Driving the ‘circular economy’ is the smart move for Africa’s retail industry

Companies that proactively embrace this model stand to gain in terms of cost reduction, brand image, innovation, and compliance, making it a smart business move for the 21st century and beyond. Image: Supplied.

Companies that proactively embrace this model stand to gain in terms of cost reduction, brand image, innovation, and compliance, making it a smart business move for the 21st century and beyond. Image: Supplied.

Published Mar 2, 2024


By Kevin O’Brien

The ‘circular economy’ is more than just a buzzword. It’s a fundamental shift in how African, and South African, businesses need to operate to cut costs, maximise growth and save the planet. It is not a nice to have but should be a business imperative – with our thriving retail sector and broad value chain the ideal place to start.

The circular economy is a system that minimises waste, maximises value and regenerates natural systems.

It promotes the circulation of products and materials under the 9R framework. The 9Rs stand for Refuse, Rethink, Reduce, Reuse, Repair, Refurbish, Remanufacture, Repurpose, Recycle and Recover and is a fundamental shift from the traditional linear thinking of taking finite resources, making products, and disposing of them at the end of life.

Numerous local and international reports and studies, including by the Ellen MacArthur Foundation and McKinsey & Company, underscore the immense potential of adopting circular economy principles.

Companies that proactively embrace this model stand to gain in terms of cost reduction, brand image, innovation, and compliance, making it a smart business move for the 21st century and beyond.

According to the World Economic Forum, single-use plastic consumption, which was at 460 million tonnes in 2019 will sky-rocket to 1,231 million tonnes in 2060, threating our fragile ecosystems. Only 14% of this is collected for recycling - the rest ends up in lakes, rivers and seas. Reusing just 10% of plastic product would reduce the amount of plastic waste reaching the ocean by 50%.

In Africa, specifically, according to the World Health Organisation (WHO), our growing population and urbanisation is driving not only an increase in single-use plastic, it’s heightening environmental pollution and human health threats. Apart from freshwater contamination, which impacts the accessibility of safe drinking water, we are consuming microplastics in the food we eat. Plastic waste is also a breeding ground of malaria-carrying mosquitoes, and the burning of plastic waste, a common practice in some regions, releases harmful pollutants into the air, including toxic gases and particulate matter.

While it’s possible to make plastic from plants (such as the bioplastics made from sugar cane or corn starch), for the most part plastic is a byproduct of fossil fuels and as such contributes to climate change – which, according to Deloitte’s recent CxO Sustainability Report, is one of the “top three issues” for consumer-facing companies today.

While focus areas emerging from this include the need to embed sustainability practices across supply chain operations and adherence to ESG-related (Environmental, Social and Corporate Governance) regulations and frameworks, there are companies such as The SPAR Group that is embedding ESG and purpose into the organisation because it is simply the right and ethical thing to do.

A comprehensive and committed approach to environmental sustainability as a whole and responsible packaging, product design and processes as far as possible is imperative in the retail industry. Research indicates that consumers are becoming more conscious of the environmental impact of their shopping choices, and while this is a sound enough reason for more sustainable practices, far more important is the collective impact that effective ESG strategies have on the environment in which we operate.

According to Deloitte, 71% of executives from consumer industries said that they felt strong pressure from their clients and consumers to act on climate change, and 54% stated that their investment in sustainability had increased over the past year.

The SPAR Group, for instance, has been highly deliberate in designing for circularity, underscoring the Group’s commitment to designing packaging that is reusable or recyclable and that contains recycled content. This is a key area of concern and one that if retailers of all sizes throughout the country would pay close attention to, our overall sector impact on plastic waste would reduce significantly and our impact on the environment would improve.

Another concern is the issue of landfills. In November 2021, infrastructure consulting firm, AECOM, reported that Johannesburg, Tshwane and Cape Town metros have less than 10 years of useful landfill life left. This challenge must be tackled head on if we are to curb environmental degradation.

Within The SPAR Group, in 2023 alone, 19 thousand tonnes of cardboard and plastic have been recycled. Our carrier bags are now made from 100% recycled materials, with a minimum of 70% post-consumer waste, and are 100% recyclable. This has resulted in approximately 4,000 tonnes of plastic waste being diverted from landfills annually and a 40% reduction in the carbon footprint of their production.

All extra shelf-life SPAR 2L Fresh Milk cartons are made from 87% renewable materials, which are 100% recyclable. These cartons do more than just contain milk; they carry vital information about the circular economy, educating shoppers on how they can actively participate in recycling.

The decision to replace coloured bottle lids with white lids on their SPAR Fresh Milk plastic bottles, making recycling easier and aligning with circular economy principles, recently earned The SPAR Group the prestigious Platinum Design Award in the South African Plastic Recycling Organisation (SAPRO) Recycled Plastics Product Award.

By changing the bottle cap colour, SPAR shifted to a different type of plastic called HDPE. Now, the entire bottle is made of HDPE, the most valuable plastic for recyclers, and is also cheaper than blue-coloured plastic. This increased the recycling rate from 65% to 98% because the recyclers no longer had to remove the lid and the ring during their sorting processes. Since this change, other retailers have followed suit, making recycling easier for consumers and recyclers.

Brown plastic bottles are being recycled and repurposed into reusable SPAR shopping bags, woven from recycled PET into a polyester fibre that supports sustainability and empowers local communities, with a long-term vision to establish recycling stations in stores to repurpose these bags into blankets, further minimising waste. Recyclers commonly prefer clear or lightly tinted plastics that can be dyed (or left as is) for a broader range of applications. In contrast, brown and darker-coloured plastics are more challenging to recycle. The SPAR bags are locally sourced from ‘Umhlaba Bags’, a Pinetown-based company that empowers over 25 women.

In a groundbreaking partnership with Supercart, The SPAR Group is creating trolleys using recycled plastic milk bottles, diverting even more plastic waste away from landfills.

What is clear, is that recycling alone will not solve the plastic waste crisis. These are just some examples of what is possible with a bit of foresight on the part of retailers, but bigger, bolder and more innovative reuse models are needed. Imagine the impact when more industries get involved and the circular economy truly kicks into gear.

Encouragingly, according to Deloitte, we’re making headway. Almost 60% of customer experience respondents surveyed in the recent sustainability study said they were moving towards using, or already using, more sustainable materials such as recycled materials, lower-emitting products, less plastic material, and more ‘circular’ products as a means of continuing production in a sustainable way.

As a proud founding member of the SA Plastics Pact, The SPAR Group supports the Ellen MacArthur Foundation’s New Plastics Economy vision – a positive platform to stimulate innovation, dialogue and collaboration to unlock barriers to circularity, create new business models, and generate job opportunities.

It is estimated that by 2030, adopting circular economy principles could generate a global economic benefit of $1.8 trillion annually. But as mentioned, the benefits go even wider than that. The time to join the circular economy revolution is now, as the benefits it offers are not only good for business but also for the planet.

Achieving the targets of the SA Plastics Pact and those set out in the extended producer responsibility regulations will bring a range of benefits to the country, but this means we cannot take our collective retail eyes off the ball for a moment. We must be prepared to make tough decisions, invest heavily, and recognise that compromises will need to be made along the way.

Kevin O’Brien, Group Sustainability Executive at The SPAR Group.

Kevin O’Brien, Image: Supplied.