THE GLOBAL CIRCULAR ECONOMY: THE IMPACT OF
“REDUCE, RE-USE, RECYCLE” ON CONSUMER MARKETS
December 2016
INTRODUCTION
KEY FINDINGS
WHAT IS THE CIRCULAR ECONOMY?
CONSUMER ATTITUDES
KEY INDUSTRIES: FASHION
KEY INDUSTRIES: APPLIANCES AND
ELECTRONICS
KEY INDUSTRIES: FOOD AND DRINK
CONCLUSIONS AND RECOMMENDATIONS
METHODOLOGY AND DEFINITIONS
INTRODUCTION
The New Consumerism
 Today’s consumers are
redefining their values
and priorities, leading to
the birth of a new
consumerism. This new
consumerism unites
many of the key
consumer trends of our
time, and these trends
share many of the same
drivers.
 This report on The
Global Circular Economy
forms part of a
Euromonitor
International series on
The New Consumerism.
The trend has an impact
across a multitude of
industry sectors, and has
the power to transform
even established
markets.
© Euromonitor International
THE GLOBAL CIRCULAR ECONOMY: THE IMPACT OF “REDUCE, RE-USE, RECYCLE” ON CONSUMER
MARKETS
PASSPORT 3
INTRODUCTION
Scope
Disclaimer
Reduce
Re-use
Recycle
Fashion and apparel
© Euromonitor International
Appliances and
electronics
Food and drink
Much of the information in this
briefing is of a statistical nature and,
while every attempt has been made
to ensure accuracy and reliability,
Euromonitor International cannot be
held responsible for omissions or
errors.
Figures in tables and analyses are
calculated from unrounded data and
may not sum. Analyses found in the
briefings may not totally reflect the
companies’ opinions, reader
discretion is advised.
At current rates, we are using
resources at more than 1.5 times
the rate nature can replace
them. Scarcity of resources,
volatility of pricing and
environmental damage are
driving a shift to a circular
economy which minimises
wastage and aims to re-use or
recycle all end products.
Embracing this concept can
help manufacturers not only
control costs but also create
points of differentiation, and
appeal to a consumer base that
cares about buying sustainable
goods.
THE GLOBAL CIRCULAR ECONOMY: THE IMPACT OF “REDUCE, RE-USE, RECYCLE” ON CONSUMER
MARKETS
PASSPORT 4
INTRODUCTION
KEY FINDINGS
WHAT IS THE CIRCULAR ECONOMY?
CONSUMER ATTITUDES
KEY INDUSTRIES: FASHION
KEY INDUSTRIES: APPLIANCES AND
ELECTRONICS
KEY INDUSTRIES: FOOD AND DRINK
CONCLUSIONS AND RECOMMENDATIONS
METHODOLOGY AND DEFINITIONS
KEY FINDINGS
Key findings
From linear to circular
As the world consumes more resources than it can produce, there is an impetus
to push away from a linear economy based on a make/use/dispose model, and
towards a circular economy based on a reduce/re-use/recycle model that
focuses on minimising waste and recycling or re-using all end products.
The need to control costs For manufacturers, there are significant benefits to this approach beyond saving
the planet. Resource volatility leads to an unpredictable raw materials flow,
volatile costs and changes in regulation. Reducing dependence on these raw
materials helps manufacturers control their costs and operations.
Circular strategies as key However, reducing risk is not the only reason to pursue a more sustainable
differentiator
approach. Looking at a circular strategy allows for the generation of innovative
ideas that serve as strong differentiating points and marketing tools.
Consumers keen to
support sustainability
Furthermore, sustainability is important to a large number of consumers
worldwide who are keen to embrace companies and brands which uphold such
values.
Fashion at the vanguard
Fashion is a key area, due to the very rapid turnover of items, and due to the
interest in re-use and repair as a fashion statement.
Electricals shift to lease or Appliances and electronics are also key due to heavy use of insecure resources
repair models
and short lifecycles, with leasing schemes and repair/resale coming to the fore.
Tackling food and drink
waste
© Euromonitor International
Food waste and food packaging waste are also key areas, with many
companies in Europe particularly active in working to reduce food waste.
THE GLOBAL CIRCULAR ECONOMY: THE IMPACT OF “REDUCE, RE-USE, RECYCLE” ON CONSUMER
MARKETS
PASSPORT 6
INTRODUCTION
KEY FINDINGS
WHAT IS THE CIRCULAR ECONOMY?
CONSUMER ATTITUDES
KEY INDUSTRIES: FASHION
KEY INDUSTRIES: APPLIANCES AND
ELECTRONICS
KEY INDUSTRIES: FOOD AND DRINK
CONCLUSIONS AND RECOMMENDATIONS
METHODOLOGY AND DEFINITIONS
WHAT IS THE CIRCULAR ECONOMY?
From a linear economy to a circular economy
 In the traditional linear economy, the flow of
resources is finite, going from raw materials to
factory to user to landfill. Given the strain on the
world’s natural resources, this is an unsustainable
model.
