Do shoppers have the loot for Loop?

The deposits for Tesco’s new packaging may be hard to swallow but the reuse revival is well underway. By David Burrows.

Customers at Tesco can now buy 88 products in prefilled, reusable containers, which are returned, cleaned and then refilled. The trial, initially in 10 stores, is being run in partnership with reuse platform Loop. “There is a market for this,” said the retailer’s CEO Ken Murphy during a launch event last week, as he explained how shoppers switching just three products – ketchup, cola and washing-up liquid – would result in 2.5 million uses and reuses of the new packaging. The environmental benefits are potentially “enormous”.

But so too are the costs. Though a deposit starts at just 20p, for some products it can be as high as £3. The average is £1.60. “The system relies on customers returning the item,” a spokesman explained in an email to Footprint. “For this reusable system to work, we have to try to make sure the packaging is returned. We have tried to strike a balance: pricing the deposit to encourage more customers to use Loop, but also to make sure the packaging is returned and reused.”

It’s a fair point. Tesco has scoured the earth trying to find the perfect packaging for each product and it doesn’t come cheap. But will those strapped for cash really want to stump up so much for sustainable shopping? Giles Bolton, responsible sourcing director at Tesco, said this can’t be a model that only works for “higher end” customers and that the prices for the products inside are comparable to those sold in single-use packaging.

Part of the problem is scale. Tesco is running the trial using both own brand and branded goods (from Unilever, BrewDog, Heinz and others). Scaling it up will require capital investment and changes to production lines – reuse is “disruptive” to the way the food industry works, said Murphy. But as more suppliers and retailers become involved, the easier it all becomes (Tesco’s Loop packaging can be dropped off at certain McDonald’s stores, for example, with the fast food chain starting a deposit and return trial for cups in July). Scale also means that prices fall, explained Loop CEO Tom Szaky.

The other issue is that the cost of disposable grocery packaging is not visible. Research by Zero Waste Scotland in 2019 showed the hidden costs of single-use packaging in grocery shopping equated to almost £250, or 7% of the average household’s annual grocery bill. “If consumers were more aware of the unseen cost of grocery packaging, would there be more demand for reusable packaging, and packaging-free alternatives?” the authors wondered.

Some, but not all, of the products in Tesco’s trial are in fact cheaper. For example, 500g of Tesco fusilli pasta costs 53p in single-use plastic, but 45p in the new reusable container. The deposit is £3. Salad topper seeds are 4p less per 100g. So, for those able to pay the deposit (and confident they will remember to keep bringing it back) there are savings to be had. But customers don’t necessarily know that.

This is perhaps where Tesco has also missed a trick: because it has placed all the prefill products in one dedicated area of the store rather than alongside their counterparts in single-use packaging. The former is easier logistically but the latter could well improve take-up if shoppers see the money they are saving (some will also be attracted by the better-looking reusable options).

Reusable packaging then becomes part of the general make-up of the store and the shopping experience. Asda, which is running reuse trials of its own at price parity with single-use alternatives, has admitted that the refill areas can be “a bit intimidating”, especially for older customers. Awareness, visibility and clarity of the product’s benefits all need to be better communicated, the supermarket’s senior director for commercial sustainability Susan Thomas told The Grocer last year.

In these times of covid-19, the safety of the new system must also be bulletproof. Indeed, Tesco couldn’t resist a veiled dig at counterparts like Morrisons that encourage customers to bring their own containers. The Loop is “absolutely top grade” industrial cleaning, said Bolton.

Purveyors of single-use plastic, in particular, have certainly played the ‘single-use is safer’ card regularly in the past 18 months. At the start of the pandemic, Tesco actually said the trend to avoid single-use packaging had gone into reverse due to customer concerns over hygiene. If nothing else, its rollout of Loop in-store is a sign that supermarkets are keen to pick up the pace on reusable packaging. For those who feared the pandemic would kill off this movement, that news is priceless.

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