Earlier this year, the EU published its highly-anticipated Circular Economy Action Plan (CEAP). Positioned as a cornerstone of the European Green Deal, the document provides a roadmap towards a packaging economy that prioritises the environment and works to eliminate waste.
CEAP focuses on four key objectives; making sustainable products the norm in the EU, empowering consumers to embrace circular packaging, focusing on the lifetime of products through a sectoral lens, and reducing waste. In simplicity, it aims to reduce unnecessary packaging and ensure that what’s left is designed to fit a circular business model.
Packaging experts are predicting the action plan will drive widespread disruption across the sector, with businesses forced to pivot their business models to remain compliant. Indeed, the EU is not simply looking for incremental improvements in packaging technology, but is rather committed to driving a paradigm shift. Brands either need to think about a supply chain that is either packaging-free (returnable/re-usable) or one that makes the most of resources and reduces waste significantly.
Today’s linear packaging industry is therefore likely to undergo rapid change. If manufacturers have felt pressure to date from the anti-plastic lobby, this is about to be significantly intensified with hard, legislative measures. For a range of businesses, this may cause disruption. Yet for others, who are already investing in circular solutions, this provides a growth opportunity.
Developments in circular packaging innovation
One company leading the charge is PackBenefit. Headquartered in Spain, PackBenefit is Europe’s leading manufacturer of high-performance, bio-based, recyclable food trays. Developed using the business’ proprietary and patented thermoforming-coating production process, these products provide a compelling proposition for food service clients within commercial catering, fresh food and food-to-go end markets.
Thanks to eight years of R&D into new forming and coating techniques, PackBenefit’s innovative suite of packaging solutions satisfies the technical performance requirements and safety standards of even the most demanding clients. As well as being ovenproof, microwaveable and suitable for freezing, these products can be recycled within standard post-consumer paper/card recycling streams and are certified as industrially compostable.
An almost like-for-like replacement to incumbent plastic solutions, PackBenefit’s packaging solutions deliver significant positive environmental impact by harnessing the viability of thermoformed pulp as a truly scalable, sustainable food packaging solution. As the brand continues to expand its customer base, the growing adoption of its products will help to accelerate the transition towards a more circular packaging economy by displacing incumbent, single-use fossil-derived packaging solutions which more often than not end up in landfill or incineration.
Growth-stage capital funding
When we founded Circularity Capital in 2015, we did so with the firm conviction that the entrepreneurs of businesses like PackBenefit, who are developing the circular solutions to make this transition a reality, deserve a specialist investor with the right knowledge and network to unlock their full potential.
We have worked hard to develop a firm with the right specialist capabilities to make this a reality and have recently raised our second dedicated circular economy private growth-equity fund for EUR215m, which is the largest of its kind globally.
Our ambition is to grow our portfolio further by investing in leading, innovative, circular businesses where we can add value as a domain expert investor.
It’s clear to see that the circular economy provides a strong framework for decoupling business growth from resource constraints, enhancing resource productivity and driving competitive advantage. It also highlights a subset of business models which are enabling this transition and can generate premium returns for investors. Rather than a short-term trend, CEAP highlights that circular economy thinking will drive industry for years to come.
The packaging industry is set to experience rapid change over the coming years. At Circularity Capital, we’re looking forward to celebrating circularity and playing a leading role in the sector’s transition towards a more resource-efficient supply chain for the future.