Tesco extends Loop partnership: CEO says reuse could be ‘game-changing’

From today, more than 80 reusable products – Tesco own-label and branded – would be available to purchase across ten UK Tesco stores under a second-phase pilot, including food and drink, personal care, beauty and household cleaning items. Pre-filled and packaged in a range of durable and reusable containers, including aluminium and glass, every product carried a €0.23 (£0.20) deposit that was fully refunded via an app once it was returned to be cleaned, refilled and used again. Food safety major Ecolab was taking on the cleaning of empties and logistics specialist DHL was assisting Loop with warehousing, distribution and  fulfilment.

The move followed a one-year pilot e-commerce platform launched in July 2020​ where Tesco and Loop had offered UK consumers a selection of reusable products online that could be returned via a home pick-up service or at drop-off points once finished. As Tesco rolled out its latest in-store model, the online pilot platform would now sunset, though the retailer and Loop would be looking into complimentary online offerings in the future.

A ‘significant milestone’ for Tesco sustainability​

Ken Murphy, CEO of Tesco Group, said the move represented a “significant milestone” ​in Tesco’s efforts to tackle plastic waste. ​

Speaking to members of the press in an online conference this morning, Murphy said: “The impact of reuse in our stores could be enormous. If consumers switch just three products, it could save 2.5 million pieces of packaging a year.”​

Importantly, he said Tesco believed in the “everyday”​ potential of this model and so had worked hard to maintain a competitive price on these reusable alternatives.

Sebastian Munden, executive VP of Unilever – a personal care major with a range of reuse product in Tesco’s Loop offering – agreed accessibility would be key to the success of reusables.

“We know to be successful, reuse models at scale will need to deliver product breadth and choice,”​ Munden said. This was why Unilever had engaged in the in-store Loop trial with several products, including its home care brand Persil and personal care brands Alberto Balsam, Radox and Simple.

But beyond product choice, he said industry-wide collaboration – between brands, retailers, manufacturers, waste processors and government – would prove critical in truly supporting the growth of these reuse models.

“Identifying and removing barriers will be key (…) This is a test, learn and refine approach. Trials like this one will give us valuable insights,”​ Munden said.

The challenge of upscaling reuse – ‘innovation, collaboration and whole-system thinking’ ​

However, both Murphy and Munden agreed upscaling in-store reuse offerings was no easy task.

“Offering reuse is without a doubt difficult; it is a new way of shopping that most people have not experienced before. Refill products, reusable packaging and in-store dispensing are not commonplace right now, so we need to help consumers by making the shift in shopping habits as simple as possible,”​ said Murphy.

To make this happen, the CEO said “innovation, collaboration and whole-system thinking”​ would be vital to ensure reuse was easy, seamless and cost-effective. Transitioning to this new model required fast-moving consumer good companies and retailers to reimagine containment, transit from source and dispensing in store, among many other things, he said, “…but, if we get it right, the potential is game-changing”.​

“…Our hope is that it can ultimately create a template that can then be rolled out more widely. We will be sharing our learnings and inviting innovators to join us on the journey to scale reuse,” ​Murphy said.

Consumer demand is there – it’s now ‘fundamentally about driving scale’​

Importantly, Tesco’s first online pilot with Loop had demonstrated strong consumer appetite for reusable products, even amidst the ongoing COVID-19 pandemic.

Tom Szaky, founder and CEO of TerraCycle and Loop, said: “Loop started [online] at the beginning of the pandemic and we found really, really good response from consumers during this time.”​

Moving forward, Szaky said success would now be based on the ability to scale the Loop model in-store – a need identified during the year-long e-commerce trial.

“We have to take into context that disposable consumption is almost like an Olympic athlete; reuse is just beginning,” ​he said. “What is critically important is we’re able to bring it to scale, so it is absolutely as democratic as possible. This is why we’re privileged with starting with Tesco in the UK.”​

Szaky said Loop would continue to work closely with Tesco to extend out the reuse offering to more stores and add in more products over time. Beyond this, Loop would also look to work with other retailers and brands to extend reach even further, he said.

“It’s, right now, fundamentally about driving scale so that we can drive access and also drive operational costs to go as low as possible.”​

Measuring consumer response to reuse will also be ‘pivotal’ ​

But Szaky said before Loop, Tesco and other retailers could stretch out the reuse offering further, it would be “pivotal”​ to gauge and measure consumer reaction, and respond accordingly. 

Giles Bolton, responsible sourcing director at Tesco, agreed and told CosmeticsDesign-Europe and FoodNavigator there would be “a whole bunch of indicators”​ the retailer would be looking at closely, including what type of products in the offering were most popular and why.

Bolton said: “We really want customers’ feedback on how easy it is to shop”, ​along with insight on how these reusable, durable products fitted into home use and consumption routines.

Tesco was also particularly interested in the consumer experience of returning these containers, he said, like how easy it was and whether the model worked for specific needs. Under the in-store trial, consumers were required to return empties to store and get a QR code sticker to scan into their app for a refund. They were then able to deposit these in bins around the store or in bags, should they have multiple items.

“All of those elements are going to be measured very carefully. For us, this matters not just in terms of Loop – it’s the whole learnings we’ll get in reuse models more widely,” ​Bolton said.

“…It’s always been clear that this [model] wins environmentally, but it has to feel as convenient for the customers as possible,” ​he said.

Tesco said it had plans to scale the reuse model if the 10-store rollout proved successful.