The mountains of packaging waste being produced the world over cannot keep growing forever. Recognition that waste must decrease in order to put the world on a more sustainable footing is spurring exploration of various business models and technologies, from recycling to swapping plastic for paper.
One area attracting increasing interest is reuse, which reduces waste by design. Reuse makes particular sense in the food and beverage (F&B) sector, where single-use materials have grown exponentially in recent decades. The world generated nearly 140 million metric tons of single-use plastic waste in 2021, according to the Minderoo Foundation. That’s an increase of 6 million tons over 2019—nearly all of which was based on virgin, fossil-based feedstock.
In this interview, Fredric Petit discusses why reuse is growing as an alternative to use-and-discard and why Vytal is a savvy investment.
What broad factors are driving the reuse trend?
Many of the same factors influencing sustainability broadly are also at play in circularity, of which reuse is a major component:
- Consumer preference: in a recent survey of people in Europe and North and South America, 82% of respondents said they would pay more for sustainable packaging, up four percentage points from 2022 and eight points since 2021.
- Corporates’ own net-zero and sustainability aims: hundreds of companies—including several of the world’s largest F&B players (a group that includes many Emerald limited partners)—are keen to reduce plastic waste from their value chain.
- Regulation: this is undoubtedly one of the biggest drivers, as plastic waste is highly visible and tackling it is turning into a rallying cry for governments around the world.
Can you provide more details about the regulatory landscape? Why is it such a big factor?
When it comes to plastic waste, governments have shown themselves increasingly willing to enact straight-up bans. This is in contrast to many other sustainability aims, such as fossil fuels, say, where regulators are trying to shift economies away from them, but strict bans are largely off the table or far off in the future.
But plastic waste is emotive for people—who hasn’t seen a video of a sea turtle trapped inside a web of plastics wrap? Governments are more willing to take a harder line. Europe especially is making strides, with the continent enacting both waste-reduction and reuse-mandating policies, including a target for consumer-facing takeout food and beverage distributors to make at least 10% of their packaging reusable by 2030. In 2023, Germany started requiring all takeout food packaging to be reusable, a landmark move that aims to blaze a trail for reuse models the world over. Germany is also home to a robust reuse ecosystem for bottles, which sees consumers deposit their empty containers into “reverse vending machines” that can reinject waste back into the value circle.
As more European countries follow the lead of Germany and other places that have embraced reuse, like Sweden—in part due to EU-wide rules banning single-use plastics that went into effect in 2021—the continent’s authorities would like to see 80% of all beverage containers and 40% of all food containers be reusable by 2040.
Why is Vytal’s business model the right approach as the reuse economy gains steam?
Vytal operates under an asset-light model; it does not produce any packaging of its own, which helps it keep costs low. It specializes in technology, especially track-and-trace and data analytics for containers, including leveraging machine learning to forecast container needs for each partner in its network. Staying at the bleeding edge of software development can help it maintain a competitive edge as more companies look to take advantage of the opportunities that the reuse economy will open up.
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