Reusable Packaging

Reusable packaging as a complementary way to make packaging more circular

Packaging plays a fundamental role in a circular economy because it can be recycled and reused multiple times, in a closed-loop system. This greatly contributes to minimising its environmental footprint and reducing packaging waste.

With the publication of its revised proposal for the EU Packaging and Packaging Waste Regulation, the European Commission aims to increase the use of reusable packaging solutions in Europe in order to further improve the sustainability of packaging and prevent waste.

UNESDA Soft Drinks Europe is supportive of EU actions aimed at increasing the reuse of packaging in Europe, and considers that they need to be implemented as complementary to systems for collection for recycling. Both approaches contribute to shaping a circular economy and deliver environmental benefits. It is also necessary to create the right conditions and enablers to allow for a successful transition to more reusable beverage packaging, where they deliver environmental benefits.

Different types of reusable beverage systems

There are different reusable beverage systems, all having the potential to reduce both packaging waste and single-use packaging. For UNESDA Soft Drinks Europe, all reusable beverage systems should be considered in the EU strategy to reduce and reuse packaging, and innovative reusable solutions should be further promoted. It is also crucial to understand changing consumption habits and educate consumers on reusable packaging solutions to ensure their acceptance for these types of packaging.

• Refill at home: Users refill their reusable container at home (e.g. with refills delivered through a subscription service or purchased directly).

• Return from home: Packaging is picked up from home by a pick-up service (e.g. by a logistics company).

• Refill on the go: Users refill their reusable container away from home (e.g. at an in-store dispensing system).

• Return on the go: Users return the packaging at a store or drop-off point (e.g. in a deposit return machine or mailbox).

Supporting the integration of more reusable beverage packaging

UNESDA Soft Drinks Europe considers that the following enabling conditions are needed to help the soft drinks sector to successfully increase the use of reusable solutions in Europe:

Assessing the environmental impact of reusable beverage packaging is essential

Understanding the environmental impact of reusable beverage packaging is key in helping determine under which circumstances it brings net environmental benefits. The use of reusable packaging should only increase when and where it makes sense for our environment. In this context, any measure adopted at EU level should provide the necessary flexibility to enable the soft drinks sector to decide if and where reusable packaging should be offered.

The case of reusable beverage packaging (return on-the-go) in Europe – The current market share for soft drinks

Europe’s soft drinks sector uses different packaging types primarily for safety purposes, and as an instrument for differentiating its products and accommodating a wide range of consumer preferences.

Providing more circular, reusable options will maximise the potential to reach a much higher number of consumers.

To date, reusable packaging has been mostly developed for glass containers, but there are also opportunities for reusable PET bottles.

Why enabling conditions are needed – A refillable PET system requires a whole-scale business model change for the soft drinks industry

UNESDA Soft Drinks Europe has pledged to increase the share of refillable beverage packaging in soft drinks in Europe by 2030, as outlined in its Circular Packaging Vision 2030. It has also committed to study the best environmental and economic pathway to increase its use by 2030.

The shift towards more refillable packaging represents major investments and significant changes in the beverage packaging value chain, production, distribution, logistics and retail. In addition, the environmental impact of refillable beverage packaging, compared to its single-use circular alternative, may only prove to be positive in certain situations.

The cost of this business model change to the soft drinks sector is estimated to be €18.7bn for a market share of 20% reusable PET bottles by 2030 at EU level: €12.5bn in estimated additional capital expenditure and €6.2bn in estimated additional operating expenditure.

Key changes in the PET bottles supply chain – refillable PET vs one-way PET

Source: PwC analysis undertaken for UNESDA Soft Drinks Europe (published in 2022)*

Key investments and changes required to move from a one-way PET to a Ref-PET supply chain

Source: PwC analysis undertaken for UNESDA Soft Drinks Europe (published in 2022)*

Key operational differences between one-way PET and refillable PET supply chains

Source: PwC analysis undertaken for UNESDA Soft Drinks Europe (published in 2022)*

Overview of the total incremental costs at each stage of the soft drinks industry supply chain (net present value)

Source: PwC analysis undertaken for UNESDA Soft Drinks Europe (published in 2022)*

Refillable PET system – Main changes in set-up, investment, operations and associated costs

Bottling

• Entire bottling lines need to be replaced as it is not possible to optimise current systems or repurpose one-way lines. Discussions to date suggest that a one-way bottling line costs ~€10m to set up, whereas a reusable PET line costs ~€20m.
• Reusable PET bottling lines are estimated to run up to 50% slower than one-way bottling lines (depending on pack size) due to the added time to wash and the additional quality control checks on returned bottles. Its production efficiency is therefore slower than a one-way PET bottling line.
• Two to three times more space is needed for the bottling line, packing and storage of crates and empty bottles. Most current production facilities cannot accommodate this, even if replacing a one-way PET line with a reusable PET line.
• Upfront investment in ‘float’* is required for bottles and crates (up to four times the amount used at any one time in actual production).

