“Circular economy” is the sustainability buzzword of the last century. Many eco-conscious brands utilize this principle to produce wares in a more sustainable way - some of them very successfully. 

But what exactly is the circular economy and how can you implement it for your brand and products in a way that is both successful and gets you closer to your goals of being environmentally friendly? 

Read on to explore the answers to these questions. 

What is a Circular Economy?

The circular economy is a model of production and consumption in which existing materials and products are shared, leased, reused, repaired, reconditioned, and recycled for as long and as often as possible to extend product life cycles. 

This reduces waste to a minimum. Once a product has reached the end of its life cycle, its resources and materials remain in the economy as much as possible, used again and again, to continue generating added value.

The circular economy stands in contrast to the traditional, linear economic model (throw-away society), which relies on large quantities of cheap, accessible materials and energy. 

The Benefits of Circular Economy

The transition to a circular economy brings benefits such as:

• less pressure on the environment,

• increased security of raw materials supply,

• increasing competitiveness,

• innovation, growth, and employment.

Consumers benefit from more durable and innovative products, leading to cost savings and a better quality of life.

The circular economy often takes the so-called 3-R approach when it comes to resources and materials: 

• Reduce (minimize the use of raw materials)

• Reuse (maximize the reuse of products and components)

• Recycle (high-quality reuse of raw materials)

People often equate circular economy with recycling, but the two aren’t the same; rather, recycling is part of the larger concept of circular economy. 

3 Examples of Circular Economy in Use

Many consumers are striving to live a more sustainable, eco-friendly lifestyle. Brands and suppliers have to make changes in the way they do things to meet that growing demand. Consumer companies often start with their own operations to implement sustainable processes. The largest opportunities for improvement, however, can be found in supply chains. They account for 80 per cent of a consumer business’s greenhouse-gas emissions and more than 90 per cent of its impact on air, land, water, and biodiversity.

McKinsey found that most of the environmental impact associated with the consumer sector is embedded in supply chains.

Therefore, it’s crucial to identify sustainability challenges along the entire supply chain. Let’s have a look at how some industries and companies tackle circular economy.

The New Plastics Economy - a 2016 Report

We can’t talk about circular economy without mentioning plastics, one of the greatest pollutants of our time. We’ve all seen the photos of rivers flooded and beaches strewn with plastic waste, of birds and turtles caught in pieces of plastic; and we all know that plastic takes hundreds, if not thousands, of years to break down - meanwhile, we’re consuming microplastics that have made their way up the ocean’s food chain from ground-dwelling sea creatures to the fish and seafood we eat. 

Today, 95% of plastic packaging material value, around USD 80-120 billion annually, is lost to the economy after a short first use. More than 40 years after the launch of the first universal recycling symbol, only 14 % of plastic packaging is collected for recycling. 

That’s why Project MainStream was brought to life: an initiative that leverages the convening power of the World Economic Forum, the circular economy innovation capabilities of the Ellen MacArthur Foundation, and the analytical capabilities of McKinsey & Company. In 2016, they created a report called The New Plastics Economy, which “outlines a fundamental rethink for plastic packaging and plastics in general; it offers a new approach with the potential to transform global plastic packaging materials flows and thereby usher in the New Plastics Economy.”

The New Plastics Economy’s overarching vision is that plastics never become waste, but instead re-enter the economy as valuable technical or biological nutrients. To achieve this, the report states the following ambitions: 

1. Creating an effective after-use plastics economy

2. Drastically reducing the leakage of plastics into natural systems 

3. Decoupling plastics from fossil feedstocks

The report is mostly focused on the grander scale of industries and economies, but eco-conscious brands can implement many of the suggested changes in their own operations, as well as seek them out in every step of their supply chain. 

Read the full report here. 

Danone and Circular Economy in Food

Popular French company Danone has always strived for sustainability and environmentally conscious practices. To embed the principles of the circular economy in its operations, Danone has started managing its three key resources - water, milk, and plastic - as cycles rather than as conventional linear supply chains.

An example of this lies in their Greek yogurt. The production of Greek yogurt entails a straining technology to extract acid whey. Instead of treating this extract as waste, Danone is testing technological solutions in several countries, working with different partners, to find ways to use whey as a resource. 

Danone has already started using whey protein in their Early Life Nutrition sector, and will soon be utilizing it to produce animal feed, fertilizers, and even energy. 

From Waste Streams to Income Streams

Today, turning garbage into gold is no longer a pipe dream - with the right approach. 

Electronic scrap, for instance, yields more gold than gold ore. Waste pickers can earn money by collecting and selling used PET-bottles. And if used garments were sold at secondary-market prices, every metric ton of used clothing could comfortably outweigh the cost required to collect and sort it. 

Yet the value in many waste flows isn’t captured.

The key to success for waste-management systems is the ability to 

• aggregate waste flows into meaningful volumes, 

• develop businesses around them, and 

• organize the supply chain professionally at high levels of operational efficiency, and environmental and societal effectiveness.

The most successful and sustainable waste-management programs share a number of common elements:

• Cash-back reliability

• Transparency

• Management on an industrial level

• Planning ahead to enhance value creation

Consumer brands intent on implementing a circular economy can either find ways to turn their waste into gold or team up with businesses already doing just that. 

Let’s have a closer look at one of these businesses now. 

How Soop Upcycles Organic Waste Streams

In the Netherlands, the consumption of fresh orange juice yields 250 million kilos of orange peels each year. In 2016, Soop-founder Robert-Willem Dol wanted to find solutions to upcycle these orange peels as resources instead of discarding them as waste. Today, Soop offers a range of soap products based not only on orange peel and orange oil, but also on used coffee grounds, which also make for great natural scrubs, color, and exfoliants in soaps. 

Soop works with its ambassadors, including the municipality of Amsterdam and the Dutch Entrepreneurial Development Bank, to collect orange peels and coffee grounds and turn them into body care products in the most sustainable ways possible. 

But how does that translate to consumer brands working with Soop to join the circular economy?

Let’s say you’re a brand that sells fresh, organic orange juice at the weekly market and the health sections of local grocery stores in your area. Your brand is big enough that you no longer press the oranges yourself, but are sourcing the juice through an external supplier. 

Because the unique selling point of your juice is its freshness and organic nature, you know exactly where the oranges are sourced and your supplier’s process of pressing them into the juice. You could therefore easily come to an agreement with Soop and your supplier to make sure that the unused orange peel is upcycled into soaps - et voilà, you’ve integrated circular economy in your product via Soop. 

Supply Chain and Circular Economy

Implementing a circular economy in your brand’s supply chain is a great way to make your products and organization more sustainable and eco-friendly. But it’s not always easy; understanding every step of your supply chain is outside of most consumer brands’ control. 

Brands have to make an additional effort to get information from all entities along their supply chain (material suppliers, logistics providers, and manufacturers), to understand how materials are sourced and products made. The same goes for implementing circular economy measures in that supply chain. 

Supply-Chain management (SCM) software supports your supply chain’s transparency - but it’s only as good as the information it’s fed with. 

This is where Bomler comes into play. It provides a platform for brands to bring more transparency into their supply chain, for consumers to gain insight into that supply chain, and for suppliers and manufacturers to offer their eco-friendly and sustainably produced goods to brands. 

Bomler closes the gap between buyer expectations regarding supply chain transparency and a brand’s capabilities in providing it. We make it easy for you to offer transparency to your customers, and to keep track of it within your own organization.

Register here for your free to add transparency to your supply chain and to start showing that transparency to your consumers right now.