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According to a new Rabobank report, returnable, refillable bottles are not only the most sustainable packaging solution. As packaging costs rise, they could also become the most economical.
“Sustained cost increases for packaging could push beverage companies to consider more drastic operational overhauls. And no change would be more drastic – and arguably more impactful – than the adoption of returnable packaging systems,” says Bourcard Nesin, Analyst – Beverages at Rabobank.
Returnable, refillable packaging was once the norm around the world, but its use has been declining rapidly for decades. Over the past 40 years, as manufacturers have prioritised scale and efficiency at the source of production, they’ve abandoned returnable packaging for one-way packaging that allows for larger, more centralised production and distribution.
Most research on the subject indicates switching to returnables could reduce the greenhouse gas emissions of glass packaging by 80 per cent. The change could have a major impact on the cost of goods sold as well.
“This, in turn, makes beverages that utilise returnable packaging more affordable, which will be a major competitive advantage as inflation chips away at consumers’ purchasing power and price elasticities start to rise,” explains Nesin.
Many markets across Latin America, Africa, and Asia still have much of the infrastructure needed for large-scale returnable packaging systems, making them a perfect target for industry investment and resources. Even in markets that have only recently abandoned the practice, consumers are already familiar and comfortable with deposit and return schemes.
“It’s far more cost effective to protect those returnable systems that have not yet been destroyed than to build a new one from scratch,” highlighted Nesin.
According to Rabobank’s report, some key steps and conditions are needed to support the broader rollout of returnable packaging:
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