India's plastic waste collection industry is remarkable, but it doesn't extend to sachets.
I saw this in action when I watched a waste picker in Mumbai. He diligently picked up plastic bottles, as well as plastic bottle tops but not the plastic sachets sitting right there. This is because sachets have no value – he can sell hard plastic to local aggregators for a small sum, but not sachets.
I discussed this with a manager of a plastic waste processing facility who stated the obvious, “No one bends down to pick up sachets”.
Of course, if companies that sell their products in sachets paid for their collection, they would be picked up. This happens from time to time, but it makes the sachet business uneconomic, so it’s only ever done as part of a marketing program.
One way to see who leads the shampoo sachet market, and causes the most pollution, is to sift through plastic waste and see which brands are most common.
We worked with our NGO partner in India, CARPE, to do this for one entire ward in Aurangabad, Ward 7, which is predominantly a low-income demographic with about 12,000 people
It's not fun work. First, plastic material must be separated from the general household waste. Then sachets of all forms, which covers foodstuffs, candies, shampoos etc., need to be put to one side. These sachets are then segregated further into shampoos and then these are segregated once again into respective brands. It's slow and dirty work.
This is what it looks like…
And the winner is...
At the end of this process we categorised the brands.
The winner, with nearly 1/3 of the market, is Clinic Plus from Unilever. Next we have Vatika from the Indian multinational, Dabur. And in third place we have Dove, also from Unilever.
In fact, Unilever has several brands doing impressively well in the shampoo sachet market. Group them together, and Unilever has nearly 60% of the total, easily beating all other competitors.
I had naively thought brands that sell in sachets would be up for working with us as we try to find and test an economically viable alternative. After all, the sachets they’re selling are causing a massive problem. Publicity and press coverage is universally negative and there are few good solutions on the horizon.
But I was wrong!
We have tried various approaches, from direct emails/InMails to the very top of some of these multinational companies, through to national brand managers, as well as approaches from NGOs and other concerned organisations.
Usually, our approaches are ignored. The best responses lead to a conversation that has warm words and perhaps promise of a referral that usually doesn’t arrive or if it does, it gets kicked into the long grass as we wait for operations/brand budget/managers etc to approve. The best we had was a request that we get back in touch once we've demonstrated our proposed solution works. Fantastic!
This is something of a problem for us because people love their brands. This is as true of low-income individuals as it is of wealthier people, and perhaps more so since if they are going to spend their limited income on something, they want to be very sure it works, and they can trust it.
To complicate things further, these consumers have been educated to expect certain things from brands, whether it is making their hair smooth and strong, or providing anti-dandruff treatment.
Given all this, we'd much prefer to test our refill-reuse idea with brand leaders in the shampoo market, such as Clinic Plus, or Pantene, or TRESemme etc. But no such luck.
It's hard enough to test an idea that requires behaviour change on the part of both the end user as well as the store, but to do it without a known brand is so much harder.
But this is where we are.
Time for Plan B - We’re going to launch our own shampoo brand!
(What could possibly go wrong?)
For decades, consumer goods companies have encouraged low-income consumers to purchase their personal care products in sachets. It's been an effective campaign and today they account for most of personal care category sales in low-income countries.
Consumers get the benefit of a trusted brand at a very affordable price point, typically one, two or four rupees each, that's about 1p, 2p or 4p.
Our goal is to match or beat this price point but do so with a refill-reuse solution. Technically this is a challenge, but a bigger obstacle may well be entrenched consumer behaviours.
Would consumers be amenable to trying a different solution? Would they switch brands as well as format? And if so, what mattered most to them, price, quality, fragrance? Lots of unknowns.
We conducted a range of consumer interviews and discussions to find out.
Encouragingly, we learned that while low-income consumers are brand aware and brand loyal, they would be prepared to switch and trial a new product in a new format given sufficient incentive. Result!
Amusingly, the two main worries about using a new shampoo are that it would stop the shine or make their hair fall out!
We need to learn about kirana stores, those small shops that still make up the majority of India's nearly $1 trillion retail economy.
Little is published about them. Here’s a few snippets from CBI Insights:
- The kirana store continues to represent 75-78% of total consumer goods sales in India, according to Ambit Capital estimates
- Estimates vary significantly, but there are 12-20M kirana shops in India
- Just over 90% of FMCG sales in India happen via kirana stores
We wanted different insights. Could we work with them on a refill solution? Would they be up for it? If so, what margin would they need to make? What space could be available? What would make their business run better or be more profitable?
We weren’t sure, so we went to find out. In recent weeks and months we've conducted interviews and demonstrations with a wide range of kirana stores and learned a lot about their willingness to pilot a refill reuse scheme, along with their various concerns.
it's been a productive and useful exercise.
And on that margin question, we learnt they typically earn about 20% on sachets. Our objective is to deliver a refill and reuse system that beats that without making the consumer pay any more.
Well over 70% of shampoo in India is sold in sachets, and by far the majority is sold through a vast network of independent general stores.
These stores range from someone sitting on a chair selling maybe 10 different products, to large stores with a wide range. Here’s a couple I saw recently…
You get them everywhere.
It seemed likely that a viable solution to selling products in sachets would be easiest implemented where people are already buying the products.
So rather than technology or product innovation or leveraging new channels, our focus became the general store and working out what could suceed there.