Linear Economy
Make
Use
Circular Economy
Reduce
Re-use
Recycle
© Euromonitor International
Dispose
 The circular economy aims to address the issue of
limited resources by eliminating or significantly
reducing wastage, with all end materials re-used or
recycled. It keeps resources in use for as long as
possible, extracts the maximum value from them
whilst in use, then recovers and regenerates
products and materials at the end of each service
life.
 Products must be designed for longevity, make use
of recycled components, and incorporate ease of
maintenance and re-use throughout the value chain.
 This helps to address issues of resource
scarcity/security, reduces the environmental impact
of consumption, and can also deliver cost savings for
manufacturers, while tapping into consumer demand
for more environmentally friendly products and
services.
THE GLOBAL CIRCULAR ECONOMY: THE IMPACT OF “REDUCE, RE-USE, RECYCLE” ON CONSUMER
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PASSPORT 8
WHAT IS THE CIRCULAR ECONOMY?
Rising waste levels across Europe
‘000 tonnes
Waste Generated by Sector in Western Europe 2010/2015
1,600,000
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
Agriculture,
forestry, fishing
Mining and
quarrying
Manufacturing Electricity, gas,
steam, a/c
2010
Water,
sewerage,
waste
Construction
Services
Households
2015
Waste Generated by Sector in Eastern Europe 2012/2015
600,000
‘000 tonnes
500,000
400,000
300,000
200,000
100,000
0
Agriculture,
forestry, fishing
Mining and
quarrying
Manufacturing
Electricity, gas,
Water,
steam, a/c
sewerage, waste
2012
© Euromonitor International
Construction
Services
Households
2015
THE GLOBAL CIRCULAR ECONOMY: THE IMPACT OF “REDUCE, RE-USE, RECYCLE” ON CONSUMER
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PASSPORT 9
WHAT IS THE CIRCULAR ECONOMY?
Case study: Scotland works to align business and environment
 Scotland’s new circular economy strategy is an example of how
change can work at government level to both incentivise business
and protect the environment.
 The public consultation “Making Things Last: Creating a More
Circular Economy in Scotland”, was published in 2015, through
close collaboration between the government and a number of
business and environment agencies. The key elements of the
strategy are:
 To develop a more comprehensive approach to producer
responsibility through a single framework for all product types
that drives choices for re-use, repair and remanufacture, while
addressing the costs of recycling and disposal.
 To reduce all food waste by 33% by 2025.
Priority areas
 Food, drink, and the broader bioeconomy: the beer, whisky and fish
industries could reduce costs by
GBP500-800 million a year by taking
a more circular approach.
 Remanufacture: contributes
GBP1.1 billion a year to Scottish
GDP and could contribute GBP1.7
billion a year by 2020.
 Construction and the built
environment: generates around half
of all waste produced in Scotland, so
has a significant opportunity to
increase resource efficiency.
 Energy infrastructure: significant
potential to re-use equipment from
decommissioned oil, gas and
renewables infrastructure (GBP30-35
billion is expected to be spent on oil
and gas decommissioning by 2040).
© Euromonitor International
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MARKETS
WHAT IS THE CIRCULAR ECONOMY?
What is driving the move to a circular economy?
Supply risks: Resource scarcity is a risk and a potential cost for all manufacturing businesses.
Managing this risk with efficient use of resources is critical.
Sustainability: Resource security also needs to be managed from an environmental
point of view, as well as cost control considerations.
Regulation: Governments are moving to protect scarce resources via additional
costs/taxation on use, moving resource management further up the agenda
Cost savings: The reduction of raw material costs, at a time where many resource
costs are spiralling, is a key motivator for businesses.
Innovation: USPs such as lease formats, re-using, upcycling and incentives for recycling
can serve well to differentiate a business.
Consumer demand: Environmental awareness is high on consumers’ agendas, and
awareness of issues regarding waste and resource scarcity is rising.
© Euromonitor International
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WHAT IS THE CIRCULAR ECONOMY?
Protecting resources protects the bottom line
 Raw material scarcity is an issue which impacts the environment and
also business bottom lines, as scarcity pushes up prices, introduces
volatility and encourages governments to restrict resource use via
regulation and disincentive.
 A wide range of raw materials and resources are under severe threat,
notably water, metals and minerals. A 2011 Price Waterhouse
Coopers report, Minerals and Metals Scarcity in Manufacturing: The
Ticking Time Bomb, found “In Europe, almost 80% of senior
executives from global manufacturing companies cite mineral and
metals scarcity as a pressing issue.”
“Today humanity uses the
equivalent of 1.6 planets to
provide the resources we use and
absorb our waste. Moderate UN
scenarios suggest that if current
population and consumption
trends continue, by the 2030s, we
will need the equivalent of two
Earths to support us”
Global Footprint Network
 In the UK, Defra calculates that UK businesses could benefit by up to
GBP23 billion per year through low cost or no cost improvements in
the efficient use of resources, whilst McKinsey estimates that the
global value of resource efficiency could eventually reach USD3.7
trillion per year.
