Is the Consumer Appetite There for a Circular Economy?

Orderly
July 21, 2020

As you tuck into a sandwich on a lunch break, you might not give much thought to the waste behind it. After all, you’re pretty hungry, that avocado is delicious — and hey, you’re going to recycle the wrapper it came in (we hope!).

As it stands, consumers are the last in a cycle of food production in a currently linear economy. We source, eat, and dispose of waste — take, make and dispose.

We’re not blind to the matters of the environment and that we only have finite precious resources and this leads consumers to believe that efficient use or reduced use is a solution — perhaps the only one.

But is this the case? And could instead a circular economy supported by the right technology be the next move towards replenishing raw materials and safeguarding our future?

What is the circular economy?

At present, we work on a linear economy model, where manufacturing creates products, services and items that are owned or consumers — and then create various levels of waste. Not only is the extraction of raw materials at an excessive rate an obvious issue, but also the associated air, land and sea pollution issues after consumption or use.

We’ve all been horrified by the plastic in the sea that threatens to outnumber marine life — but how can consumers feel they have a greater impact beyond carrying a reusable straw or taking out their red recycling bin?

A circular economy could be the key, and the concept is gaining traction as new technology delivers insights we have never been privy to before.

A circular economy puts the consumer into the chain as prominently as the manufacturers and suppliers. Instead of a passive delivery system whereby a consumer shoulders a chunk of the burden of the environmental drain, with the circular economy we have the aim that all biological materials can flow back into use and, supported through processes and legislation.

(This isn’t to say that the circular economy is about recycling. It’s about finding more economic value from each item we use or consume. It’s a huge systemic change that focuses on each end — product and consumption, and wraps them up into a circle.)

You might have also heard of the concept of eco design — where we decide to shift and use materials in the best way possible — as well as retrieving raw materials from the products we already have.

How food slots in

This is easy to see in terms of physical products or even services such as energy — but how does that relate to food?

After all, textiles can be reused and sent back to a manufacturer. But how does an avocado sandwich tie in?

If you had a separate collection for household waste that was processed to generate biogas and return nutrients to the agricultural soils and if all EU countries followed Italy’s strong suit of compost production in this manner, this could generate the equivalent to $1.5 billion for municipalities and investors. Returning nutrients to the soil enhance the value of the land and the soil, and is real regeneration.

What if the avocado sandwich was only available because it was smart and efficient to do so?

Smart technology is making it possible for a holistic view of all systems involved in manufacturing, marketing and back end operations. This means that waste can be spotted before it even becomes waste — allowing businesses to reduce the chance of waste by promoting end of line items.

And how about how it reached you? There are also areas such as localised manufacturing and reduced ineffectiveness in transportation, harvest and packaging. Smart businesses are already using promotional forecasting tools which start optimising transportation efficiencies so only the most efficient routes and drops are used, with optimal loading of delivery trucks.

McKinsey looked into the area of FMCG in the circular economy and showed there could be a value of a trillion dollars versus a linear economy — and as mentioned, there are some serious ethical and environmental wins as well. So why aren’t we changing?

Are consumers ready?

Businesses are already on board in many ways and seeing the benefits, whether that’s increases in sales, stronger forecasting abilities and reducing the need to write off stock. Carbon labelling is highlighting issues to consumers before they buy.

Extended food life and reduced packaging waste are just the tip of the iceberg. We know that consumers want brands to be more ethical and that this stuff matters, But where is the tipping point?

The issue in mass change may be consumers themselves. Whilst the opportunity is here globally to shift and see benefits — and the tech is ready to drive us towards a more intelligent use of our resources for both long-term sustainability and economic value, our food system needs to be transformed and consumers may be affected with a new way of life.

Our waistlines are expanding, yet our fridges are never empty. In medium and high-income countries, much of our food is simply thrown away. The average US family throw away half the food they buy — worth $164 billion.

This wealth of choice and freedom is a liberty, but also a ticking time bomb and one that needs to be addressed at speed. Government and health authorities, producers and consumers all need to come together to work together to make and eat food differently.

At the moment this is an almost silent, imperceptible technology and manufacturing change, but with consumer activism and perhaps a sudden change, how we eat is set to change.