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Circle of life

Arthur Parry explores some of the benefits of the Circular Economy and how this approach is helping independent retailers

You will certainly be familiar with recycling, and likely have had some experience of refillable containers (even if it is memories of milk deliveries). Both are examples of elements of the Circular Economy but are not the whole story. Not by a long way.

Some retailers and suppliers within the natural products industry have been utilising the principles of the Circular Economy to great success. With benefits ranging from improved customer interaction to increased financial viability, this business model is increasingly becoming a focus for many forward-thinking brands.

But first, let's start with some basics. What exactly is the Circular Economy? A good starting point is the Ellen MacArthur Foundation, the acknowledged champion for all things circular.

The Foundation lists three basic principles of the Circular Economy:

Each of these principles comes with an implication that Circular Solutions require a systematic approach to design. This means looking at the whole process, and not just one isolated element.

Taking this approach, the first principle invites us to ask questions such as, 'Does this container need both the foil covering and the lid over the top of it?', or perhaps 'Could this product be shipped in bulk and packed on arrival?' In other words it involves looking at all sources of waste and challenging the underlying assumptions.

This same principle also applies to efforts to limit resource consumption. This could include switching to energy from renewable sources or eliminating plastics from virgin sources for products and packaging materials alike.

One example of this is the approach which has been taken by, among others, The Refill Pantry (therefillpantry.co.uk) who have shops in Hertfordshire. They have eliminated consumer packaging for the products they sell, favouring instead a refill system in which their customers bring their own containers to fill in store, thus almost entirely removing one source of waste generation.

Picking up from this last point, it follows logically that the Circular Economy needs to establish and support the systems and infrastructure required to keep those resources in use. This is where the second Circular principle fits.

The process of turning raw materials into usable items involves work – time, money and energy – and in turn this creates the possibility of emissions and waste. We should therefore aim to design a process which minimises the need for this work. Ultimately this creates a hierarchy of circular solutions in which keeping an item in use for as long as possible, without needing to do anything else to it, is typically the best solution. This would also imply that solutions which involve the need for transformation, such as recycling, should ideally be reserved for situations in which no other option is practical.

In this category you find companies such as SESI and Miniml. Both companies supply refillable detergents and cleaning products whereby not only is the consumer packaging reused but also the bulk containers used to deliver the products to store are operated in a closed loop system in which they are returned, cleaned and refilled for the next delivery.

The Reco Store, which has shops in Tiptree and South Woodham Ferrers (recostore.co.uk), works with a number of closed loop suppliers, including SESI. The store's co-founders, Susie Falco and Elise Clitheroe, have even been inspired to set up their own closed loop system. They make their own peanut butter which is sold in glass jars that customers can purchase, use and return to them to be cleaned, refilled and then resold.

Susie and Elise have also inspired some of their suppliers to get on board with the closed loop approach. 'Rollagranola is a small company that supplies us with handmade granola,' says Elise. 'When we first started purchasing from them, the granola was supplied in plastic sacks, so we suggested the idea of doing a closed loop. Now it's supplied in plastic drums which we return for cleaning, refilling and returning.'

Susie adds: 'The company that we buy our muesli from were originally supplying it in big plastic sacks, but they now supply it to us in paper porridge sacks. So they are reusing something that they would have previously put in their recycling and which can be recycled by us after we have finished with it. The closed loop system is at the cornerstone of our business and works very well for us. We are always innovating and always trying to find better ways to reduce waste.'

The final Circular principle takes inspiration from nature. Waste doesn't exist in nature. The by-product of one organism or ecosystem is the food or input for the next. For us this doesn't only mean ensuring that bio-based materials are, for example, compostable, but that they are in fact composted once they are no longer needed and not just leaving this to chance. Taking a systematic design approach to this could mean that, for your reusable bio-based food containers, you put in place a return scheme to collect the containers from your customers and then also partner with the local community garden to ensure that those containers are integrated into the compost to grow more food for the local community.

Going beyond these principles, one of the truly exciting things about working in a Circular Business is the new possibilities it creates for collaboration with those in your network and for further interactions with your customers. The Circular Economy inherently means that you will get to see what happens with the products and materials coming from your business as they will physically come back to you in one form or another. This brings with it the possibility of providing valuable information to your partners and suppliers regarding, for example, customer behaviours, failure modes and other such data points which can be hard to get in a more traditional linear model. This information can become a source of value in itself.

Similarly, the fact that you are operating in a circle will mean that you introduce new interactions with your customers. These new interactions give the opportunity to build more meaningful relationships with your customers, to better understand their needs and to be able to develop solutions to address those needs.

With this you also have a business model with a much higher chance of repeat purchase and loyalty. This works to increase the future financial viability of the brand. You will retain a conversation with customers present, past and potential – meaning that you are addressing one of the fundamental issues with brand recall – mental availability. You are 'always on'.

Now that you are a little more familiar with the principles of the Circular Economy you have seen how these can be utilised to help deliver a more sustainable future through a new way of doing business. This approach can also begin to transform the way we all think about the importance of the maintenance of value in nurturing the ecosystems in which we all operate!

Arthur Parry is an Independent Consultant in Sustainability Strategy and the Circular Economy, and an Ambassador for the Solar Impulse Foundation ((solarimpulse.com)). He is also an Advisor at Products of Change (www.productsofchange.com/advisors) and the Sustainability Scrutineer at JUST ONE Tree (www.justonetree.life).

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