm your host Finn. And in today's episode, I spoke to Catherine Conway from gallon package. As part of their work with the refill coalition, go on packaged on a mission to revolutionise the way we transport items from supermarkets to our kitchens. I started by asking Catherine, what is the refill coalition?

Catherine Conway 00:47

The refill coalition is a coalition of retailers and supply chain experts in the UK. Go on package convened in 2020 as a way of getting everybody to work together to develop a standardised solution for both in store refill and online consumer returnables.

Finley Phillips 01:05

You've gained attention recently for your work with Audi and Accardo. We're gonna get a little bit more into those products as we go on. But can we start with Audi what sort of work you do with those guys?

Catherine Conway 01:15

So there's two parts of the project one is the Audi part, which is instal refill. So customers are able to currently go to to trial Aldi stores to test out a new version of instal refill that's fit for a supply chain. And then the Accardo version is a an online consumer returnables project where consumers will get prefilled mini Bulk Containers delivered to their home, which they'll then use and hand back to the driver.

Finley Phillips 01:41

And can you tell us a bit more about the returnables moto that Accardo is due to launch? certainly

Catherine Conway 01:46

can. So Accardo have been part of the reefer Coalition since the start because they really wanted to develop an industry standard rather than just a solution for themselves. The consumer returnable as we call it, mini bulk, so it's a 3.3 litre, same similar to the vessel that we've got similar materials, similar apertures so it can be filled and washed in the same way. And the consumer will receive it as part of their normal delivery, use the product and then return it to the driver. And it's just going to be really interesting to see whether that added level of convenience really helps with the returns. It's gonna be interesting to see the role of deposits or not putting deposits on return rates. So we're gonna be testing lots of different parts of consumer returnables.

Finley Phillips 02:33

So of EMS for reuse models, you're covering two there will work with Audi and Accardo. Thinking about the Audi product, why did you start with dry goods?

Catherine Conway 02:43

When you're talking about in store refill, you obviously need products that can flow because consumers are bringing a container down to some sort of dispenser and filling up. So I guess the easiest products to start with are kind of dry ambient. We're also working on a liquid solution, though, which will then really opened up a lot of other product categories. So in Aldi, we started with cereal products. So we've got six cereal products, but really, it's just as applicable to any free flowing dry goods. So that could be cereals, pulses, pastures, Rice's sweets, confectionery, all those kinds of products.

Finley Phillips 03:18

Yeah, then my next question was, you know, are there other product categories that this is suited for? But I guess you've sort of answered to that one. So let's talk about the design, then, what's crucial in the design to make that work.

Catherine Conway 03:31

So the way instal refill has always been done is there is some sort of Hopper with some sort of dispenser on it that a customer is pulling a handle down and filling up the amount of product that they want. Traditionally, that has been one unit. And effectively, these shops, staff have to take the dispensers apart, clean them by hand, fill them up using bulk sacks. And then sort of three huge problems with that is firstly, it's adding a huge amount of cost into the system. Secondly, like big supermarkets are just not set up to do that they've had to add these clean rooms and at the back at vast expense. And also it's not zero waste, because if something comes in at 25 kilos sack, okay, it's it's coming in bulk packaging, but it's still single use packaging. So our aim with this was to say, if we wanted something that could be available in every single retailer across the globe, how would it have to work and it's obvious that we have to take all of that manual labour out of store level, and do it up in the supply chain and exactly how it works at the minute with single use packaging where you pack in a factory. So we redesigned that Hopper effectively into a sort of modular system where there's we call it the vessel. So it's a 14.4 litre HDPE vessel that is effectively a big sort of bulk beer keg style. And that powers the whole system, it's filled by the manufacturer comes out through the supply chain like any other single use products, and then in store all they've got to do is Throw on the dispenser head, where the customer can dispense from. And then the key bit is, is when it's empty the store staff just put it out the back gets picked up with all of the returns, you know whether that's cardboard packaging things, going back to the distribution centres, and then can go into a washing and cleaning loop before being returned, empty back to the supplier for refilling. So it takes up all of that single use packaging up the supply chain. And then when customers come with their own containers to fill up, then they're taking out single use packaging there. So you can get an end to end single use free supply chain. So

Finley Phillips 05:34

as we know, supply chains are set up for single use currently. So just wondering, like what have been the challenges for sort of remodelling and rethinking that supply chain?