 These approaches also help to protect the environment and to garner
support from consumers and media groups which are concerned
about environmental issues.
© Euromonitor International
100
Billion tonnes
 Circular and sustainable approaches to raw materials reduce a
company’s dependence on a steady supply of resources, and reduce
their vulnerability to price fluctuations and changing regulations by
turning waste into a resource.
Global Domestic
Extraction of Natural
Resources 2010-2015
80
60
40
20
0
2010 2011 2012 2013 2014 2015
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WHAT IS THE CIRCULAR ECONOMY?
Gaining business advantage through circular innovation
 Taking a circular approach does not only help hedge a company’s
risk against scarcity of resources, it can also help create a distinctive
USP which can help a company differentiate itself from its competitors
and, in particular, to target an environmentally aware consumer base.
 Many companies that have succeeded in the circular economy have
done so not by playing down the second hand/re-used nature of their
products, but by leveraging this as a virtue. This is particularly the
case in fashion, where the vintage angle can be used in a very
positive light.
Mud Jeans uses the back
story of its pre-used jeans
as a selling point, asking
previous users to write
about the history of the
jeans and placing this
alongside the jeans as a
marketing tool.
© Euromonitor International
DELL resells its own
products
MUD JEANS achieves a
strong fashion/vintage
positioning by leasing
jeans
PATAGONIA has tripled
its profits through an
anti-consumerism
marketing message and
focus on re-use and
repair
HOME DEPOT has
started to rent tools to
those reluctant to buy
RENAULT has had
success with its Dacia
range of low cost cars,
showcasing pared back
design as a selling point
THE GLOBAL CIRCULAR ECONOMY: THE IMPACT OF “REDUCE, RE-USE, RECYCLE” ON CONSUMER PASSPORT 13
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WHAT IS THE CIRCULAR ECONOMY?
Leveraging consumer trends: particularly millennials
 Issues around the environment are high on the agenda for many
consumers. Although millennials do not show any greater tendency
towards environmental issues than other age groups, they do show a
greater tendency to express their interest in sustainability through
supporting brands that are committed to positive social and
environmental impact. As such, a strong stance on the circular
economy can be an effective way to target this group.
 This is also a group that rejects conspicuous ownership of goods, and
is open to prioritising experience over material gain. Jamie Gutfreund
of brand consultancy Deep Focus has been quoted as dubbing
millennials as “nowners”. This makes them a strong target for goods
which are re-used, second hand or leased.
According to a 2014 study
by Nielsen, millennials are
more responsive to
sustainability actions than
other age groups, with 51%
of consumers willing to pay
extra for sustainable
products and 51% of those
who check the packaging
for sustainable labelling
belonging to this cohort.
The study also found that
in Asia Pacific and the
Global research by MSL Group found that 68% of millennials want
Middle East and Africa,
brands to be more active in global problems, and 74% would be
millennials are much more
proud to be associated with a brand that they perceive as doing the
likely than their elders to
support sustainability
right thing.
actions.
© Euromonitor International
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MARKETS
INTRODUCTION
KEY FINDINGS
WHAT IS THE CIRCULAR ECONOMY?
CONSUMER ATTITUDES
KEY INDUSTRIES: FASHION
KEY INDUSTRIES: APPLIANCES AND
ELECTRONICS
KEY INDUSTRIES: FOOD AND DRINK
CONCLUSIONS AND RECOMMENDATIONS
METHODOLOGY AND DEFINITIONS
CONSUMER ATTITUDES
Green issues are important to consumers
“I try to have a positive effect on the environment through
my actions” by country 2016
35
30
“I try to have a positive
effect on the
environment through my
actions” by age
60+
45-59
30-44
% strongly agreeing
25
15-29
0
20
10
20
% strongly agreeing
2015
15
10
5
0
2016
“I try to have a positive
effect on the
environment through my
actions” by gender
Female
Male
14
16
18
20
% strongly agreeing
2015
© Euromonitor International
30
22
2016
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CONSUMER ATTITUDES
Recyclability is the most credible of eco claims
Understanding of and Trust in Labels 2016
Recyclable
Natural
Locally sourced
Environmentally conscious or eco-friendly
Organic
No artificial ingredients
Sustainably produced
Free range
Non-GMO
Supports a charity or a charitable cause
Fair trade
Halal/kosher
0%
10%
20%
Trustworthy
© Euromonitor International
30%
Neutral
40%
50%
60%
70%
80%
90%
100%
Not trustworthy
THE GLOBAL CIRCULAR ECONOMY: THE IMPACT OF “REDUCE, RE-USE, RECYCLE” ON CONSUMER PASSPORT 17
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CONSUMER ATTITUDES
Brazil, Turkey, Italy show greatest trust in “recyclable” labels
Trust in “Recyclable” Labels by Country 2016
80
70
% considering it trustworthy
60
50
40
30
20
10
0
© Euromonitor International
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CONSUMER ATTITUDES
Consumer push to upcycling, creating and repairing
 Linked to the desire for more authentic, environmentally products is the rise of the “make do and mend”
mentality, with consumers creating, upcycling and repairing their possessions.
