Reverse vending, deposit return schemes and an urge to 'keep it simple'

The retail store's future role in plastic recycling and the move towards a UK national deposit return scheme (DRS) for used drinks containers reached new landmarks in May.

Westminster completed its consultation period on how a UK-wide DRS might look, and the government will now use the findings to shape a strategy. On 8 May, the Scottish government unveiled its own more concrete plans for a scheme which would call on all shops selling drinks north of the border to offer deposit refunds to customers.

These times of consultation are naturally providing a platform for debate and counter debate.

Scotland’s DRS, which plans to attach a 20p deposit on drinks sold in aluminium and steel cans, as well as drinks containers made of glass and polyethylene terephthalate (PET) plastic, must be straightforward and targeted if it is to work, according to retailers.

Richard Walker, managing director of frozen food supermarket chain Iceland, which has funded its own DRS over the last 12 months using reverse vending machines (RVM) in stores, supports Scotland’s plans but has reservations about some of the specific criteria.

“Our trial has focused on PET plastic bottles because these are the prime cause of the critical problems of ocean pollution and onshore littering that we are striving to address,” he notes.

Iceland accepts all plastic bottles up to 3 litres in size, and Walker says the company “strongly opposes any effort to dilute the scheme to cover only smaller 'on the go' containers”.

He wants the scheme to omit glass and for Scotland and the wider UK to remain aligned in their strategy, especially as many retailers operate across the border. He adds: “One of our watchwords at Iceland is ‘KISS’: Keep It Simple, Stupid.

“By keeping the DRS simple, focused on the problem that really matters, we will make it easily understood and accessible to all.”

Role of reverse vending technology

Essential Retail reported on last year’s roll out of RVMs in retail stores by Iceland, Morrisons and Tesco – and in pop-up shops operated by Co-op Food at a range of UK summer music festivals. Many of these trials have reportedly shown initial success.

This week saw Sainsbury's become the latest grocer to introduce the technology, in its Lincolnshire superstore, with additional shops set to follow in the coming weeks.

Iceland says in the six months to December 2018 its RVMs in England, Scotland, and Wales collected more than 310,000 plastic bottles through just four stores. The retailer has now extended the trial for a further six months, expanded to Belfast, and is reportedly collecting 100,000 plastic bottles a month.

A spokesperson for Co-op describes results from last year’s DRS trial at the Download, Latitude, Reading and Leeds music festivals, as “encouraging”. The plastic collected at these festivals was recycled and used to create bottles for Co-op’s own brand water.

“This summer we will continue the trials and bring reverse vending machines to even more music festivals, including Creamfields and The Isle of Wight Festival,” the retailer notes.

Meanwhile, Steve Stothard, vice-president and UK country manager for RVM Systems, a global manufacturer of RVMs, claims Morrisons in East Kilbride is collecting thousands of bottles per day via his company’s machines.

“It’s unbelievable the figures going through these machines,” he explains.

“We’ve taken over one million bottles in the pilots with retailers over the last few months. We have 100 machines in operation in Scotland, and we also have a machine in Morrisons HQ in Bradford and one at Iceland’s head office.”

Stothard calls the reverse vending machine “the smiling face of DRS”, and argues that the next few years will see them become part of the in-store landscape alongside self-service technology and online order lockers and collection points. He is fully aware, however, the most important role RVM Systems can play today is in helping support the ecosystem. “Without the wider system in place, our machines are worthless,” he notes.

Self-service machine hardware provider Diebold Nixdorf has also recognised the potential of the market. The German company, in addition to Norwegian manufacturer Tomra, showed off reverse vending equipment at this year’s RetailEXPO in London.

Both businesses are confident the market for RVMs will soon explode, as consumer demand grows and national and devolved DRS initiatives gain traction.

Tomra’s managing director for the UK & Ireland, Truls Haug, says his company is working with UK retail to develop RVMs suitable for a country with a higher proportion of convenience stores and smaller format shops than in mainland Europe and the US.

Reflecting on concerns that consumer confusion and logistical challenges may occur if Scotland’s DRS runs separately to the rest of the UK, Haug says the key difference will be in the labelling and barcodes used for collection.

“You see systems today working hand in hand around Europe but if you have one system it’s easier to run,” he comments.

“However, it’s not smart for Scotland to wait because there’s no reason not to recycle and to continue the litter problem just because the rest of the UK is coming later. Scotland can define a good system and the other British nations could jump on to that system.”

Debate continues

Scotland’s DRS proposals are based on successful models in the likes of Scandinavia and Germany, and the 2021 Scottish election is mooted as an unofficial deadline for a scheme to launch north of the border.

In the rest of the UK, the government is someway behind, having only just started reviewing its responses to a consultation, which included input from individual retailers and trade associations alike.

Association of Convenience Stores CEO, James Lowman, argues a DRS must work for small shops, “by only having drinks containers taken back by reverse vending machines”, and “taking a more strategic look at where return points should be located rather than mandating every retailer”.

The British Retail Consortium suggests a more comprehensive household recycling collection service across the whole of the UK is required first and foremost, with a DRS introduced to “plug any remaining gaps”.

Iceland’s Walker says he’d welcome any scheme extending to aluminium and steel cans, but not glass – as is suggested by the Scottish proposals – because of safety concerns, and the larger RVMs it would require.

He argues that adding glass to a DRS might preclude Iceland’s and other high street, community and independent retailers’ participation as RVM providers, and potentially drive customer traffic towards out-of-town collection facilities.

In Sweden, where a DRS has been in place for decades, retailers can either collect returned bottles of all materials via RVMs or manually. Haug believes any retailer selling drinks containers simply has a responsibility to play a role in the recycling of them.

He supports the Scottish government’s notion that what a retailer puts out into the world, they should be able to take back – as part of a circular economy.

“Glass isn’t being recycled enough in the UK, and the only system that is proven to work in terms of increasing collection rate and reducing littering is a deposit scheme,” he says.

“If you’re able to sell glass you’re able to take it back. It’s about how you choose to collect the glass.”

Lots of different opinions are being aired, and no definite structure has yet been agreed. But as environmental and social concerns mount, one thing for sure is reverse vending stands on the edge of becoming a significant player in the UK’s retail tech market.