Founded in 2014, Closed Loop Partners has been investing, supporting and promoting a range of circular economy collaborations with a range of players, including global consumer goods companies, retailers, industry experts and municipalities — to name a few. Scaling commercial composting, advanced recycling collaborations, mechanical recycling, and commitments from large food and beverage companies are just some of the issues Closed Loop Partners is working on.
In late 2021, Closed Loop Partners announced a private/public partnership with a small-scale materials recovery facility, called the Solid Waste Complex of The Authority. The collaboration included The Authority, Closed Loop Partners and Canusa Hersman, a recycling company, where Closed Loop brokered the financing of an application that manages valuable materials through small-scale recycling units. The units are less capital intensive and seen as a way to increase recycling in the U.S.
Closed Loop Partners has also thrown its support behind advanced recycling — or molecular recycling — in the U.S., and works together with the American Chemistry Council to educate industry professionals on the technology and how to scale. For example, Flexible Packaging magazine wrote about Procter & Gamble’ s polypropylene advanced recycling technology that was eventually licensed to PureCycle. This advanced recycling example is on how to manage a pilot project to commercial viability.
Ron Gonen, CEO of Closed Loop Partners, has a lot of thoughts on the circular economy and recently released a book, titled, “The Waste Free World: How the Circular Economy Will Take Less, Make More, and Save the Planet.” The book talks about food waste, circular economy “innovators” and, of course, solutions. Below is our conversation on the book, industry solutions and what the circular economy might look like in 2025.
FLEXIBLE PACKAGING MAGAZINE: We’ve written about numerous industry stakeholder collaborations in 2021 and how these collaborations are aimed at adding more recycled content to the supply chain. Can you talk a little bit about the ideas of localizing supply found in your book, what it means and its implications?
RON GONEN, CLOSED LOOP PARTNERS: Localizing the supply of recycled materials means saving billions in tax dollars spent annually to send plastic to landfills and improving the health and prosperity of our environment and local communities. In the past 70-ish years, the world has produced 8.3 billion metric tons of plastics, half of which was produced in the last fifteen years alone. This shows that despite our awareness of the climate crisis surrounding us, plastic production is not ceasing; which means, we need to find a profitable way for businesses to reuse these plastics before they further pollute our communities, soil, oceans and air. This is a systemic challenge that producers, retailers and consumers must tackle together.
No one institution or solution can build the circular economy alone, and even if they could, the change would not happen fast enough to slow down the effects of climate change. More than 250 brands and retailers in the U.S. have committed to increasing their use of recycled plastics in products and packaging, but the current supply only meets 6% of demand in the U.S. and Canada. This gap presents a huge business opportunity.
With any system-wide transformation, the path forward is complex, nuanced and involves experimentation. A collaborative, multifaceted and localized approach can accelerate the process. We need systems that are designed to use fewer materials in the production and delivery of products and keep materials in circulation at their highest value for as many generations as possible, if not infinitely.
Global supply chain disruptions will continue for years to come. As they do, localizing supply sources for recycled plastics is increasingly critical to building resilience against system shocks. Much like the “Shop Small” or “Eat Local” movements, companies are looking to source, manufacture and produce products made from recycled materials collected, produced and manufactured locally. This approach will reduce carbon footprints, save billions in tax dollars, increase the rate of recycling, and bring lasting business and job opportunities to local communities.
FP: A summary point about your book mentions smart packaging. What smart packaging technologies, design or applications do you see making inroads in 2022 or 2023, or in 2025? And please cite any challenges in scaling these technologies?
GONEN: Within the next decade, I feel that there will be a considerably high adoption of smart packing technologies. At the end of the day, to generate adoption, these technologies need to be good for our planet, but they also need to bring financial value to both commercial and end consumers.
As an example, one smart packaging company in our portfolio is called Algramo. It started in Chile and came to New York City in 2020. It’s a tech-enabled refill system that dispenses measured amounts of household cleaning products from vending machines into smart, reusable containers to reduce waste and eliminate single-use plastic packaging. In addition, consumers only pay for what they need, so there’s minimal cost waste on that end, and CPG companies are spending considerably less on new packaging materials.
The challenge in scaling these technologies continues to be in the fact that it’s much easier for CPG companies to purchase virgin plastics, as they are oftentimes cheaper than multi-use options and companies are not responsible for the end-of-life disposal or reuse of their products, so there’s no incentive or expectation to see a product through to the end. As these laws and subsidies change both state-by-state and nationally, such as what we’re seeing in Maine with the implementation of Extended Producer Responsibility (EPR) laws, these reusable smart packing solutions will become more widely adopted.
FP: I’ve been writing about CPG messaging to consumers about recycled plastic content and how brands are comfortable with that messaging in the near term. Do you have thoughts on how CPGs could also add food waste to the consumer conversation?
GONEN: CPG companies can use their platforms to raise awareness around the issue of food waste and encourage consumers to recycle any unused scraps through local food waste collection programs or practice better food disposal habits at home. In New York City for example, under the Bloomberg Administration, the city used a process called anaerobic digestion to convert this waste into rich compost that was sold to landscapers or turned into natural gas. Solutions like this are starting to hit the mainstream consumer market as well. HomeBiogas — one of our investment companies — offers consumers an anaerobic digestor for their home that converts food waste into natural gas. While something like this may not be for everybody, simply composting food scraps or taking better note of what’s left in your fridge can both be simple solutions for end consumers that CPGs can message around.
Additionally, CPG companies now can work food waste solutions into their actual packaging. Smart indicators, laser etching, better storage solutions and circular packaging will all enable CPGs to leverage technology and information to ensure their products are in the best state possible when they are purchased and consumed.