 The internet has played a strong role in this, allowing consumers to get and share inspiration on home craft
projects via sites such as Pinterest, and to sell their creations on sites such as Etsy. Homecrafting and
upcycling has become a fashionable hobby, and this has played a part in opening up minds to the concept
of re-use and repair.
 This ties into trends towards sustainability, frugality and fashion/originality. Many consumers, particularly
millennials, are inclined towards minimalism and a conspicuous anti materialism. Re-using, recycling and
charity appeal not only to their frugality but also to their concerns about the environment and social justice.
 This also reflects a rise in conspicuous anti-materialism among some consumers, with a focus on
minimalism being a badge of status in itself. In many markets, the sharing economy is emerging, with
millennials typically active here. Re-using, recycling and charity appeal to their frugality but also to their
concerns about the environment and social justice. Frugality – as embodied by the “frugalista” – has
acquired its own fashion status among many.
Some brands are working with these
trends in order to boost their profile.
Patagonia, for example, encourages
consumers to post their repaired outdoor
gear on Instagram.
© Euromonitor International
THE GLOBAL CIRCULAR ECONOMY: THE IMPACT OF “REDUCE, RE-USE, RECYCLE” ON CONSUMER PASSPORT 19
MARKETS
INTRODUCTION
KEY FINDINGS
WHAT IS THE CIRCULAR ECONOMY?
CONSUMER ATTITUDES
KEY INDUSTRIES: FASHION
KEY INDUSTRIES: APPLIANCES AND
ELECTRONICS
KEY INDUSTRIES: FOOD AND DRINK
CONCLUSIONS AND RECOMMENDATIONS
METHODOLOGY AND DEFINITIONS
KEY INDUSTRIES: FASHION
The problem with fashion
 Issues of waste and sustainability are high on the agenda
for fashion, with the trend for fast fashion creating high
turnovers of fashion items and a significant amount of
waste. Forecast sales for apparel indicate increasing
units purchased per capita in almost all regions, including
North America and Western Europe, where purchase
levels are already very high.
In the US, 85% of discarded textiles end up in
landfill
(Environmental Protection Agency)
In the UK, 350,000 tonnes of used clothing
worth around GBP140 million goes to landfill
every year (WRAP)
Total Sales of Apparel per Capita
2015/2020
Closing the loop
 H&M (“Don’t Let Fashion Go to Waste”), North Face
(“Clothes the Loop”) and Puma (“Bring me Back”) all offer
this service via a contract with I:CO (I:Collect), a Swissbased company that collects, sorts and recycles clothing.
In some cases, consumers are encouraged by rewards
such as discounts on future purchases.
 Use of recycled material is also increasing, with both
H&M and Levi’s experimenting with part recycled denim,
although most recycled clothing is instead downcycled
due to quality issues.
© Euromonitor International
60
50
Units per capita
 Fashion companies are working to address this, with
even mainstream high street chains having wellestablished clothing take back programmes that
encourage customers to return old clothes to be recycled.
40
30
20
10
0
2015
2020
THE GLOBAL CIRCULAR ECONOMY: THE IMPACT OF “REDUCE, RE-USE, RECYCLE” ON CONSUMER PASSPORT 21
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KEY INDUSTRIES: FASHION
Consumers rank sustainability as number one eco choice in clothes
% answering “sustainability”
Which Green Attributes Would You be
Willing to Pay More for When Buying
Clothing or Footwear? 2013
Sustainably produced
Organic
Which Green Attributes Would You be
Willing to Pay More for When Buying
Clothing or Footwear? by Country 2013
70
60
50
40
30
20
10
0
Natural
Fair trade
 Sustainability is at the top of the eco concerns for
consumers globally when it comes to fashion.
 Sustainable production scores highest in Brazil
and Russia, and is the leading green attribute in
Brazil, China and Germany.
Supports local communities
Locally sourced/manufactured
None of the above
0
© Euromonitor International
20
40
% respondents
60
 It also ranks in the top three in France, India and
the UK. It is not such a high priority in Japan,
where supporting local communities and locally
sourced/manufactured are joint top; nor is it ranked
highly in US, where natural and local win out.
THE GLOBAL CIRCULAR ECONOMY: THE IMPACT OF “REDUCE, RE-USE, RECYCLE” ON CONSUMER PASSPORT 22
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KEY INDUSTRIES: FASHION
Patagonia: Leading the trek
 Patagonia has long been at the
forefront of re-using, repairing and
recycling its products, notably with its
2011 “Don’t Buy This Jacket” ad
campaign, asking customers to think
twice about whether they needed a
new jacket. It followed this in 2013
with its “Better Than New” campaign,
which championed the reselling of
well-used Patagonia clothing.
 In 2016, Patagonia continues this
with its Worn Wear Instagram feed,
encouraging consumers to show off
their outdoor wear that has been
repaired, using both the #wornwear
and #betterthannew hashtags.
