The Dutch Ministry of Infrastructure and Water Management invited Mission Reuse to conduct a study on how to set up environmentally- and cost-efficient reverse logistics in the Netherlands to bring reusable packaging to scale.
It is highly possible that the beer bottle you are holding was last used by a Dutch actor sitting 100 km away. Before you panic and look at that bottle with contempt (or admiration), rest assured that it was thoroughly washed, sanitized, inspected, refilled with another batch of freshly brewed beer by the brewery, labeled, packaged, and then put back on the shelves of the supermarket. That is the beauty of the reuse concept. However, one of the major challenges of making such a system work is getting the reusable asset (the beer bottles, for instance) back into the value chain. In this long journey of extending the asset’s lifecycle, 50% is reverse logistics — a logistical process of returning a used asset by a consumer to the manufacturers or sellers.
It starts with the end consumer realizing the value of the used asset. A deposit or an incentive helps add value to that product, and ramps up the return rate.
“This prompts them to bring the product back, and the whole return logistics starts. When there is no incentive, fewer individuals are likely to return it, thereby diminishing its value as a multi-use asset,” explains Nienke Nijholt, a venture builder at Enviu’s Mission Reuse program.
In countries like Belgium and the Netherlands, nearly everybody is aware of the deposit return system (DRS) for glass beer bottles, where a consumer buys the product, pays a small additional price (deposit) for the packaging, and receives a refund on returning it. However, although it is a relatively low deposit price, consumers return the glass bottles. That triggered the Mission Reuse team.
“It is glass, and does not have a major deposit value. Yet, why do they bring it back? Why does it have a high return rate? What makes the system work for a beer bottle, which is a B2C product? How do B2B systems work? Do they have similarities, the same leverage points, and what are the key factors that need to be in place for something to start the return logistics?” asks Elise Lippens, a venture builder with Mission Reuse.
This prompted the team to research and understand the backend process. They published their findings in a report, demonstrating that collaborative and shared solutions for washing facilities and reverse logistics are essential for making reusable solutions competitive.
In 2022, the report further prompted the Dutch government to invite the Mission Reuse team to draw up another research report that chalked out recommendations for governments to set up reverse logistics, thereby encouraging reusability scaling in the Netherlands.
The team interviewed reuse experts from multiple sectors — start-ups, non-profits, and market leaders — to examine existing reverse logistics models and their leverage points. In January 2023, the Netherlands government published Mission Reuse’s report on reverse logistics for reusable packaging.
The report intends to feed into new legislations, pilots, and research. It features learnings from existing reverse logistics models as well as recommendations to the government on how to set up an efficient multi-use system in the country.
“We will see more diverse reusable assets popping up in the coming years, which need to be transported back to washing facilities and, eventually, to the retailer. In such a scenario, we need to ensure all logistical streams are aligned,” explains Nienke, one of the researchers of the report. One of the recommendations is leveraging the existing network of infrastructure, such as an empty space in a truck, a collection point at the corner of the station, or the central railway station that has massive footfall every day.
“Additionally, the government has the power to influence the development of a reuse infrastructure, standardize and facilitate certain processes, create a level-playing field for single-use and reuse products, and make reuse a competitive market,” adds Elise, a co-researcher of the report.
Incidentally, Mission Reuse is uniquely positioned to engage in such a foundational research project. Mission Reuse is a coalition of three organizations — Enviu, Natuur & Milieu, and Recycling Netwerk Benelux — who bring rich individual expertise to the table.
Enviu builds companies using innovative ideas to create circular economies. Natuur & Milieu creates awareness of reuse by working with governments, companies, and other stakeholders. Recycling Netwerk Benelux engages in lobbying and legislating sustainable models (like reuse). Together, the coalition has already built a vast and quality bank of research insights and networks. This allows them unique access to solution providers and industry expertise.
Five key takeaways
Incidentally, the report holds relevance at a time when legislations obligate the industry to transition towards reuse; for instance, the Dutch legislation for to-go and dine-in or the implementation of reuse targets in the proposal of the Packaging and Packaging Waste Regulation (PPWR). Besides, conscious consumerism and a sustainable business mindset, too, are gaining more momentum.
In this report, Mission Reuse identified and analyzed four reverse logistics models, which numerous companies use — Lemon Tri, Lena (fashion library), Boxo, Dynalogic, Pieter Pot, DHL, Budbee, H&M, Gorillas, Vytal, Picnic, Euro Pool System, EPAL, Nederlandse Brouwers, Mehrweg, SwapBox, and RePack.
Here are five key takeaways from these models:
- There is no ‘one-size-fits-all’ model. Choosing the suitable model depends on numerous factors, including the industry, type of assets, geographical location, and the power dynamics between stakeholders. The model may need to be tailored to fit the specific needs and constraints of the context to increase the likelihood of its success.
- All parties play their part in a successful value chain, but there is a crucial role for end-consumers, too. Consumers must be incentivized to return the asset to achieve high use-cycles since that directly affects the number of use-cycles of a reusable.
- Leverage existing logistical networks to return reusable packaging — for example, the logistics processes of home-delivery companies such as Gorillas and Picnic Technologies. This prevents cities from becoming more crowded, makes reuse more attractive to customers, and creates potential additional revenue streams.
- Standardization is key. Using the same bottle, cup or meal container streamlines logistics and washing processes. It also has a vital role in optimizing resource utilization. It facilitates a space-efficient system, like how the Nederlandse Brouwers does with beer bottles, and the Euro Pool System with crates.
- Effective reverse logistics processes enable parties to lower raw materials and transportation costs rather than create new revenue streams.
Leverage consumer habits and current systems
“The deposit system for beer bottles also talks about the habit,” says Nienke.
People around the globe, especially in Europe, are used to returning empties. In the Netherlands, the practice actively picked up in the 1980s when a large group of brewers banded under the Dutch Brewers Association (Nederlandse Brouwers) to introduce Brown Dutch Return (BNR) bottles that have 40 reuses in their lifetime. According to the Nederlandse Brouwers, the BNR bottles recorded a high return rate of more than 95% for both bottles and crates.
Today, the value of empty reusables varies, and is much lesser than earlier. “But they are used to handing it in for decades, and that is what makes it (reuse) work,” adds Nienke.
Besides closer and convenient collection points, the secondary packaging, too, galvanizes the return process. A crate for the beer bottles, for example, not only makes it easier to purchase the multi-use asset but also to return it. This ensures a high return, which is essential to reduce the environmental costs of a reuse system.
“Consumers are familiar with the return system, and we have existing systems to make it happen. The next step is collaborating, leveraging, and growing these systems to normalize reuse over recycle, and instead of single-use coffee cups,” says Elise.
Besides leveraging and optimizing the existing systems, we also need a universal system that can handle a wide variety and amount of cups to bring reuse to scale, says Nienke.
If you’d like to know more about this report, or would like to collaborate with the Mission Reuse team, write to email@example.com.