Reusable and refillable packaging sales to reach $53.4 billion by 2027, says SmithersReusable

Plastic packaging makes up 45% of the global packaging industry by volume, with the vast majority of it being virgin plastic

Global brands like Nestle, PepsiCo, Mars, P&G, Coca Cola, and Kraft Heinz are responding to pressure to reduce their use of virgin plastics but are struggling to hit their goals, Smithers has said in a newly published white paper.

The market intelligence firm, providing services for the packaging, paper, and print industries, outlined five strategies global companies are deploying to achieve plastic reduction goals. These include switching to fibre-based or biodegradable packaging, increasing post-consumer recyclate (PCR) content through product design and chemical recycling, and deploying reusable and refillable packaging.

Global sales of reusable and refillable packaging reached $42 billion in 2022, showing a modest compound annual growth rate (CAGR) of 4.0% since 2017, Smithers said. It forecasts growth to accelerate to 4.9% annually to reach $53.4 billion by 2027.

Business models for reusable and refillable packaging includes refill at home, return from home, refill in store, return in store, and deposit return schemes. These initiatives are at the core of the European Commission’s proposal for a revision of EU legislation on packaging and packing waste introduced last November. The policy targets a reduction of packaging waste by 15% by 2040 per Member State per capita, compared to 2018 levels.

Smithers noted that new initiatives are gathering attention as an opportunity to reduce overall packing use. This July, for example, UK-based recycling technology expert Polytag and Sweden-based recycling app Bower teamed up with online supermarket Ocado Retail to roll out the world’s first digital deposit return scheme for milk containers.

However, “reusable and refillable packaging is considerably less convenient for consumers and will require significant changes to existing supply chains to accommodate it without increasing carbon footprint from additional transportation,” the company said in the whitepaper.

Nestle, which introduced a steel refillable container for their powdered chocolate milk brand Nesquick, has run over 20 trials and, so far, results have not met the company’s re-purchase and return rates. The main reasons are “consumer expectations of high convenience at low costs and quality challenges,” Smithers said.

The company noted that while the performance of reusable and refillable packaging is already at a similar level to virgin plastic, its cost is still higher and is unlikely to reach parity by 2030. Lack of current availability at commercial scale and modest consumer perception are also considerable obstacles to widespread adoption of reusable and refillable packaging.

“Making progress will require not just a new systems-level approach to change delivery models to include reverse logistics and reduced carbon transportation options, but also a fundamental shift in consumer attitudes and behaviours,” the white paper concluded.

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