 This strategy of discouraging
excessive purchasing has had the
seemingly counterintuitive effect of
improving financial performance in
recent years, with profits reported to
have tripled in the past three years.
© Euromonitor International
 The Worn Wear Programme includes guides for repairing
Patagonia clothing, encouragement to make items last longer, and
facilitation of re-use. The company has the largest garment repair
facility in North America.
 The system also allows for sales of gently used and repaired
second hand clothing at a discounted price. It operates a recycling
programme for all its clothing, taking back all garments for recycling
or repurposing.
THE GLOBAL CIRCULAR ECONOMY: THE IMPACT OF “REDUCE, RE-USE, RECYCLE” ON CONSUMER PASSPORT 23
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KEY INDUSTRIES: FASHION
Mud Jeans: Circular denim
 Mud Jeans, a Netherlands-based company, offers jeans
leasing, as well as standard purchasing. Consumers can lease
jeans for EUR5 a month, and then after one year they can swap
them for a new pair and continue the lease agreement for
another year, pay for four extra months (after which the user can
wear them as long as they like) or return the jeans for repair or
recycling.
 The lease agreement includes free repairs, and if the customer
chooses to keep the jeans they are financially incentivised to
return them eventually for recycling.
 Recovered jeans take one of three pathways. Good condition
products are cleaned and re-used. Damaged products are
repaired. Products that are beyond repair are returned to the
manufacturer to be recycled.
“We have a desire for something new, but  This business model reduces the company’s supply chain
vulnerability to price fluctuations, which is critical given the
we certainly don’t need something new
volatility of cotton prices, while also reducing the environmental
every two weeks. Here’s a business
impact on cotton crops.
model that’s trying to wean itself away
from that, and I think that’s a good thing.”  Mud Jeans are made with 30% recycled content and 70%
organic cotton.
Lynda Grose, associate professor,
 The company also works to use the re-used aspect of its jeans
California College of the Arts, to HuffPost
as a selling point, positioning them as “vintage” and encouraging
users to tell stories about their old jeans online, which are then
posted next to the jeans and used as a marketing aid.
© Euromonitor International
THE GLOBAL CIRCULAR ECONOMY: THE IMPACT OF “REDUCE, RE-USE, RECYCLE” ON CONSUMER PASSPORT 24
MARKETS
INTRODUCTION
KEY FINDINGS
WHAT IS THE CIRCULAR ECONOMY?
CONSUMER ATTITUDES
KEY INDUSTRIES: FASHION
KEY INDUSTRIES: APPLIANCES AND
ELECTRONICS
KEY INDUSTRIES: FOOD AND DRINK
CONCLUSIONS AND RECOMMENDATIONS
METHODOLOGY AND DEFINITIONS
KEY INDUSTRIES: APPLIANCES AND ELECTRONICS
Electronics and appliances: The problem with washing machines
 Washing machines are a key issue for the circular economy, due to
their greatly varying life cycles. Due to short warranties and low
usage, consumers often select lower cost machines, although their
short life spans tend to mean a higher cost per cycle.
 In terms of energy and material consumption, lower cost, shorter life
machines typically use significantly more steel and CO2. However,
their regular replacement with new models means that energy
enhancing technology is frequently updated, while longer life
machines retain out-dated technologies.
 This could be addressed with a programme of regular upgrading of
longer life, higher quality machines. Leasing systems are one option
in this regard. Customers avoid the high cost of an initial pay out for a
high quality machine and benefit from the lower cost per cycle. The
machines could be reconditioned between lease periods. This offers
higher value benefits to both consumers and manufacturers.
 This also means easier recovery of value in end of life cycle products,
with more machines able to be refurbished or used for parts. In short,
all machines would be either refurbished or recycled, and
manufacturers would generate greater savings from higher
refurbishment levels.
© Euromonitor International
Total Sales of Automatic
Washing Machines per
1,000 Households
2016/2021
Australasia
Western Europe
North America
Latin America
Asia Pacific
Eastern Europe
ME/Africa
0
100
200
Units per 1,000 households
2016
2021
Volume sales per household will
continue to rise in all regions
except Australasia, despite
already high penetration levels.
THE GLOBAL CIRCULAR ECONOMY: THE IMPACT OF “REDUCE, RE-USE, RECYCLE” ON CONSUMER PASSPORT 26
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KEY INDUSTRIES: APPLIANCES AND ELECTRONICS
Green product features “very important” for appliances
Importance of Green Product Features for Consumer Appliance Purchase 2013
Colombia
India
Turkey
China
Brazil
Indonesia
Thailand
Mexico
Spain
France
Russia
US
Germany
Australia
UK
Japan
0%
10%
20%
Most important
© Euromonitor International
Very important
30%
40%
Important
50%
% respondents
Somewhat important
60%
70%
Little important
80%
90%
100%
No impact on purchase
THE GLOBAL CIRCULAR ECONOMY: THE IMPACT OF “REDUCE, RE-USE, RECYCLE” ON CONSUMER PASSPORT 27
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KEY INDUSTRIES: APPLIANCES AND ELECTRONICS
Solving the laundry problem: Lease schemes
 There are a number of basic leasing and refurbishing programmes
focused on washing machines.