Catherine Conway 05:43

So many challenges, because as you say, the whole system is set up. So that single use functions. I think, from a design perspective, you we had to meet a lot of different parts of the supply chains needs. So we ran a collaborative process with all of our partners, we've got some really brilliant art equipment partners in the project. So that's Digi trade fixtures. Eden Berry. So we've got all of these companies who traditionally work in a sort of single use environment, bringing their capabilities to designing reuse. And across it, we had to work out right, what does the customer need and store? What does the member of staff need back of house? What does the supplier need when they come to fill it? You know, at the minute, we're only in a trial. So obviously everything's being filled manually. But we're trying to imagine something that you can update an automated filling line to work for. So I think a huge design challenge was trying to meet everybody's needs enough that the system functions without compromising on some real essentials. So things like wide apertures for both easy filling and easy cleaning, flat bottoms. So things can be placed down handles so that the store staff can lift them easily. So there's a lot of design considerations in that. And then we brought in sort of two other pieces of analysis to that design process, one of which was some commercial modelling. So we have an end to end supply chain, analytic tool, where we can model out all of the activities in a given system. So you can actually model out all of the activities in a single use system, and compare them against this, you know, fictional reuse system that you're developing. And they will actually show you where the cost savings can be. And that's been a really interesting process, because I think lots of us think that reuse is important, just from a sustainability perspective. Of course, we need to reduce virgin plastics, of course, we need to reduce our consumption. Actually, if you design things, well, you can save costs. And that becomes far more attractive to a retailer and something that you know, or a brand than something that they think is just going to cost them lots of money, of course, implementing any new system is going to cost money. But a lot of our results show that at scale, we will be able to deliver products in bulk at a cheaper price across the supply chain than single for single use alternative.

Finley Phillips 08:12

I think you've touched on it there about, you know, using the sort of expertise of the industry to make these things more durable, you know, more, you know, better quality. And I think like you said, knowledge transfer is a huge part of that. On that topic. We know that your business model was open source. Could you tell us a little bit about that and how that works?

Catherine Conway 08:33

Yeah, so this is the sort of hypothesis that we had when we set up the refill coalition. So the refill coalition is, you know, one element of what we do at garland package. But with this specific use case, you know, we are trying to get to, I guess our mission, we're a mission driven organisation, which is how do we really hit scale with reuse and refill? And I don't think imagine I, we were a startup and we had created this wonderful new system. I honestly don't think that even with being the best startup in the world, we can go and sell one system to every retailer, or every global FMCG brands across the globe to try and get everyone to use the same system. So instead, we thought, well, what are the bits that do need to be standardised. And that's what we're working on at the minute? And how might we make those standards available, so that anyone can use it? And so every partner that came into the solution, yes, of course, the equipment partners own their IP on their particular part of the system. But anyone who wants to enter this system from next year, once the trial is finished, we'll understand we'll be able to get the spec of how the system works. And if you've got a company that makes, I don't know some amazing valves that increases shelf life by six months where you can just work out how to make your valve fit in with a system that's been designed. And then it's your job to come in and sell it into part of the system. So I think some other people would call it a platform I don't know if I particularly love the term platform in a sense, but we're really trying to create an ecosystem where existing businesses who exist within the supply chain already, you know, globally, you know, we've got brilliant packers, packaging manufacturers, designers, converters, you know, everybody's got all of these capabilities already, what we're trying to do is say, Come and turn those capabilities to making reusable packaging a single use packaging, as

Finley Phillips 10:24

Catherine alluded to, the knowledge is already there. It is only through collaboration and collective effort that we will see the kind of progress that is required. After learning about the refill coalition and their mission, Katherine's passion for scaling, reuse and return is clear. So I wanted to go back to the start and unpack what it was that caught her attention initially.

