Circular business models for the fastmoving consumer goods industry: Desirability, feasibility, and viability

Fast-moving consumer goods (FMCGs) are products that have a short useful lifetime and are typically designed for single or limited uses followed by disposal. The disposable nature of FMCGs combined with ineffective waste recovery systems is causing global environmental problems. Various reusable packaging business models have emerged to tackle these problems; however, their influence is still low in practice. Testing the feasibility, desirability, and viability of innovative circular business models enables their implementation and scaling. In this context, this study explores the success factors, drivers, and barriers of an FMCGs reuse business model. The case company is an internationally scaling company pursuing a potentially disruptive circular business model. A mixed methods approach is used, involving semi-structured interviews with innovators on two variations of the FMCG reuse business model (in-store and e-commerce) followed by a consumer survey in the city of Berlin to test perceptions of these business models. Five success factors were identified: brand and retailer partnerships, consumer participation, operations efficiency, business model profitability, and the establishment of an ecosystem. The main driver for consumers to participate in the circular business model is the potential positive environmental impact, although there were concerns about added environmental impact related to logistics in the e-commerce model. In addition, convenience and accessibility of the reuse model are important for consumers. Costs are identified as a predominant barrier for companies to engage in reusability. Based on the research findings, recommendations for expanding FMCG reuse business models are developed.