“The leasing scheme transforms a
long-term investment in a 10,000cycle machine into multiple cash
flows and the right to use the
machine for a certain period of time.
This results in an economic win-win
situation and yields positive material
and energy implications through
prolonged lifetimes of the products.”
Ellen McArthur Foundation
 ISE, for example, operates a refurbishment programme whereby it
collects washing machines from professional users, refurbishes them
and sells them to the domestic market at a discounted price.
Appliance manufacturers such as Bosch often offer lease agreements
with full warranties.
Pay per wash schemes
 Bundles is a Netherlands-based company, established in 2014, that
works on an innovative system of laundry subscriptions in the
customer’s own home.
 Customers lease a high quality Miele washing machine installed with
the Bundles internet enabled device, and pay a monthly fee to use it,
based on machine type and use frequency, which can be adjusted
retrospectively according to actual use.
 Electrolux trialled a similar programme in 2011, but based on smart
metering rather than a proprietary device/app, and this was
discontinued when the utility company ended the smart metering
programme. The Bundles model has potential for greater longevity.
© Euromonitor International
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KEY INDUSTRIES: APPLIANCES AND ELECTRONICS
Electronics closes the loop
 Due to their importance in
electronics manufacture, recycling
of minor metals, such as indium,
which is used in LCDs for mobile
phones, computers and TV
screens, is of note, as companies
look to secure supply.
 A joint study by the International
Lead and Zinc Study Group, the
International Copper Study Group
and the International Nickel Study
Group found that reclaimed indium
from the manufacture of flat
screens adds around 900 tonnes
per year to newly mined production
of indium of approximately 600
tonnes. The recycling process is
highly efficient, with recovery yields
in excess of 95% and turnaround
times of less than 15 days.
© Euromonitor International
 Recycling and re-use is already well established in electronics,
particularly in mobile phones, an area where replacement cycles
are short and disposal of used items can be problematic.
 Sony is driving the circular economy in electronics. Its GO
Recycling programme is a closed loop recycling scheme using
waste products in its production, in place of new raw materials.
Its Road to Zero Initiative is also of note, pushing the company
towards a zero environmental footprint. This features the
company’s own recycled plastic, SoRPlas (Sony Recycled
Plastic), developed in 2011, which contains more than 99%
recycled materials and is made with plastic waste generated
both within and outside Sony sites. Since 2014, this material has
also been sold externally.
 In mobile phones, take-back services are a growing area. One
example of this is the UK’s Mazuma Mobile, a UK-based online
mobile phone re-use and recycling service, launched in 2007.
Mazuma Mobile buys second-hand handsets direct from
consumers, refurbishes them and sells them to suppliers in
emerging markets such as China, Africa, Pakistan and India,
and to insurance companies and phone retailers in the UK.
THE GLOBAL CIRCULAR ECONOMY: THE IMPACT OF “REDUCE, RE-USE, RECYCLE” ON CONSUMER PASSPORT 29
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KEY INDUSTRIES: APPLIANCES AND ELECTRONICS
Electronics: The circular gaming economy
 Game Stop has pushed its buy-sell-trade model into the
centre of its business, and now considers this its core
expertise, rather than the games themselves. The model
adds value for customers, while recycling products that
are no longer played.
 The company has also pushed its refurbishing and
recycling model into electronics others than games and
consoles, including Android and iOS devices.
 Gamestop has its own refurbishment/remanufacturing
facility employing 1,100 people, which works to reverse
engineer each device in the most cost effective way.
Quality assurance is a key part of the process, with the
aim being to return products to original factory condition,
not up or downgraded.
 Products that cannot be refurbished are either dismantled
for parts, or destroyed and recycled. This accounts for
around 15% of consoles that come through the facility.
“We’re a company that has a real strong skill
set around buy/sell/trade, and in fact, we’re the
largest refurbisher and recycler of electronics
in the world.”
Paul Raines, CEO
 The plant is also used as a manufacturing centre and an
idea-incubator (such as building GameStop’s wireless
Bluetooth controller for Android games).
© Euromonitor International
THE GLOBAL CIRCULAR ECONOMY: THE IMPACT OF “REDUCE, RE-USE, RECYCLE” ON CONSUMER PASSPORT 30
MARKETS
INTRODUCTION
KEY FINDINGS
WHAT IS THE CIRCULAR ECONOMY?
CONSUMER ATTITUDES
KEY INDUSTRIES: FASHION
KEY INDUSTRIES: APPLIANCES AND
ELECTRONICS
KEY INDUSTRIES: FOOD AND DRINK
CONCLUSIONS AND RECOMMENDATIONS
METHODOLOGY AND DEFINITIONS
KEY INDUSTRIES: FOOD AND DRINK
Food and drink: The rising profile of food waste
French supermarkets banned
by law from wasting food
 Despite some procedural issues
with the bill, legislation is
expected to be passed in
France banning supermarkets
from throwing away or
destroying unsold food, and
forcing them instead to donate it
to charity or for animal feed.
