The Rise of Refillable Packaging in the Global Sustainability Movement

Since 2019, a global coalition of packaging manufacturers, brands and retailers have offered reusable, refillable packaging in collaboration with TerraCycle’s Loop, a global platform supporting the sale and collection of reusable packaging. Image courtesy of Loop.

By Swapna Gawale, Project Manager at Towards Packaging

As an environmentally friendly alternative to single-use disposables, refillable packaging encourages consumers to embrace sustainability by frequently refilling and reusing containers. This revolutionary packaging solution has found uses in several sectors, including beverage packaging, cosmetics and natural cleaning products, intending to create a culture of reuse and dramatically reduce plastic waste.

The global refillable packaging market size, valued at $41.50 billion in 2022, is projected to reach $ 61.72 billion by 2032. This expansion is registered at a consistent compound annual growth rate (CAGR )of 4.1% over the period from 2023 to 2032.

The worldwide refillable packaging market is expected to surge, reaching an estimated value of $61.72 billion by 2032 according to Towards Packaging analysts.

The environmental impact of reusable packaging

Not only does refillable packaging help the environment, it represents a shift in consumer behavior by promoting a value system that emphasizes reusability, durability, and economical consumption.

The one-time use and subsequent disposal of packaging materials characterizing the existing linear paradigm of plastic consumption is no longer viable. Refillable packaging intervenes as a practical way to break free from this habit. The sector facilitates a transition towards a circular economy by encouraging refillable containers, significantly contributing to addressing the plastic packaging issue.

Reusable packaging is very practical and lessens the energy and waste required to produce new packaging, and lessens  harmful environmental effects of disposable single-use packaging. The main goal of refillable packaging is to provide customers the choice to prolong the life of their containers, therefore tackling the widespread problem of plastic pollution.

To put this problem into perspective, an annual total of 15 million metric tonnes of plastic, or two garbage trucks per minute, finds its way into the ocean. A contribution of 21 to 34 billion one-liter polyethylene terephthalate (PET) bottles, or 706,000 to 1.1 million metric tonnes of plastic, comes from the non-alcoholic beverage business.

The plastic packaging problem has to be solved on a global level to ensure a sustainable future, particularly when it comes to beverage bottles. More than 20,000 plastic bottles are sold global every second. Remarkably, just 7% of these millions of plastic bottles are recycled to make new ones. The products also often come in secondary packaging made of plastic or recyclable paperboard.

Embracing refillable packaging in e-commerce marketing

E-commerce enterprises selling consumer packaged goods (CPG) have a great potential to capitalize on the growing trend of refillable packaging by incorporating refillable choices into their marketing campaigns. By doing this, these businesses not only support sustainable practices but also have the opportunity to increase brand awareness and first purchase prices, which will help to counteract the rising expenses of acquiring new customers.

It is especially smart for CPG companies who sell products online to highlight refillable packaging in marketing campaigns. When things are packaged in a refillable way, the initial higher purchase price is not only a cost; it is an investment. The possibility of a long-term payback of this initial expenditure adds to the business model’s viability. Highlighting the benefits of refillable packaging to consumers that care about the environment can increase brand loyalty and draw in a certain market niche.

Refillable packaging could place e-commerce businesses in a unique position in the retail industry, where consumers frequently base their judgements about what to buy on their in-store experience. When customers compare products on actual store shelves, handling refillable packaging can provide a tactile experience distinguishing these products from rivals.

This first-hand interaction with refillable packaging can be a potent selling point by offering a concrete and unforgettable experience that promotes brand recognition and preference. Even while all sustainable firms may be dedicated to environmentally beneficial methods, those that take a different tack, like highlighting refillable packaging, may be able to gain an advantage over competitors.

Reliability of a perhaps higher price point and handling the extra work involved with refillable solutions provide challenges for firms that are similarly sustainable. E-commerce CPG companies can overcome these obstacles and forge a unique niche in the constantly changing consumer preferences by implementing strategic marketing initiatives that clearly convey the long-term advantages of refillable packaging and present it as an expensive, environmentally responsible option.

Gaining consumer insights through refill-on-the-go technologies

All models that allow customers to refill their containers on-site, such as in-store dispensing platforms and packaging-free “buy by weight” merchants, are considered refill-on-the-go solutions. Refill-on-the-go models can be utilized for all quickly moving consumer commodities, including food and drink and household and personal care. By allowing consumers to “only buy what you need,” the model can satisfy their needs and reduce wasteful product consumption. Refill on the go can also help lessen the need for single-use sachets in low-income areas.

Refill-on-the-go options can cater to customers’ desire for more customization by providing a valuable way to “pick and mix” the flavors that best suit their preferences. Additionally, by using refill-on-the-go dispensing devices that identify users and capture preference data, marketers may employ this strategy to gain consumer insight.

Customers who want more personalization can be satisfied by refill-on-the-go alternatives, which offer a convenient method to “pick and mix” the flavors  that best fit their tastes. Marketers can also leverage refill-on-the-go devices that identify consumers and record preference data to gain consumer information.

Brands embracing refillable models

Key players are driving innovation in the refillable packaging market, and recent developments include:

In 2019, a global coalition of packaging manufacturers, consumer packaged goods brands and retailers joined TerraCycle’s Loop during the World Economic Forum Annual Meeting in Davos, Switzerland, starting a global effort to introduce reusable and refillable packaging, and reduce dependency on disposable single-use plastics.

In December 2022, PepsiCo declared a global packaging objective to increase from 10% to 20% by 2030 the proportion of beverage servings it sells that are supplied in refillable models.  This goal is a component of PepsiCo Positive (pep+), the company’s end-to-end, strategic business transformation that centers on people and sustainability as the primary means of generating growth and value. In order to radically change the way that people drink beverages, it will be necessary to provide reusable and refillable solutions that are widely available and easy for customers.

Launched in April 2022, the Amcor Lift-Off initiative seeks breakthrough, state-of-the-art solutions that will further advance objectives to make the future of packaging more sustainable, and provides funding to start-ups.

In September 2023, a new refillable packaging competition for liquid food and beverages was introduced by UK Research and Innovation (UKRI).Grants are available for business-led initiatives that replace single-use packaging for liquid items with refillable packaging.

Nestlé is stepping up its efforts to cut the usage of virgin plastics by one-third by 2025 and to make all of its packaging recyclable or reusable by then. The firm unveiled a number of new projects, including the first-ever recyclable paper packaging for Maggi bouillon cubes in France, a refillable pet food system in Chile, and made a $30 million investment to boost the amount of food-grade recycled plastics in the US. By weight, 87% of Nestlé’s packaging is already recyclable or refillable, while 66% of its packaging is made of plastic.

About the Author:

Swapna Gawale is the Project Manager at Towards Packaging. She is a seasoned research consultant with expertise in conducting and analyzing complex research projects across various industries.  Download the refillable packaging report at https://www.towardspackaging.com/insights/refillable-packaging-market-sizing, and learn more at www.towardspackaging.com.