What I learnt about the circular economy through starting (and closing) a circular business

A circular economy needs system-wide change but it is also formed of millions of small changes, across every sector, product, service and action. With Unwrapped Bars I set out to see if I could initiate one of these small changes — avoiding single-use packaging for energy bars.

The solution to single-use packaging is an obvious one: reusable packaging. During an 8-month testing and development phase, I discovered the main challenges to this:

1. Long-term reusable packaging (100+ uses)…
2. …which doesn’t come at a high carbon or environmental cost that outweighs the benefit of re-use
3. Hygienic, robust material, which looks good after multiple uses (aesthetics are really important if you want your product to look tasty!)
4. Incentivising sustainable behaviour change (i.e. making it easy for customers to make the choice to send back the wraps)
5. Creating a financially sustainable business model based on the above which provides a reasonable profit margin without being unaffordable for the customer.

After a period of testing with customers and incorporating their feedback into my product I launched with a one-off purchase option and a subscription plan.

A customer photo — the bars travelled far and wide, including to the far north of Scotland

To my slight surprise, subscription was overwhelmingly the most popular choice with most customers opting for bi-monthly delivery (compared to monthly or tri-monthly). In fact, for the whole time I ran Unwrapped Bars my subscribers outnumbered my one-off customers by about eight to one, and only one subscriber left.

With the business up and running the next question was would subscribers send their wraps back? Technically, they didn’t have to — they’d receive their next box regardless. This was definitely a risk for the business as the subscription box didn’t include the cost of the wraps, just the actual bars. I also included a pre-paid envelope in the box so the customer had as little hassle as possible, which was a further cost to the business.

Customers received a box of six bars in a recycled cardboard box, with a pre-stamped envelope

I was operating a retained ownership model, maintaining responsibility for what happened to the packaging (otherwise known as extended producer responsibility). I wholeheartedly believe in this model, but for a tiny business it had the potential to run my costs up pretty high if customers didn’t send their wraps back and I had to send out new ones.

The majority (>90%) of customers did send their wraps back; the challenge was that they sent wraps back whenever they wanted. This didn’t necessarily line up with when their new box was due to be sent out. I had costed in a small amount of ‘leakage’ but this meant that I had to send out new wraps more than I expected, even when a customer did eventually send all their wraps back.

However the biggest unexpected challenge was how many of the wraps came back completely trashed, for want of a better word. I had wraps returned scrunched up, torn and some even covered in glitter. This made them unsuitable for re-use. By not costing in the packaging for the customer I had accidentally reduced the perceived value of the packaging to nothing. Rather than create the behaviour change of truly valuing resources and therefore avoiding single-use, by taking on the cost of the packaging myself my customers were not incentivised to take care of their wraps. They were, essentially, treating the wraps like throw-away packaging*.

To be clear, most customers didn’t do this. But it was a significant enough proportion that it caused a real issue both for the basic economics of my business and for the circular system I was trying to create.

Reusable packaging was often treated in the same way as single-use

Nonetheless, over the first four months of operation Unwrapped Bars grew to be profitable and built up a strong subscription base. I loved receiving the wraps in the post, often with handwritten notes from the customers about how much they had enjoyed the bars or the adventures they had fuelled. The rotation of returned packaging got to a strong enough position that when I eventually closed the business I had a whole box of brand new unused packaging which I never needed.

Our feature in Trail Running magazine!

So what lessons about creating a circular economy did this experience teach me?

1. Don’t rely on behaviour change — make the circular choice the easiest one, or it won’t happen. I had a dedicated subscription base who knew the importance of sustainability and a sizable proportion still treated the wraps as throw-away. The customer is always right and behaviour change is hard — so fix your model rather than rely on this.
2. Re-use isn’t always the most sustainable option. Someone shared Unwrapped Bars in a niche sustainable packaging community on LinkedIn and it got some healthy criticism. Some of this was short-sighted (claims that customers would ‘never’ return their wraps, when my model was proving otherwise) but some of it was legitimate: would the carbon emissions of all that posting/sending back be offset by re-use? Is it possible to compare avoiding single use packaging to avoiding carbon emissions — or are they two different problems which require trade-offs? These are questions we need more research on.
3. Businesses should be born circular. I didn’t just want my product to be circular; every decision I made about how to operate my business came from the perspective of ‘earth first’ — making sure my business had a net-positive impact on the environment and people.
4. Being circular is expensive. There are very few incentives for businesses to operate using circular principles, including financially. My product appealed to a certain type of customer so the business became profitable, but there is very little financial support (in the form of breaks or credits) to encourage operating in this way. Being a linear business is still the profitable option.
5. Finally, a circular product isn’t possible in a linear economy. For example, I sent my bars out in boxes made of recycled cardboard and I’d hope that customers would re-use or recycle these boxes, but I can’t guarantee that happened. So although my actual product was circular all the infrastructure around it wasn’t**. I’m okay with this — don’t let perfect be the enemy of good — but we need to be honest about what a circular business or product actually looks like, because it is unlikely to be a perfect circle. We need a circular economy target like net-zero to gather momentum.

Ultimately, I closed Unwrapped Bars because it wasn’t solving a big enough problem and I have many more ideas I want to work on. But it taught me that there is strong consumer demand for circular options and a willingness to take on a slight reduction in convenience (keeping wraps and going to the post-box) in exchange for greater sustainability.

I’d love to see reusable wrapping take off in the snacking industry and I do believe that extended producer responsibility is key to creating a circular economy. In the meantime, I’m encouraging people to make their own sustainable energy bars at home — I’ll be posting the Unwrapped Bars recipe (and special wrapping technique!) shortly.

Thanks for reading, I’d love to know what you think.

You can check out Unwrapped Bars at the website, which is still live: unwrappedbars.com

*It’s worth mentioning in addition that every single customer sent their wraps back without having cleaned them. I always cleaned the packaging myself — and of course would have done even if the wraps had been sent back clean — but I was very surprised with how little care customers took over their wraps.

**This wasn’t the case for the small number of bars I sold directly in shops, but the growth potential was in the subscription model which is where I focused.