Those outlets with a footprint of
400 sq m or more will have to
sign contracts with charities or
face penalties including fines
and imprisonment.
 Every year, 7.1 million tonnes of
food is wasted in France: 67% is
binned by consumers, 15% by
restaurants, 11% by shops, and
7% by other bodies.
 The food and drink industry is important for proponents of the circular
economy, due to the key issues of food waste and packaging
disposal. Circular food systems that provide food security while
causing minimal environmental damage are a hot topic, and reducing
food waste is a key facet of this that is rising up the agenda in many
developed markets. According to the World Food Programme, the
world wastes between 30% and 50% of the food it produces. At the
same time, large numbers of people still live without access to good
nutrition.
 Europe leads the way in food waste reduction initiatives, with France
working to pass a law banning supermarkets from wasting food, the
UK working via food waste reduction voluntary codes from retailers
such as Tesco and Marks & Spencer, and Germany notable for
initiatives by private individuals rather than companies, such as
foodsharing.de, an internet platform that gives individuals, traders and
manufacturers the opportunity to offer or collect excess food.
Consumers are encouraged to meet and cook together in order to
share food and reduce wastage.
 In Denmark, food waste is reported to have been reduced by 25%
between 2010 and 2015, and the country is a pioneer in re-using
waste streams and by products through cascading bio refineries.
.
© Euromonitor International
THE GLOBAL CIRCULAR ECONOMY: THE IMPACT OF “REDUCE, RE-USE, RECYCLE” ON CONSUMER PASSPORT 32
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KEY INDUSTRIES: FOOD AND DRINK
Sustainability only number three for processed food
% answering “sustainability”
Which Green Attributes Would You be
Processed Food? 2013
Natural
Organic
Sustainably produced
70
60
50
40
30
20
10
0
Which Green Attributes Would You be
Willing to Pay More for When Buying
Processed Food? by Country 2013
Free range
 Sustainability falls below natural and organic when
it comes to eco concerns for food, although the
issue of food waste is understood to be gaining
ground in developing markets.
Fair trade
Locally sourced/manufactured
 Sustainable production scores highest in Brazil
and Russia, while the UK and France do not
consider this a top priority when looking at
environmental issues around food.
Supports local communities
None of the above
0
© Euromonitor International
20
40
60
% respondents
80
THE GLOBAL CIRCULAR ECONOMY: THE IMPACT OF “REDUCE, RE-USE, RECYCLE” ON CONSUMER PASSPORT 33
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KEY INDUSTRIES: FOOD AND DRINK
Food waste: Going full Cirkle
 Belgian company Cirkle embraces the circular economy by extending its
original business of organic product delivery into managing household waste
using its existing logistics network.
 The company was established in 2008, under the name reason2be, as an
organic food delivery service for Brussels, specialising in locally grown fresh
produce. Within six months this business plan was extended into waste
collection and return logistics, ensuring all vans are always fully utilised. The
company collects a range of items including recyclables, dry cleaning and
charity donations. In 2015, its name was changed to Cirkle, to reflect the
growing importance of the reverse logistics aspect of operations.
 The company takes back over 20 waste streams from consumers and
processes, and sorts the waste. Re-usable items go directly to charities and the
rest goes to recycling companies. All of the money received then also goes
directly to the charities. For example, Cirkle sells cooking oil to customers and
then collects the used oil. This is then sold to a company that produces
biodiesel. All proceeds from selling the oil go to the charity of the month, while
the resulting biodiesel is used in the delivery vans, creating a closed loop
process.
 The company has grown quickly and now re-uses and recycles more waste
than it creates. Founder Benjamin Bramich now plans to reduce emissions to
the point where the service is more energy efficient than customers doing their
own shopping and recycling, while maintaining a profitable business with strong
social values.
© Euromonitor International
“We are continuously
looking for ways to be
better, and take a
holistic approach to
ecological and social
issues.”
Benjamin Bramich,
Founder of Cirkle
THE GLOBAL CIRCULAR ECONOMY: THE IMPACT OF “REDUCE, RE-USE, RECYCLE” ON CONSUMER PASSPORT 34
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KEY INDUSTRIES: FOOD AND DRINK
Coca-Cola tackles plastic drinks packaging
“Continuum provides a real life
example of how closed loop
manufacturing can slash
environmental impacts and
greenhouse gas emissions.”
James Murray, editor of Business
Green
“Infineo is a powerful lever
especially among the younger
generation.”
Eric Brac de La Perrière, General
Manager of Eco-Emballage
© Euromonitor International
 Coca-Cola Enterprises is focused on maximising the usage of
plastics in drinks packaging throughout the cycle, with interventions at
each stage, including materials, design, disposal, recovery and
recycling. It has set targets to improve wastage on plastic drinks
packaging, such as reducing 25% of material used by 2020, using
more renewable content, such as plant-based PET, and to improve
the recyclability of packaging.
