the circular economy – how can innovation help?

27 May 2016 S3908-P-793_Summary v1.1

Sajith Wimalaratne & Edward Brunner

Food & FMCG Open Innovation Forum

The Circular Economy – how can innovation help?

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Edd BrunnerHead of Food and Beverage Systems10 years experience in product development across Consumer and Industrial sectors

Sajith WimalaratneCommercial Lead, Food and

Beverage Systems7 years experience in consultancy

across the FMCG sectors

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WHAT IS THE CIRCULAR ECONOMY?“Keep resources in use for as long as possible, extract the maximum value from them whilst in use, then recover

and regenerate products and materials at the end of each service life”

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Roughly one third of the food produced in the world for human consumption every year —

approximately 1.3 billion tonnes — gets lost or wasted

Food and Agriculture Organisation

Why is this important?

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MSW generation levels are expected to double by 2025World Bank Group

Solid waste generation rates are rising fast, on pace to exceed 11 million tonnes per day by 2100Nature


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Over the past 30 years, 30% of the world's natural environment has been destroyed, populations of

freshwater animal and plant species have been halved and natural forests have declined by 10%

World Health Organisation


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50 million tonnes of e-waste generated every year and it is increasingThe Guardian


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Regulation and policiesGovernments are introducing new regulations and policies which are enforcing us to do something

FinancialCost is always a significant requirement of any product, and it is possible to reduce cost and eco impact

Volatility in natural resourcesIt’s a fact that natural resources are becoming scarce, and so we have to innovate to identify other options

Volatility in ingredientsFood and Drink is nothing without the raw ingredients and so we need to consider the long term to maintain supply

Consumer perceptionThey may not be willing to pay more for an eco-friendly product, but it does influence decisionsW

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WHAT CAN WE DO ABOUT IT?There are opportunities across the whole supply chain

A system level view is important:– Identify where the most significant opportunities for improve are– Ensure that changes we make in one area do not have a negative impact overall

Sustainable ingredients

and materialsBetter design

Increased production efficiency

Innovative consumption

Improved logistics

and stock control

Better waste

recovery

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and materials



Improved logistics

and stock control

Better waste

recoveryBetter design

Good design is fundamental to minimising the eco impact of a product.

Approaches such as design for durability (so a product will last longer) or design for repair (such as the iPhone which has created a whole mini economy of repair services) can all help

However, design should not just have eco impact as a requirement – it is not a high enough priority for consumers alone. Take the opportunity to make the product better – e.g. Unilever’s Compressed Can is not only environmentally better but also more convenient

Considering how the consumer uses a product is also important – we ran a study on vacuum cleaning and found that for 40% of the time an upright vacuum cleaner is switched on it is not used (while the consumer moves furniture etc.). By adding a feature that automatically switches the vacuum cleaner off when this is the case, a significant saving in energy use can be achieved

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and materials


Improved logistics

and stock control

Better waste

recoveryBetter design


Changing consumer behaviour is notoriously difficult. However it is possible, particularly where convenience is improved or other benefits are offered to the consumer

We strongly believe that more innovative use of concentrates in the beverage sector could have a significant impact on reducing the shipment of water across the world and hence reduce shipping costs and environmental damage.

Britvic is doing a lot in this area, with their super concentrate product Squash’d. This naturally lends itself to allow consumers to customise their water wherever they are. Equally, their campaign to encourage consumers to drink more water through providing simple mounts for the workplace is simple but effective.

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and materials



Improved logistics

and stock control

Better design

Better waste

recovery

Thinking about the end of life of a product is clearly important. There are two aspects of this – the infrastructure to deal with disposal and the design of the products themselves. And of course, the two must be considered together

There has been a lot in the news recently regarding single serve coffee products, and the impact that the amount of packaging used is having on the environment. The city of Hamburg has even gone as far as to ban such products from government buildings. This is despite Nespresso, for example, having dedicated recycling processes. This in itself is part of the problem – the fact that a dedicated recycling process is needed and not fitting in to existing processes provided by governments

However, there is an argument that could say they are better than products such as the Senseo, where the primary packaging is paper based and compostable. That argument is that those products are packaged in multi-packs, where the coffee can quickly loose its freshness and so many could be thrown away unused. This emphasises the point that looking at the complete lifecycle and how a product is used is important

Petainer are one of the many companies entering the PET beer keg market with their Linestar product. What is interesting about this one is that the different plastic materials can be separated very easily and put into established recycling processes

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OUR KEY TAKEAWAYS…

Consider the whole life cycle when innovating – understand how your product interfaces at each point

Make use of the existing infrastructure – it’s bad to have to create your own

circular economy

Innovate not just for the circular economy – find additional benefits

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the circular economy – how can innovation help?

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