Cost of living crisis could hit reusable packaging, warns Tesco

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Tesco ended its nine-month reusable packaging trial with Loop, a reuse platform run by waste management company Terracycle, in June and published a report on its “shared learnings” yesterday (August 15).

Launched in 2021, the trial saw customers pay a deposit for an item that was refunded upon return of packaging (see letrecycle.com story).

The supermarket says the pilot, alongside another online trial the year before, proved that shoppers wanted to buy items in reusable packaging. Tesco sold over 80,000 products during two years of trials.

However, reusable packaging often costs more to produce “per unit” than disposable packaging, according to the report.

Pilots have also shown that the cost of cleaning and pre-filling reusable packaging can cost more than the product inside. The retailer added that it was aware that “most customers naturally do not want to pay more for products in reusable packaging”.

And, Tesco says the investment needed to deploy reuse at scale is “significant”, as it forces retailers to operate with new processes and manufacturers to create new production lines.

The cost of collection, cleaning and refilling needs to come down, says Tesco, as “the current focus on cost of living highlights the need to control expenses and ensure competitive pricing on storage solutions. refillable and durable packaging”.

It is also necessary to improve labeling and communication, “to explain that part of the price is a fully refundable deposit”.

Radical change

Giles Bolton, responsible sourcing director at Tesco, said it was clear from the trials that a ‘pre-fill’ reusable model had ‘high potential’ and could offer customers ‘the ease and convenience that ‘they wait”.

Reuse represents a radical change in the shopping experience

  • Giles Bolton, Responsible Sourcing Director of Tesco

However, he said there was still “a lot more” to do. “Specifically, work is needed to encourage cultural and behavioral change in customers,” he added.

“Reuse represents a step change in the shopping experience and while customers support the environmental principle, industry, policy makers and supply chains will need to work hard and work collectively to support and inspire customers to adopt new purchasing behaviors, while ensuring that they do not come at the expense of buyers.

Tesco said the pilots confirmed that pre-filled purchases were most popular among a “small percentage” of environmentally conscious shoppers. The supermarket says its surveys show the public “has not yet fully appreciated the differences and benefits of reusing versus recycling”.

Scaling up reuse

Other key areas identified by Tesco to focus on to roll out reuse at scale across the UK include simplifying the customer experience.

To do this, Tesco suggests it could remove the need to download a standalone app to receive a deposit refund, speed up deposit refunds and ensure the shape of the packaging is “optimized for transport and for s easily fit the average British household,” among others.

Pilot

In the online and in-store pilots, a refundable deposit of between 20p and £1 has been paid for each reusable packaging item to encourage customers to return it.

During the trial, customers returned their packaging to an in-store collection point

The deposit was refunded in full through the Loop app when customers returned the packaging, either through a courier or directly to an in-store collection point.

The returned packaging was then cleaned, filled and made available to the next customer.

Related link
Sharing lessons on the reusable packaging report

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