Reusable and refillable packaging is one of the most dynamic sectors of the packaging market in 2022, with rapid growth fueled by innovative formats and the need to enact more planet-friendly business models, says a new targeted market study from Smithers – The Future of Refillable and Reusable Packaging to 2027.
By fundamentally rethinking packaging, physical retailers and brands can make a highly visible commitment to cutting single-use plastics, while for e-commerce subscription businesses it provides a major opportunity to differentiate themselves from competitors. This study projects that the market will reach $42 billion in 2022, up from $35.1 billion in 2017. As the industry looks to new concepts to realize true circularity in packaging, Smithers forecasts future growth at 5% year-on-year reaching a value of $53.5 billion in 2027.
Smithers’ analysis identifies four distinct business models:
- Refill-at-home (users refill a container at home)
- Return-from-home (packaging is recovered for reuse from a consumer’s home by the scheme operator, or a logistics company working under contract)
- Refill-in-store (consumers take reusable containers on their shopping trips to refill via an in-store dispensing point)
- Return-in-store (users return the reusable packaging at a store or designated drop-off point)
Reuse and refill is a familiar business model in beverage retailing, especially for glass bottles. For this reason even in 2022, glass packaging for beverages remains the dominant segment, representing over 75% of all reuse refill packs.
Other segments are still at a nascent phase. Brand owners in food, cosmetics & personal care, home care, and other beverage types are investing heavily in reuse/refill concepts featuring more durable packaging design for repeat use and prolonged handling. Strengthened by the experience of Covid-19 and the rise in e-commerce subscription sales, Smithers forecasts each of these new segments will see growth in excess of 30% year-on-year across the next five years.
There are several technologies that will improve the effectiveness of reuse packaging models:
- More expensive reuse concepts can justify the integration of smart packaging concepts as standard, linking the consumer to advice on refill locations and incentivizing reuse, including the development of scheme-specific smartphone apps
- Integrating this with track-and-trace systems will give greater insight into packaging and waste flows, facilitating the more accurate mapping and effective collection of higher value reusable packaging
- There is a limited deployment of refill locations for refill-in-store platforms, greater diversification of these will make them a more appealing option for customers. Immediate priorities are to develop mobile refill machinery, and multi-product dispensers that can provide a range of SKUs comparable to those seen on supermarket shelves
- Superior bottle cleaning technology will increase the number of bottles recoverable for existing beverage refill systems, including the deployment of more automated, decentralized micro-cleaning facilities, and more durable PET bottle constructions.
Another UK study recently showed that while recycling, reuse and composting of packaging will all increase significantly, a fifth of all food packaging could still find its way to landfill and incineration even in two decades time. Today, food packaging is predominantly plastic and recycling rates are relatively low. While fiber-based packaging is widely recycled in non-food uses, the industry believes that by 2040 fiber-based packaging will approach circularity as technical development broadens, according to a study commissioned by UPM Specialty Papers, a sustainable packaging products manufacturer.