Reusable packaging: Niche segment or new norm?
2022/11/18
Without a “significant change in trajectory”, the global market for refillable and reusable packaging is forecast to reach a mere 5% penetration rate by 2030. Yet, says McKinsey, increased consumer demand, regulations promoting reuse and product and retail adaptations could propel the segment from niche to a new standard.
Reusable packaging is undergoing a revival, according to a new report from McKinsey & Company. This renewed interest is being driven by “sustainability pressure” from both consumers and regulatory authorities, says the consulting firm. Yet a change in trajectory is needed for refillable and reusable packaging to become the norm, rather than just a niche. Indeed, McKinsey says that significant scale beyond a particular segment or country is yet to be seen. If the status quo persists, the penetration rate of refillable or reusable packaging globally will reach a maximum of 5% by 2030, hindered by lack of infrastructure, a push for packaging reduction generally, cost, acceptance in the supply chain and product safety.
So what could shake up the market to make refillable and reusable packaging the new standard? McKinsey says that cost would need to be on a par or less than that of existing solutions and more standardized packaging and cross-utilization across different products, brands, or stores will likely be necessary. Packaging will have to meet product format and hygiene requirements, and harmonized ecosystem and regulatory framework beyond country level should be targeted.
Brands could encourage consumer loyalty by adding a “switching” cost for reusable packaging, while offering more durable packaging designed to be returned to provide a better consumer experience. And if innovative players or start-ups disrupt the market by introducing products that are cost-effective, convenient, hygienic and incentive-based, penetration of the refillable and reusable packaging market could exceed 10% by 2032 and become an industry standard. McKinsey highlights the importance of collaboration between packaging players across the value chain, specifically in terms of sharing investments.
“Reusable packaging could scale to broader adoption within the packaging value chain as an alternative sustainable solution. However, industry leaders will need to overcome barriers ranging from reducing costs and finding ways to share investments to harmonizing beyond the country level for this to be successful,” the report concludes.
Source : https://www.luxepackaginginsight.com/article/reusable-packaging-niche-segment-or-new-norm.61762