Catherine Conway 10:46

In a long time. Yeah. So I guess there have been sort of three key phases to what has now gone on package. So the first was just mean, I set up the first kind of modern Zero Waste store, really, because I as a consumer was getting really frustrated with the amount of packaging that I was bringing home. And so I used to shop in a health food shop. And I used to always refill ecomo products, but I could never refill anything else. And I very clearly I remember one day going well, why isn't there a shop where everything's refillable? So I got some funding, I set up a market stall, I had to market stalls, I had an independent shop, I had a second shop. And I was probably young and naive and thought that I was going to somehow save the world with my chain of independent shops. And it was hard there was a global financial crash happens. So I set up in 2006, I think. So it was it was hard going being a small independent business on the high street in the same way that lots of zero waste shops are struggling now in a cost of living crisis. So from having thought that I didn't necessarily want to work with supermarkets, it became very obvious that I needed to go and work with the place where most of the packaging series packaging was coming from. And I think it's what 98% of people shop in supermarkets in the UK. So the next phase was I started working with Planet organic. So we had we and we still do have unpackaged concessions within Canada organic stores. So they are a chain of an independent chain of organic stores in London. And that really gave me an understanding of how you work in someone else's business. From then we moved on to I guess the original Waitrose projects, the Waitrose unpack project where I started working with colleagues who are now my fellow directors that go on package, where we really started to look at what this scale up might look like. So then we've worked with most of the major retailers in the UK on lots of the reuse trials. And then finally, I think as of last year, we thought, right, well, we're ready for a rebrand. So we kind of became go on package with sort of three key areas we develop solutions, of which the refill coalition is a really great example. We do straight consultancy for you know, any business that's wanting to transition from single use to reuse across any of the four kind of EMF reuse models. And then we do policy work as well. So the way we understand it is is business and government needs to work hand in hand that we need policy incentives to get business to move. And business needs to give the right single signals to government that it's open to policy and regulation. So I guess those are the sort of three areas and really just trying to work on really kind of high impact projects now. And in our mind that's about coalition's. It's about collaboration, it's about getting businesses in certain sectors to work together and pool resources and share risk to get a better result than if they tried to do it individually.

Finley Phillips 13:39

From a market stall in London. And now today, 10 years later, advising businesses all around the world. But as we know, action is required at all levels and high return rates are key. So how do we encourage people to return?

Catherine Conway 13:54

So I think at the minute, our problem isn't really a lack of consumer demand. It's a lack of availability. So you have to be a certain type of consumer, well, certainly in the UK, to be able to remember what it was like to have glass milk bottles delivered to your door, or corona pop bottles, I mean, that's about the two plastic or even pick and mix in a wall worse when you reach out, go to the cinema. Those are the three best examples of reuse and refill I can think of now obviously, in Germany and Mexico a year ago, you've got a whole beer bottle systems and everything like that. But we've lost the cultural memory of refilling because we have made single use so convenient. So even if you were a very dedicated sort of mainstream shopper in the UK, I think you'd have to live near one of about 12 stores of any of the major retailers to be able to even engage with reuse. So I think we need to be careful that we are not confusing a lack of consumer demand with a lack of availability. People can't ask for something that they don't understand. They don't know what it is. So there's an onus on business to actually really go out there and lead and put things out there. Then when it comes to the consumer experiences, we have to really think about it. So my colleague, Helen works a lot on all of our consumer behaviour change work. And we have to get the right balance, we have to make it attractive, we have to make it at the right price point, you know, it can't be more expensive to do more work as you're a consumer. And we, I believe we have to explain it to people, we have to tell them what we're doing. So in our refill station in Aldi, we have this little animation that actually shows the whole story of the vessel to explain it to people. So I think there's lots of lots of carrots we can do with making, reuse and refill attractive. I then also wonder at what point we need the stick as it were. And we actually take some of the single use off sale, because I think people will actually shift we've seen with a pandemic, people shift their behaviour very quickly when they need to. We've seen it with reusable cups at festivals and events, you know, people are absolutely fine to use a reusable customer, we use a reusable cup at a festival. But it would be really confusing if you gave them two options. So most places have actually just taken away the single use and everyone's got in a new habit. So there's lots of different elements that we need to focus on, and lots of different levers that we can pull. But I still believe that, you know, most people understand that there is a global crisis. In terms of waste resource plastic, most people feel terrible when their bins are overflowing with plastic at home, and actually would like us to provide solutions for them. It's just we've got to explain it to them in the right way.

