Can new Ocado pilot finally crack the code of refillable packaging?

Ocado last week became the latest major supermarket to launch a pilot of reusable packaging, claiming to be the first to do so online.

Of course, the narrative of ground-breaking reusable packaging pilots is a familiar one. Ocado’s comes hot on the heels of Asda’s shock axing of its refill aisles stocked with major brands, which ran in four stores between 2020 and last month.

And this week, The Grocer revealed that a two-year, three-store pilot of Formil laundry detergent in refillable pouches by Lidl had quietly ended, though the discounter says it was a success and it aims to roll it out again in the future.

In fact, there are stalled rollouts and false starts aplenty in the rundown of major retailer refill pilots (see box, below). So why would Ocado’s be any different?

For one thing, Ocado is not going it alone. Its pilot is the result of its membership of the Refill Coalition, a collaboration between multiple businesses to develop standardised refillable containers that can be shared between retailers and brands.

But if standardisation can better enable scale, it also appears to be doing so via a series of setbacks. Since the Refill Coalition was announced in 2022, with Morrisons, M&S, Waitrose and Ocado as members, all but one have left.

Aldi joined in May 2023, enabling the first in-store version of the solution to go live in October – a year later than the coalition’s initial target date. It sees standardised vessels used as the dispensers in refill stations for dried goods and household products.

Neither is the Refill Coalition the only attempt to develop a standardised solution. Reusable packaging platform Reposit, which is powering a pilot of own-label homecare products in pre-filled and returnable containers in 25 M&S stores, last year invited other retailers and brands to get on board with a standardised version. The aim was (and still is) to create a ‘buy anywhere, return anywhere’ model, to launch in June 2024. The actual launch is yet to be announced, with Reposit still waiting for retailers to be ready.

Ocado’s launch was also somewhat behind schedule, with the Refill Coalition having said it would come early in 2024. In its case, the standardised vessel is for delivery to customers’ homes. The first phase sees own-label Ocado basmati rice and penne pasta available in the containers from this month. Two more SKUs – Non-Bio Liquid Detergent and Clear Skies Fabric Conditioner – will be added later this year.

Once returned empty to Ocado, the logistics and cleaning of the vessels for reuse is taken care of by GoUnpackaged, the consultancy that convened the coalition.

As for customers, they simply hand the empty vessels back to Ocado drivers when their next shop is delivered, and here lies another potential ace card: the scheme does not rely on shoppers refilling containers or returning them to stores.

“There is a big opportunity to expand reuse through online retail, as the in-store refill process and the associated barriers are removed,” says Daniel Webb, founder and director of campaign group Everyday Plastic. “This is often what deters customers.”

Ocado’s refill SKUs also come at the same price per unit as the single-use option, though the minimum volume is doubled. In the case of penne pasta, for example, the vessel contains 1kg, while the same is available in a 500g single-use pack.

Online refills

But the pilot is not exactly unique in being online, either. Online grocer Abel & Cole has been offering its Club Zero refill proposition since 2021, with a range that has grown to about 100 SKUs using returnable and refillable packaging.

Abel & Cole also won The Grocer Gold Sustainability Initiative of the Year award in July for offering the UK’s first refillable plastic milk bottle.

“In terms of consumer engagement, we’re really happy with where we are,” says Abel & Cole sustainability lead Hugo Lynch. “We’ve got about one in four of our customers buying into Club Zero every week.”

But still more engagement is needed. Return rates are allowing each milk bottle to be reused on average four times, which is enough to achieve a 50% reduction in greenhouse emissions throughout the lifecycle of the packaging compared with the single-use plastic alternative, according to Lynch.

However, the containers for dry goods are getting reused on average about three times and – thanks to being heavier than the single-use plastic they replace – need to reach 16 uses to achieve carbon parity. “It’s trickier with those kinds of products to get the carbon saving you want,” says Lynch, adding: “But when you look at [single-use] plastic saved from landfill, we’ve reached just under 500,000 pieces.”

Ocado has said the vessels are designed to be used over 60 times, but not how many times they need to be used to achieve carbon parity with single-use, nor how many times it is expecting them to be reused in practice.

The carbon problem with reuse pilots was highlighted last year in a report from the Ellen MacArthur Foundation. Using “advanced modelling”, it found selling food cupboard products in reusable containers would not achieve a GHG emission reduction versus single-use – nor a reduction in the amount of material used – until sales reached a market share of between 2% and 10% of the category.

And we should not expect extended producer responsibility to trigger any major shift to reuse when the fees eventually come into effect in October 2025, says Sander Defruyt, the Ellen MacArthur Foundation’s plastics initiative lead.

But more “regulation” and specific “targets for reuse” could. The UK needs to ask “what EPR is for recycling – can there be something similar for reuse?” suggests Defruyt.

Abel & Cole’s Lynch thinks legislation is the answer. “A lot of businesses are interested in pursuing reuse, as seen in the number of pilots. But without a really strong incentive, nobody is being forced to have the resilience to go through that pilot phase and continue investing.”

Read more on Ocado:

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• Ocado CEO takes aim at ‘ludicrous’ growth predictions of rapid delivery players

• Ocado Retail poaches Nicola Waller from JLP for trading director role

Jane Martin, CEO of City to Sea, a not-for-profit environmental organisation backing Reposit’s collaborative project, says: “Industry is playing its part but, as ever, we would welcome legislation that brings about real system change.”

In the meantime, “the growth of initiatives which we are seeing across retailers will all help to change consumer mindset and promote a more circular economy”, Martin adds.

Wrap reuse specialist Leah Wistrand argues that, thanks to its open-source industry standardised containers, and ability to replicate the existing online shopping experience, the latest pilot from Ocado and the Refill Coalition “has the potential to go exponential and at scale across the UK”.

Everyday Plastic’s Webb says: “At this moment, the Refill Coalition presents the single best route to scale and progress of reuse in the UK. It is collaborative by nature, designed to create cost, time and resource efficiencies, and seeks to address the barriers faced by both retailers and shoppers.”

While it may be far from the industry’s first attempt to voluntarily develop a scalable reusable packaging model, perhaps it could prove the most convincing to date.