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How cosmetics retailer Lush is making purposeful profit through circular processes

The company is proving less is more.

Inside of a Lush store, which sells cosmetics

This article is part of our Paradigm Shift series, produced by nonprofit PYXERA Global, on the diverse solutions driving the transition to a circular economy. See the full collection of stories and upcoming webinars with the authors here.

Commerce as we know it is going through a rapid evolution. The convergence of new technology, emerging social platforms, constrained natural resources and the evolving values of each new generation is changing the way we do business — whether it’s the sharing economy, the rise of products as a service or the retail shopping experience itself.

But the accelerated growth of the retail industry has come at a cost.

There’s no doubt about it — we are in the midst of a plastic pollution crisis. We’ve all seen the viral images of turtles with straws stuck up their noses, or whales washed up with bellies full of plastic bags. And one of the biggest contributors to this plastic crisis is the space we operate in: the cosmetics industry.

By nature, cosmetics packaging is small and intricate, made up of many parts that are difficult to clean after use, resulting in the majority of this packaging going directly into landfills. Consider that the cosmetics industry brings in a booming $500 billion every year and imagine the waste created by default. But it doesn’t have to be like this. As businesses, we can manufacture and sell products with no packaging, create closed-loop recycling systems and collaborate with suppliers to create innovative solutions for reducing waste — all while thriving.

A family-owned and operated bath and beauty business, Lush began as a single storefront in Poole, England in 1995. With no money for fancy wrapping or individual molds, Lush co-founders Mark and Mo Constantine would hand-pour soap into upcycled drain pipes or lunch pails, then cut slices for customers to order. These humble beginnings ignited a continual cycle of innovation that has driven the brand forward for more than 30 years and continues today with the evolution of more "naked" products that require no packaging at all.

As a vertically integrated business at Lush, we’re in a unique position to embed our values and zero-waste philosophy throughout our value chain.

The global packaging industry is set to reach over $1 trillion by 2021. What if businesses invested that money into the products themselves rather than what is wrapped around them? The waste hierarchy is well known, yet we struggle as businesses to follow it — pushing blame on cost or customer convenience. How do we start with refuse, rethink and redesign in our products and packaging, before we step down the hierarchy? How can we tackle reuse and recycle in a way that is both meaningful and impactful? Designing for sustainability and zero waste can be challenging with multiple stakeholders and competing interests throughout the lifecycle of a product. Who designs the product may be different from who makes it, who sells it or how it’s used. Different business models and organizational structures can be conducive to supporting zero-waste, closed-loop goals.

As a vertically integrated business at Lush, we’re in a unique position to embed our values and zero-waste philosophy throughout our value chain. We still invent our own products, manage our own supply chains, grow some of our own raw materials, own and operate our manufacturing and distribution facilities and run our own retail shops. Now in 49 countries around the world, Lush has the creativity and agility — along with a strong base of customers who share our values — to push boundaries, innovate, make mistakes, learn, evolve and bring to market packaging-free products that prove what is possible.

As businesses that bring products and packaging into our customers’ homes, the private sector has a responsibility to think about how we lead the transition toward zero-waste living. Whether you work in product innovation, packaging or marketing, we each have an opportunity to change the habits and the dialogue in society around waste in our everyday living. Over recent years, we have significantly expanded our naked or packaging-free range by reformulating products to reduce their water content, resulting in solid versions of products such as shampoo, shower gels, body lotions and toothpaste. We invented our shampoo bars back in the late 1980s and in the last five years alone we have sold over 6.5 million shampoo bars in North America, saving 19.4 million plastic bottles from being produced. That’s about 535 tons of plastic avoided, or about the weight of five blue whales.

With a growing range of naked products came an opportunity to evolve a new retail experience with the rollout of Naked Shops in Milan, Berlin, Hong Kong and Manchester. Naked Shops are our way to re-imagine what a store without any packaging could look like. How do you list ingredients without a label? How does the customer find directions on how to use the product? Leveraging technology, we have developed the Lush Lens App, which allows customers to use their phones to scan products and get the typical information they would find on a physical label, along with engaging and interactive content about the ingredients and stories behind them.

