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Africa set to leapfrog developed nations in packageless retail

Africa’s population growth is driving the expansion of formal and informal retail, meaning more packaging and plastic across the continent. Despite contributing the least to the climate crisis, ​ African nations are already heavily impacted by environmental issues such as climate change and plastic pollution. Legislative pressure against single-use plastic, taking hold in the European Union, will inevitably increase across Africa as well.
Africa set to leapfrog developed nations in packageless retail

While many initiatives in Africa are geared towards mitigating the burgeoning plastic waste problem through bolstering recycling rates, the infrastructure for recycling and waste management is still sorely lacking across the continent. Far more focus should fall on eliminating waste earlier in the supply chain, says Nevo Hadas, partner at digital transformation consultancy DY/DX. ​ ​ "While a transition to packageless retail requires investment and changes in consumer behaviour, Africa's unique position could allow it to leapfrog Western societies in the adoption of packageless retail."

The continent's nascent retail infrastructure presents an opportunity to build sustainability into the system from the ground up, rather than having to retrofit existing systems, as is the case in many Western societies, explains Hadas. The absence of heavily invested linear (take-make-dispose) infrastructure allows developing African countries to bypass traditional, wasteful economic models and adopt more circular, sustainable approaches from the outset.

Several initiatives and collaborations across the continent are contributing to progress in eliminating plastic. African countries have been quick to adopt regulations against plastic bags. For example, Rwanda implemented a ban on non-biodegradable plastic bags as early as 2008, and Kenya introduced one of the world's strictest bans on plastic bags in 2017. The South African Plastics Pact, which involves some of the nation's largest retailers and brands, is making headway. South African supermarket chain PicknPay has launched initiatives to reduce plastic packaging.

But is it enough? Packageless retail offers the most sustainable solution to the problem of plastic packaging waste, says Hadas. “If products can be sold without packaging and consumers use reusable containers or even paper bags, we reduce the amount of packaging waste generated. It further enables people to take just the amount of product they need, a powerful solution in developing markets.”

Hadas explains the rising use of plastic sachets and small packaging has become a significant contributor to the plastic waste problem in developing markets like Africa and India, and needs to be urgently addressed with solutions that work for consumers. “The use of single-use plastic sachets for items like water, condiments, and toiletries has skyrocketed. According to a report by Reuters, 855 billion plastic sachets are sold globally each year. In many African countries, these sachets have become a major source of plastic pollution. They are often discarded after use and end up polluting the soil and waterways, causing significant environmental damage.”

These sachets further present a challenge for waste pickers as they offer limited or no economic returns due to their unrecyclability, explains Hadas. ​ As urban areas continue to grow and the demand for packaged goods increases, the issue of plastic sachet waste in Africa is expected to escalate. “There is an urgent need for sustainable alternatives that also serve consumer needs for smaller, affordable amounts of product,” he says.

Hadas is part of the team from DY/DX and Smollan that developed Smartfill, an innovation set to transform packageless retail in Africa. It's an intelligent system that enables consumers to fill their own reusable containers with products, eliminating the need for single-use plastic packaging. This technology, enhanced by AI, allows customers to select the exact amount of product they need, reducing both packaging and food waste. “In the context of African retail, and indeed global retail, Smartfill offers a practical and sustainable option. The system's ease of use and adaptability to a wide range of products, from dry goods to liquids, make it particularly suited to the diverse and rapidly evolving retail landscape.”

With packaging costs contributing significantly to the overall price of products and services, up to 40% of the total cost in cases, offering zero plastic and packaging options could enhance affordability for developing markets, rather than being limited to eco-friendly elites and speciality stores, says Hadas. Research conducted in Smartfill trials in South Africa and Kenya with Spar and Tiger Brands revealed that most customers bought products in paper bags from the store and transferred them into containers at home, such as repurposed coffee tins, showing that the absence of traditional packaging did not hinder consumer convenience. Gross margins for retailers increased by an impressive 17% to 32%, depending on the product, demonstrating that the unpackaged approach can be economically viable for both consumers and retailers.

"Packaging was a logical solution in the context of traditional logistics chains, where it served to protect and market products as they made their way to consumers. However, as logistics chains have evolved and the climate crisis deepens, we must re-evaluate the role of packaging in the shelf supermarket model," says Hadas. "This paradigm shift is not just about reducing waste; it's about adapting to the modern economy and consumer preferences for sustainability and value."

By incorporating packageless retail innovations like Smartfill into their operations, African retailers can meet growing consumer demand for environmentally-friendly shopping options, reduce plastic waste and promote sustainability – all in a commercially viable way. "The road to tackling the plastic waste challenge in Africa is paved with collaboration, innovation, and a shared vision of sustainable, inclusive development, says Hadas. “There is a powerful opportunity here to innovate and lead the globe in making packageless retail part of how we do business in more circular economies.”

27 Jan 2025 16:05

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