At the core, a circular economy is about utilising existing materials as much as possible, in place of new virgin materials. It’s about retaining, recirculating and recreating value within the system. The more we utilise existing materials, the less we need to manufacture or harvest new ones. The circular economy model is a shift away from the traditional linear method of production. Think of linear production as a “take-make-dispose” model – whereas, circular production is about “making the most of everything at every step” -

  • Linear systems mostly use virgin inputs to create products, which are used for a limited time, then discarded. This model lets value flow through and out of the system.
  • Circular systems maximise and extend the lifecycle of a product, and waste is considered a valuable source of recoverable and recyclable production materials, retaining and creating value through the system.

The environmental, social and human benefits of circular economies over linear ones are easy to grasp. When it comes to business, digging into the business models can unearth a multitude of approaches for companies to benefit from.

What are the circular economy business models - and how can they benefit businesses?

Five basic business models are usually described for circular economies – these were first identified by Accenture in their 2014 report Circular Advantage, and have since been built upon by others.

1. Circular Supplies

A model based on supplying fully renewable, recyclable, or biodegradable resource inputs that underpin circular production and consumption systems. Through 
it, companies replace linear resource approaches and phase out the use of scarce resources while cutting waste and removing inefficiencies.

How nutrition businesses can benefit -

  • Reduce production costs by minimising and re-utilising waste, and selecting renewable, recyclable or biodegradable resources
  • Improve production efficiencies by re-using waste materials
  • Increase revenue through waste onselling or nutrient recycling (eg. WISErg).

2. Resource Recovery

Recovery of embedded value at the end of one product lifecycle to feed into another promotes return chains and transforms waste into value through innovative recycling and upcycling services.

How nutrition businesses can benefit -

  • Reduce material costs or create new businesses by utilising production side-streams - yours or someone else’s - in new ways (eg. Regal Springs).
  • Be favoured by consumers by ensuring product packaging and/or unused product contents are as recyclable as possible, helping them consume more responsibly.

3. Product Life Extension

Product Life Extension allows companies to extend the lifecycle of products and assets. Values that would otherwise 
be lost through wasted materials are instead maintained or even improved by repairing, upgrading, remanufacturing or remarketing products.

How nutrition businesses can benefit -

  • Improve brand credibility by using more protective and smart packaging, to extend product life and reduce food wastage.
  • Increase product value through modular approaches, where the product can be broken down into smaller parts that can be independently bought, used and replaced.
  • Create new products or businesses by giving product waste (such as tea bags, vegetable peels, coffee grounds) a second life in or outside the food market (eg. Helsieni), or by finding a new home for food that would otherwise go to waste (eg. ResQ Club).

4. Sharing Platforms

Promotes a platform for collaboration among product users, either individuals or organizations. These facilitate the sharing of overcapacity or underutilization, increasing productivity and user value creation. In food, this is a more challenging model as products are non-durable. Sharing platforms may then focus more on sharing & pooling resources within production.

How nutrition businesses can benefit -

  • Create new revenue streams by sharing underutilised raw material storage or production facilities (eg. Hot Bread Kitchen) while supporting other businesses
  • Share costs by joint-funding activities, such as multi-client research studies, personnel and knowledge resources.

5. Product as a Service

Provides an alternative to the traditional model of “buy and own.” Products are used by one or many customers through a lease or pay-for-use arrangement. This business model turns incentives
 for product durability and upgradability upside down, shifting them from volume to performance. Again, this model is more challenging for food but internet-ordering and delivery driven services offer opportunity to help reduce in-home food wastage.

How nutrition businesses can benefit -

  • Sell food through new channels, such by delivery meal kit services (eg. Blue Apron) that provide all pre-portioned ingredients to cook sustainable meals at home, and help minimise food waste.
  • Create new businesses through in-home vegetable farming products and services (eg. Green Onyx).
  • Minimise the cost of packaging and increase brand loyalty by reviving the old “milk delivery model” where product packaging is picked up and replenished with new stock. A pick-up-and-replenish service enables a brand to take full ownership for their packaging in a closed loop system, while providing a helpful consumer service.

Finding circular opportunities starts by asking questions!

Circular ways of producing goods is a significant change from traditional, linear methods of production. It can be difficult to see where possibilities lie at first - but getting started is actually quite easy. It starts by asking questions about your business. What do you throw away today? Where and how could that waste be valuable? What could you share with others...or what could they share with you? How can you help people consume more responsibly, just by changing product or packaging materials?

Wherever you find circular opportunities within your business, the bottom line is creating ‘win-win’ solutions. New ways of doing things that benefit people, our world - and your business.

What circular solutions exist within your business?

There's so many ways to activate circularity within the 5 Business Models. To help identify potential areas within your business - and move from idea to real action - we created a DIY online course on Circularity.

It's designed to -

  • Increase your understanding of the 5 Business Models & solutions within
  • Give you tools to identify circular solutions within your business of today, and plan how to action them

We planned this course to help move you forward, through real outcomes -

1. Clarify potential circular solutions you can activate today

2. Develop an Action Plan to start implementing solutions within your business

Essentially, you'll have a plan at hand to start making your ideas happen!

We can also co-create circular solutions together. We've helped companies like you create & launch new circular solutions. Please get in touch with us to chat about your project idea! | [email protected]