Moving down the waste hierarchy is reduce, reuse and then recycle. When it comes to packaging, reduce and reuse can present simple cost savings. Reducing the thickness of bottles or minimizing the use of unnecessary packaging can reduce the cost of resin and materials. Promoting reuse options such as reusable containers or reusable giftwrap can generate initial revenue and help reduce packaging costs if we set up the means for them to be properly reused. When it comes to recycling, businesses can affect the larger systems level by sourcing post-consumer recycled content (PCR). Generating significant demand and putting our dollars toward PCR content rather than virgin resources provides the market signals and funds necessary to support all players in the recycling and processing of those materials.

For the products that do still require packaging at Lush, we have been sourcing 100 percent PCR content for all our plastics and 100 percent recycled paper for over a decade. Our buyers have had firsthand conversations with paper mills about the real struggles of keeping the recycled content supply chain in operation; they have heard these conversations evolve over the years without adequate demand for PCR content. We have worked for over a decade to find, connect and support suppliers and processors throughout the chain who can source, grind, process and extrude packaging that meets FDA and other quality requirements. As businesses, we can all play a role in supporting a circular economy at the macro level by simply sourcing recycled content.

In addition to supporting at the macro level, businesses also have an opportunity to create circular systems for their own packaging and provide customers with a direct and transparent way to ensure their packaging is being properly processed and recycled or repurposed into new items. Lush started the Black Pot program in 2008 when global recycling rates were very low. Through this program, customers can bring back five empty black pots from any of our products in exchange for a free face mask. Black pots, the packaging for some of our haircare, skincare and shower products, returned by customers are shipped back to our factories where they are consolidated and sent to be chipped, washed, pelletized and remolded into new black pots.

Black pot packaging from Lush

The reverse logistics (the process by which we recapture the value of post-consumer material) for this program has not been easy. It challenged us to rethink our black pot supply chain that had been set up in Asia. Through many conversations, we developed meaningful partnerships with local processors in Vancouver and Toronto, located within hours of our factories where our products are made. By fostering these relationships, we were able to localize our supply chain and keep our black pot recycling program within North America. With limited promotion, the program currently has a 17 percent return rate, which allows each new black pot to be made with roughly 10 percent resin from old pots and the remainder from 100 percent PCR resin.

In addition to customer-facing programs, businesses also have an opportunity to initiate waste reduction and circularity programs upstream with their network of suppliers. As we have been tackling zero-waste goals in our manufacturing and distribution facilities at Lush, we recognized the need to engage our suppliers in reducing the amount of unnecessary packaging materials they send into our facilities. Including packaging questions in traditional supplier surveys and focusing on reuse opportunities with local suppliers is a good place to start. Over the past few years, we have found various reduction opportunities by simply initiating conversations with suppliers and sharing our zero waste goals. We’ve eliminated the soft plastic baggies that used to cover each of our reusable metal shampoo and lotion containers, we have worked with suppliers on larger volume containers to eliminate many smaller containers, and we’ve successfully tested a few reuse programs with local suppliers.

One recent win was a cardboard box reuse program with our black pot supplier. Through our annual waste audits, we noticed that cardboard was 47 to 55 percent of the discarded material being generated in two of our production rooms. Our cardboard box reuse program allows us to reuse boxes an average of five times, saving roughly 9,000 kilograms of cardboard annually with the potential for 17,000-plus kilograms more. While reducing cardboard may not look good in the way companies typically calculate and communicate waste diversion percentages, reducing the overall discarded materials is the right thing to do and has encouraged us to rethink how we measure and value true waste reduction and reuse efforts.

At Lush, we look to nature for inspiration. Similar to keystone species within larger ecosystems, we see the opportunity to be a catalyst for change and have a disproportionately positive impact on our industry to transform bathroom habits and routines around the world. Whether it’s working with our network of suppliers or bringing packaging-free products to market, as businesses we can all have a positive ripple effect in all that we do — in the decisions we make, the ingredients we put into our products, the people we do business with and the voices and values we amplify. In truth, it’s not the easy way. But if all of us use our business influence for good to raise awareness about waste issues, challenge industry working groups and support advancement of government policies, then we collectively can have a much greater positive impact on creating a cleaner, more sustainable world.

To learn more from the leaders of the circular economy transition, visit PYXERA Global.

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