Towards the Circular Economy: opportunities for the consumer goods sector

Towards the Circular Economy Vol.2: opportunities for the consumer goods sector, a new report, featuring analysis from McKinsey, which builds on last year’s report and makes the case for a faster adoption, quantifies the economic benefits of circular business models, and lays out pathways for action.

The report focuses on fast-moving consumer goods, which currently account for about 60 per cent of total consumer spending, 35 per cent of material inputs into the economy, and 75 per cent of municipal waste. Importantly, the consumer goods sector absorbs more than 90 per cent of our agricultural output – possibly our most embattled resource in the future.

Key Findings

Analysis shows that the adoption of the circular economy could be worth as much as USD 700 billion in consumer goods material savings alone, and also highlights added benefits in terms of land productivity and potential job creation. The report features specific examples in product categories that represent 80% of the total consumer goods market by value, namely food, beverages, textiles, and packaging. Of the many tangible examples across these sectors, highlights include:

·         Household food waste: An income stream of $1.5 billion could be generated annually in the UK alone for municipalities and investors by collecting household food waste and processing it to generate biogas and return nutrients to agricultural soils

·         Textiles: Revenue of USD 1,975 per tonne of clothing could be generated in the UK if [collected, remade, and] sold at current prices, comfortably outweighing the cost of USD 680 required to collect and sort each tonne

·         Packaging: A cost reduction of 20 per cent per hectolitre of beer sold to consumers would be possible across all markets by shifting from disposable to reusable glass bottles, which would lower the cost of packaging, processing, and distribution

Download full report here