 In line with this, it has invested EUR13 million in two strategic
recycling partnerships, Continuum in the UK (a joint venture with ECO
Plastics) and Infineo in France (with APPE). It aims to improve
capacity for plastics reprocessing in the UK and France, where
around 50% of PET is not recycled, while much of that which is
reprocessed is sent abroad. The projects therefore work to ensure
that manufacturers have more access to rPET, in line with increasing
demand.
 Continuum is now the biggest plastic bottle reprocessing facility in the
world, and, as a result, Coca-Cola includes 25% rPET in all its plastic
bottles in the UK. It also recycled around 15 million bottles collected
at the London 2012 Olympic and Paralympic Games, returning them
to the shelves as new bottles within six months.
 In France, Infineo has boosted the capacity of APPE’s reprocessing
facility by 70%. It also features an education centre dedicated to the
circular economy.
THE GLOBAL CIRCULAR ECONOMY: THE IMPACT OF “REDUCE, RE-USE, RECYCLE” ON CONSUMER PASSPORT 35
MARKETS
INTRODUCTION
KEY FINDINGS
WHAT IS THE CIRCULAR ECONOMY?
CONSUMER ATTITUDES
KEY INDUSTRIES: FASHION
KEY INDUSTRIES: APPLIANCES AND
ELECTRONICS
KEY INDUSTRIES: FOOD AND DRINK
CONCLUSIONS AND RECOMMENDATIONS
METHODOLOGY AND DEFINITIONS
CONCLUSIONS AND RECOMMENDATIONS
Approaching a circular economy: Lessons learnt
Gain operational advantage
Differentiate and target
Reduce raw
Make virtue a virtue
material volatility
Create a point of
Reduce exposure difference
Push-used angle
to price fluctuation Appeal to eco
as a positive
Reduce and
aware consumers Create sense of
control cost base
Appeal to
identity and
frugalistas
experience around
pre-owned
 The circular economy opens up opportunities not just to reduce and control manufacturing cost bases, but
also to carve out a distinct appeal to consumers who want eco friendly, original, quirky frugal products with
a story through repair, pre-ownership or rent/lease programmes.
© Euromonitor International
THE GLOBAL CIRCULAR ECONOMY: THE IMPACT OF “REDUCE, RE-USE, RECYCLE” ON CONSUMER PASSPORT 37
MARKETS
INTRODUCTION
KEY FINDINGS
WHAT IS THE CIRCULAR ECONOMY?
CONSUMER ATTITUDES
KEY INDUSTRIES: FASHION
KEY INDUSTRIES: APPLIANCES AND
ELECTRONICS
KEY INDUSTRIES: FOOD AND DRINK
CONCLUSIONS AND RECOMMENDATIONS
METHODOLOGY AND DEFINITIONS
METHODOLOGY AND DEFINITIONS
Data parameters
Euromonitor International Market Data
 All forecast retail value data cited in this report are expressed in constant terms; inflationary effects are
discounted. All historical data, country-specific, regional and global, through to 2020 are also expressed in
constant value terms, with any inflationary effects completely discounted.
 All US dollar data cited in this report – historical and forecast, at national, regional and global level – are
shown at fixed 2015 exchange rates. As such, any impact from currency volatility is discounted.
 Only selected markets are shown in order to provide direct comparison with survey data.
Euromonitor International Surveys
 This report draws partly on results from the Euromonitor International Global Consumer Trends Survey of
on-line consumers, for which the fieldwork was carried out in 2011, 2013, 2015 and 2016.
 The survey was designed to provide a unique perspective on the mind of today’s global consumer.
 In 2011,2013 and 2015, the on-line survey probed the motivations, perceptions and habits of consumers in
nine countries (Brazil, China, France, Germany, India, Japan, Russia, the UK and the US).
 In 2016 this was extended to include the following markets: Australia, Brazil, China, Colombia, France,
Germany, India, Indonesia, Italy, Japan, Mexico, Middle East (includes Egypt, Qatar, Saudi Arabia, United
Arab Emirates), Poland, Russia, South Africa, South Korea, Thailand, Turkey, United Kingdom, and the
USA.
 Between 1,000-2,000 consumers in each market are surveyed each round, with many topics tracked over
time.
© Euromonitor International
THE GLOBAL CIRCULAR ECONOMY: THE IMPACT OF “REDUCE, RE-USE, RECYCLE” ON CONSUMER PASSPORT 39
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INTERNET VS STORE-BASED SHOPPING
Further Insight
FOR FURTHER INSIGHT PLEASE CONTACT
Gina Westbrook
Director Strategy Briefings
[email protected]
RELATED ANALYSIS
The New Consumerism
Lifestyles Strategy Briefing: Changemakers, November 2016
Natural Resources Strategy Briefing: Global water risk – building a resilient
business, September 2016
Eco worriers: Global green behaviour and market impact, May 2015
© Euromonitor International
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