The circular economy is the latest sustainability buzzword that has captured international attention.
So, what exactly is the circular economy, and what does it mean for brands—and product packaging in particular?

At its most basic, the circular economy refers to a fundamental shift in how we do business. It’s a shift away from the linear take-make-dispose model toward a restorative and sustainable way of doing business. The circular economy refers to closing the loop on the lifecycle of products and packages, finding ways for those materials to be shared, reused and continuously recycled. It also represents an option that can allow businesses to continue to thrive and grow while reducing our dependency on finite resources and delivering environmental innovation throughout supply chains.

Consumer demand supports this trend toward a circular economy. According to a consumer survey commissioned by Tetra Pak, 76 percent of respondents believe that the focus on environmental issues will increase in the next five years. And 38 percent of consumers reported that environmentally sound packaging makes them much more likely to consider the brand.

Packaging, often regarded as what gets thrown out or recycled once a product is used, presents a particularly interesting opportunity for circular economy innovation. The opportunities for business are bountiful, and most brands are employing at least some of the principles of the circular economy in their operations today. These principles are actually sound business practices, including doing more with less.

Do more with less

This principle is about infusing packaging with a smart design from the start. The decisions made during the crucial design phase will impact the environmental profile of a product in every stage of its lifecycle. It’s important to look for ways to decrease the overall amount of materials to optimize the package’s environmental footprint. This can have the added benefit of making the packaging more lightweight, requiring less energy for transportation and distribution.

The Ellen McArthur Foundation and IDEO recently published The Circular Design Guide, which takes a “radical, restorative, regenerative approach to business.” This new resource offers businesses guidance to help them create more elegant, effective and creative solutions for the circular economy.

Make smart material choices

Materials play a crucial role in creating circular economy-friendly packaging. Circular principles dictate that brands should consider not just the safety of their materials but also the lifecycle of their product and its renewability.

To leave behind the old linear model, packages designed for the circular economy should utilize materials that are either recycled or renewable, such as bio-based plastics or certified paperboard. Keep in mind that a truly circular package will be able to be reused again and again, in its original form or a new form.

Extend the life of both product + package

In the circular economy, extending the life of both the product and the package is crucial. A sustainable package will extend the life of a product by protecting the contents within. For example, the right package for food and beverages will accomplish this by preventing exposure to light or oxygen to protect the product’s taste, color, smell and nutritional value. Products that have a longer shelf life make better use of the resources that went into the product and protect against unnecessary waste. Aseptic packaging is a great example of this. This technology extends products’ shelf life without the need for preservatives or refrigeration.

Extending the life of a package also means taking into account the end market: Where the package will go and what it will do. For carton packaging, extended the life of the package often means being recycled into tissue paper or creative composite materials. ReWall, a building materials company, utilizes 100 percent upcycled packaging to manufacture building materials such as wallboard, ceiling tiles and more. In a very real way, this business is closing the loop to a circular economy.

Communicate core values

According to Mintel, consumer interest in the stories behind food and drink is on the rise. In fact, 62 percent of U.S. shoppers think that store brands should provide more information on where products are made. Consumers are increasingly curious about the products they consume, demanding more information on where products are coming from and how they were produced.

Packaging can work for the brand by including messages about the lifecycle of the package and product, including processing, packaging, ingredient and material sourcing, and company ethics. A brand can utilize visuals to enhance storytelling, and consumers can be encouraged to help “close the loop” by properly reusing or recycling the packaging.

For example, the CEO of Pret A Manger, a U.K.-based food and coffee shop, took to Twitter in 2017 to gather ideas that would encourage customers to bring in reusable coffee mugs. This move had the dual benefit of engaging customers and highlighting the company’s commitment to environmental causes and sustainability. It also led the company to double its discount for customers who bring in that reusable mug. Leveraging the package, social media channels and other forms of consumer communication to convey a brand’s values is a smart way to connect with the consumer and build brand loyalty.

Collaborate + communicate

The circular economy requires greater communication and cooperation between product developers, manufacturers, designers, marketers, consumers and end markets.

A great example of this practice in action is the Circular Economy Lab, which brings together private and public sector leaders and innovators across Canada to co-design, pilot and test circular-economy solutions. Another example is the Center for the Circular Economy, a collaborative center for innovators to commercialize products, services and technologies that lead the transition from the linear to the circular economy.

The status-quo model of take, make and waste is no longer viable from both a business and environmental perspective. The good news is that resources to help shift to a circular economy are plentiful, and new technology is presenting innovative new ways to accomplish this. Making the shift will not only ensure a brand’s business model is viable into the future, but will also help to
win over critical consumers.