Finley Phillips 16:41

And I think like you say it's sort of making it that attractive proposition for people, you know, and I think that comes back to the standardisation. I think it's allowing for that consistent customer experience across multiple products. And I think obviously, you know, companies like refill this is this is, you know, this is the start of something that can hopefully scale up and allow that talking more generally now, how do you sort of evaluate the economic sort of potential of reuse. So

Catherine Conway 17:10

we have, I mean, within the trial, we have various KPIs that we need to meet. So we are looking at, you know, the percentage switch, the percentage of sales going through refills, and there's commercial indicators like that. Also looking at efficiencies throughout the supply chain. So using this model that we've got, actually really seeing where the costs and savings can be throughout the supply chain to really understand that. And then we have non commercial KPIs as well. So operationally, you know, the kit, the kit can't fail, you know, and this is this is about finding the right balance between being too technologically led and to manual, you know, the more tech you put into a system, the more costly put into it, and the more chance it has to fail. And if a customer has just got used to coming and refilling something, and then they can't refill it for a week, because we're waiting for a technician to come from somewhere else to come and fix it, then that won't work. You

Finley Phillips 18:06

sort of touched on it earlier about, you know, you know, when we reimagined supply chains, and we have to rethink things. This brings me on to my next question about sort of jobs and that side of the economy, and sort of upskilling How do you evaluate the potential of reuse sort of create new jobs, you know, new skills for people is there a lot of potential there to

Catherine Conway 18:25

the possibility of, of job creation, I think is huge when it comes to reuse, I guess, as part of a wider kind of green transition. Because you've got really this this new network of washing, logistics reconditioning, that can be set up, if you did a 30% Reuse rate, which I guess is what a lot of the NGOs would like a 30% Reuse rate, five packet calculation, it's something like 365 million items a week that needs to be sold, used, returned, sent around a washing system and sent back to suppliers. Now, that's a huge piece of infrastructure change that we need. And on the one hand, that seems very, very complicated. On the other hand, I don't think it's that complicated. I think we know how to do all of the things. We know how to build warehouses, we have a very efficient logistics system. We know how to wash things safely. We do it in hospitals and restaurants all the time. So I think we know how to design packaging, we've got a brilliant packaging industry in the UK, and globally. So I think none of the individual parts of the system are difficult to do. I think it's how we turn the oil tankers and a single use system and get everyone pointing in the same direction. And I do believe that that's where government can play a role in terms of what is the supportive regulation and legislation that we need to give business the confidence to invest in what this new infrastructure world looks like. That

Finley Phillips 19:54

actually brings me on to my next point nicely about sort of that huge infrastructure change and as We know like within sort of reusable and refillable, there's been a lot of experiments and pilots, and without sort of shared infrastructure and standardisation that they are struggling to get off the ground. What do you evaluate? So how do you evaluate the barriers to reuse?