It’s entirely possible we have this wrong and it may prove a terrible decision (wouldn’t be the first time!). Time will tell.
Going Round In Circles…. What Sort Of Reuse System Could Work In India? Unknowns, Constraints And Lots Of Questions…
Devising a viable reuse system that would work well in India is hard.
Our first reuse service in the UK is a twist on the traditional milk round – we deliver personal care and household care products in ready to use containers, supplying replenished bottles when needed and collecting empties to reprocess.
This works well in the UK and consumers like it. They get a range of products without plastic waste, conveniently delivered, and everything gets reprocessed for them.
But it’s a nonstarter for much of India. Each bottle we collect must be given an industrial wash, dried, refilled, relabelled, recapped and redelivered, all of which makes for a labour-intensive and costly service.
Wealthy consumers in India might be able to afford this, but not the vast majority. A truly mass solution would need to do without these bottle processing costs… so no bottle collecting or washing or labelling… - which means consumers must use their own bottles.
But would consumers be prepared to buy their own bottles? Probably not
We wondered too whether refilling liquid was the best approach.
Some reuse services remove the water and send out dry powder or concentrates that consumers dilute themselves. This is a great idea and can be one of the better environmental solutions, but consumers like their liquid products and are often reluctant to switch to different formats. And for some products, like hair oil or body lotions etc, they're just not viable.
Some services mail pouches full of liquid, but these are too bulky and costly for most Indian consumers. They also mostly use flexible plastics that are problematic since they can’t be recycled.
One way of delivering liquid cheaply is to use mobile refill trucks. This is done in several countries and can help lower-income communities get product cheap. But it’s hard to scale this. Vans cost a lot and consumers don’t like to wait to get their product at specific van-visiting times.
Nothing seemed obvious.
All we knew was that everything across the supply chain had to be reusable. From the highest level to the lowest, loops and returns had to mesh to prevent single use plastic and reliably deliver product consumers wanted and in a way they wanted it. And then there was that penny price point too.
We need everything to go around in circles but too often it feels like that’s what we were doing!
On World Refill Day, City to Sea and its Refill campaign sent an open letter to CEOs of the world’s five biggest plastic polluters, including two that work in our space, Mr. Jope, CEO of Unilever and Mr. Moeller, CEO of Procter and Gamble.
Signed by over 400 organizations, the letter asked for the CEOs’ commitment to “transparent, ambitious and accountable reuse and refill systems as part of wider commitments to reduce the amount of plastic that you produce.”
It mentioned how plastic production is set to rise by 40% over the next decade and the ‘devastating’ impact plastic pollution is having on the oceans, terrestrial environment, wildlife and human health.
The letter proposed three simple steps:
- REVEAL the full extent of their plastic footprint
- REDUCE the amount of plastic used driven by setting ambitious, transparent targets and supporting action plans on how to achieve them. Then prioritizing achieving those targets
And one close to our heart…
- REINVENT packaging to ensure refill and reuse
You can read the full letter here.
I talk about plastic waste (too much my friends would say!) and notice that people are universally fed up with it, and frankly pissed off that they can't buy the products they want without single use plastic.
People are motivated to help us and it's very heartening.
Our insurance broker removed his commission because he likes what we're trying to do, our graphic designers and IT consultants work at reduced rates because they believe in our goals. It's all very humbling and encouraging.
Sometimes the generosity is surprising. Here's one example.
In our work we use refill machines to transfer liquid from bulk containers into smaller, consumer usable bottles. We've already bought two of them, and our favourite comes from a family company in England called Adelphi Manufacturing.
A few months back, when we were being trained on how to use one of their machines, conversations started about our India project and how we were working (to at least try) to combat the sachet waste problem.
We were told that Adelphi was very motivated to give back where it could, and after some internal discussions they offered to provide on loan, free of charge, a refill machine for the duration of our pilot in India. Buying a new one would be around £10,000.
Isn’t that great?
Problems sachets cause in lower-income countries have been recognised for years, but finding a solution isn’t easy.
Consumers there have for decades been educated to use disposable sachets and now have an ingrained buy and dispose culture.
Traditional refill-reuse habits have faded and there are now precious few circular systems to build on.
Consumers also now have their preferred brands and sachets are the only affordable way to buy them.
On top of it all, we have the daunting 1 penny price point.
But linear supply chains can be inefficient. For example, some products sold in UK supermarkets are made deep in eastern Europe. Ready-to-use plastic containers are shipped perhaps 1000 miles on trucks and the packaging is used once then dumped. Perhaps similar inefficiencies exist in low-income countries?
In recent years Less has operated a refill-reuse system, and we started to wonder if reuse could be part of the solution to sachets.
Perhaps by shipping bulk close to consumers and refilling locally, you could avoid shipping ready-to-use containers from distant factories and save on transport and inventory costs?
Maybe a robust reuse system could enable packaging costs to be spread over hundreds of uses such that unit packaging costs would largely melt away.
And if we could hit or beat the sachet price point, maybe consumers would switch. After all, they’re concerned about plastic waste too, it’s just that their suppliers don’t give them a choice to purchase more responsibly.
The more we thought about it, the more it seemed feasible.
Beating the sachet became our goal and this blog is our story of how well we’re doing (or not!).