* bottle ‘float’ is the number of bottles needed at any one time across the whole supply chain to support a single bottle sold by a retailer/wholesaler. Given the timeframe needed to return, wash, and refill a bottle, more bottles are needed to flow through the system than just the number of bottles sold at any one time.

Manufacturing

• In most cases, reusable PET bottles will need to be procured from suppliers rather than blown at the bottling line. This will increase logistical complexity and cost.
• New investment in blowing machines will be required because bottles are thicker and up to twice as heavy as one-way bottles. It will be difficult to achieve economies of scale for reusable PET bottle blowing in the short run (as production volumes will be lower).
• New crate production lines will be needed.
• Additional raw materials are required to produce each reusable PET bottle (which is up to twice as heavy as a one-way bottle), and to produce the crates. However, cost per use will fall as bottles are reused up to from 10-20 times and crates up to ~50 times.

Distribution logistics

• Reusable PET bottles in a crate require ~35% more space than one-way bottles (which do not require a crate) and are heavier, so more vehicles required per million bottles (all else equal).
• To achieve environmental and cost benefits, a more decentralised model of production is required than currently exists in most geographies. Due to the two-way bottle flows, it typically requires more bottling sites per million bottles consumed.

Wholesale activities

• There is a need for additional space and additional operations to sort empty bottles before being returned to the original bottler. This will, in turn, imply additional operating costs.
• There is additional need for storage requirement presale, which means additional upfront investment in floor space, and ongoing costs in utilities and labour for sorting.

Retailer activities

• Reverse vending machines (RVMs) that accommodate reusable PET bottles and crates need to be installed, which is estimated to cost around €25,000 (each). An RVM can process around 400,000 bottles per year for 10-12 years.
• Back-end storage and sorting space are required to deal with returned bottles (as they are not crushed so take up more space). This requires 40-60m² of space for sorting per RVM.

Reverse logistics

• A complete new set up is required for returning empty bottles and crates from the retailer (possibly through wholesaler) back to the original bottler, rather than collecting shredded plastic for recycling. Therefore, there will be a significant increase in operating costs from providing reverse logistics (assumes pooling between bottlers is not incorporated into the business model). This is estimated to add an extra ~50% to the distribution costs.

Additional complexities to move to a refillable PET system

Supply chain constraints

• Increased demand for a reusable system could put pressure on existing supply chains, particularly as only a handful of companies currently supply the specific bottling machinery needed for returnable reusable lines. 
• Retailers may also face supply constraints, as bottlers will need time and additional space to upgrade bottling lines to reusable PET lines. Ideally, the transition will be shaped in close cooperation with retail partners.

Realistic transition time

• Given that bottling lines have an asset life of around 15 to 20 years, suppliers and bottlers need a transition time of at least 10 years, for a cost-effective transition to refillable bottles for a return on-the-go system. 

Environmental considerations

• A refillable PET system has additional environmental costs than single-use packaging due to a number of factors, such as: increased utility consumption from operating additional machinery and washing bottles (need to use  separate bottling lines to wash and refill the bottles), and higher fuel consumption from increased logistical complexity (using more vehicles to transport bottles from manufacturers to bottlers and retailers because refillable bottles are heavier and take up more space due to the need to transport them in crates, and then return the bottles back to bottlers, once used). These additional environmental costs must be considered against any additional environmental benefits of a refillable PET system.

Putting in place efficient collection schemes for reusable

• The real costs and transition time to a returnable refillable system will be considerably high without efficient collection schemes for reusable in place. These should be set up in all relevant markets. The set-up of Deposit Refund Systems for returnable refillable packaging can play a key role for this purpose.

Increasing consumer uptake

• A refillable PET system will only be successful if there is significant consumer engagement and behavioural change both to choose to purchase refillable PET bottles but also to choose to return the packaging back into the system once the beverage is consumed. Partnerships between the industry, the EU institutions and EU Members States are needed to develop education campaigns and establish effective deposit return pricing to incentivise consumers to return reusable packaging.

*The analysis examined the type and scale of change likely required along each stage of the soft drinks supply chain in moving from the current industry business model of production and sale of soft drinks in one-way (disposable/recyclable) PET bottles, to a business model that incorporates production and sale of a larger share of soft drinks in ‘returnable refillable’ PET (or Ref-PET) containers, that can be returned by consumers to retail outlets for bottling companies to refill. All conclusions are based on consultation with industry stakeholders, PwC UK’s own analysis of soft drinks industry market data, and data provided by industry stakeholders.