Market Report
The Future of Reusable and Refillable Packaging to 2029
Q&A: Market outlook for reusable packaging
Refillable and reusable packaging sales are forecast to increase by a CAGR of 4.5% to 2029, according to new Smithers research in The Future of Reusable and Refillable Packaging to 2029. Report author David Platt discusses the outlook for the industry and the challenges and opportunities facing the market over the next five years.
What are the main threats the industry needs to be wary of going forward?
Primarily, the lack of government vision, targets and direction for reuse systems. The current linear approach of policy, with a heavy focus on recycling policy and investment, is a major challenge. Legislation should be more focused on tipping the economic scales in favour of reuse systems by incorporating the full costs of single-use packaging, including waste and environmental aspects. A clear and consistent reuse system policy framework and the establishment of reuse system standards would be desirable.
Another threat to the industry is low consumer acceptance; consumers fail to respond in sufficient numbers to R&R packaging initiatives, because it is considered to be either too costly, inconvenient or is too much hassle compared to their usual shopping habits. Consumers struggle to respond sufficiently to economic incentives and reusable packaging is not returned in sufficient volumes for reusable packaging systems to be economically viable.
How is the reusable and refillable packaging industry adapting to demands of wider industry pressures?
The reusable and refillable packaging industry is developing in a very slow and fragmented way to date. The mature consumer and industrial markets are well-established and unlikely to grow at a rate much faster than overall packaging sales.
The developing segment of the market consists of a multitude of small-scale start-up businesses and individual R&R in-store trials at major retail chains around the world. The development of reuse systems requires significant logistical infrastructure, which is possibly beyond the scope of individual businesses, but which could be developed through collaboration, potentially led by logistics companies.
To date, many reuse systems act independently of each other and there is a lack of collaboration along the value chain and between value chains. While reuse systems can be a significant business opportunity, there is a need for collaboration, co-partnering, and pooling. These require finance and standardisation, as some reuse systems need significant infrastructure investment, and the cost of these changes can act as a barrier.
It would be more convenient and less confusing for users if there was collaboration across multiple brands, locations and platforms. It would also be easier to change consumer behaviours if there was a consistent approach to reuse across the food and drink industry, and scaling in this way would help to normalise the behaviour of reuse. Other potential benefits of greater collaboration include more availability of return points, and reduced costs if brands shared reverse logistics networks.
What is the impact of sustainability on the reusable and refillable packaging industry?
Environmental concerns and sustainability are key drivers for reusable and refillable packaging. Reusable and refillable packaging is just one way in which packaging can be made to be more environmentally-friendly and sustainable and hence contribute to the goal of a more circular economy.
Consumer demand for more sustainable packaging has a significant influence on businesses and is critical for the replacement of single-use packaging systems with reuse systems. Increased costs of reusable and refillable systems are however a significant barrier for consumers. Convenience for consumers is also considered to be one of the most important reuse system enablers. In addition, consumers are busy, and are often reluctant to accept change, so reuse systems should fit seamlessly into their shopping habits.
What opportunities await the reusable and refillable packaging industry over the next five years?
Consumer support for sustainable packaging is strong, and consumer concern about single-use plastic packaging is growing.
EU national governments have either established deposit-return systems (DRS) or are in the process of implementing DRS. DRS is a useful facilitator of R&R packaging provided systems include specific provision for R&R packaging. Unfortunately, not many do so, focusing instead on recycling of post-consumer plastic packaging.
Technology has many potential benefits for reuse systems by: incentivising returns, visualising a customer’s usage and impact, simplifying the process for payments, deposit refunds and earning rewards, and providing reliable information for businesses on stock levels and return rates. Tracking and traceability of the reusable packaging is very important as reusable packaging data and consumer activity data are vital to the successful implementation of reuse packaging systems. The most commonly used tracking methods are QR codes and RFID tags.