Catherine Conway 20:16

So I think everybody has known that there is a problem. Everybody knows that reuse and refill are part of the solution. So what we've got to do is shift from this position we're in now, which is where everyone's done individual trials. And I actually think we're in a, we're in a dangerous place, because I think everyone's losing faith, because they've done a trial. They haven't necessarily done enough trials with enough products in enough locations. So the consumers aren't really engaged with it enough. Because if it's only one trial in one store, then how do you extrapolate up how an entire can sort of consumer base of a retailer might might behave? The system change is really only going to come when a you've got this sort of supportive regulatory framework around it to enable it may include subsidies, we've subsidised plenty of other things so why we can't subsidise reuse and refill. And also some of the businesses are going to have to change their approach you know, I think it's it's fair to say that brands are extremely wedded to their individualised packaging, it is their very expression of their brand and their being. So, there will have to be a balance struck between what can be personalised bye bye brands and what needs to be standardised but if you think about it, we have so much standardisation already. You know every cam that baked beans comes in and standardise you know lots of first three sentences of bottles of sounds like standardised lots of litre bottles that you know, there are plenty of examples where brands thrive, using standardised packaging formats. And you know, it's about marketing. It's about labelling, it's about design all the all these different ways that you can do it. And actually, I think we need more leadership, from brands in this area to really work together and agree where they can compromise what can be standardised and there are already projects that are trying to do this. But I think we need those needs to go a little bit further and faster.

Finley Phillips 22:19

So we need action at every level, just you know, from the individual action all the way to you know, international policy. This sort of brings me on to my next question about reuse targets. How do you evaluate the role of reuse targets and sort of moving things forward?

Catherine Conway 22:34

I am 100% of reuse targets. The right targets for the right categories with the right transition phase. And the right you know, support, I think will be the enabler rather than the blocker. So I think there's probably plenty of lobbyists from plenty, plenty of the big businesses fighting against targets. We have seen it very, very strongly with the PP WR amendments and change that's been happening in Europe and you saw there was a huge fight back on behalf of various single use packaging manufacturers and clients in the food to go industry playing some fairly dirty tactics, I'm going to call that out using selective scientific data to support claims etc etc. And, and it was a bit of a David and Goliath you know, there's a huge amount of vested interest in a single use industry. And the reuse industry is tiny and disparate, and hasn't necessarily got a collective voice yet, although there are various brilliant organisations like New Era trying to change this.

Finley Phillips 23:42

Catherine explain more about the PP WR and what they do.

Catherine Conway 23:46

So the p p WR is the packaging and packaging waste directive. And it's the most recent sort of rounds of European negotiations that have been going on to really update that regulation. And there has been, I guess, quite a battle between NGOs and civil society who believe there should be more stringent regulation, to reduce waste, and to increase reuse. And then a fairly well funded business lobbies, certainly from the single use packaging industry and the food to go industry that have pushed back very heavily against targets. So it's yeah, it's as part of the sort of different levels of regulation that we're looking at. So the global treaty on plastics, the PP WR in Europe, which is really seen as a standard bearer for a lot of other regulation that other countries are adopting. And then certainly in the UK, we've got Defra who are looking at what they might be doing on reuse too. So I think targets are the enabler and many of the roundtables that I sit on with businesses, our clients, other businesses, not just in the UK, will privately sit in these roundtables and say God if only we had targets, we will be able to work on this. And yet, we don't yet. So I think the PP WR has done great work in certain targets in terms of beverages, transit, packaging, food to go. But I think it was a huge missed opportunity to tack on many of the sort of FMCG goods that, you know, an average consumer would take home in their basket. You know, we've got the global treaty on plastics, I know the work that EMF is doing through the business Coalition, which is just an absolutely brilliant way of getting businesses to work together to create this shared voice. So some days I feel quite hopeful, in the sense that there are a lot of interests that are aligning, and there's a lot of consensus being built on the the need for reuse and refill. Some days, I feel less hopeful because I just feel like everything is taking too long. And actually, we are running out of time to solve some of these problems.

Finley Phillips 26:05

As we've heard, the time for step by step progress has passed. We need to see action go further and faster to fully unlock the benefits of a reuse revolution. Thanks for listening to this episode of the circular economy show. We're planning a midseason Q&A episode. So if you have any burning questions for the team at the Ellen MacArthur Foundation, drop us a line a podcast@emf.org. Or if you're listening on Spotify, you can leave a comment in the q&a section of our show notes. See you next time.