A global CPG company wanted to convert their beverage bottle caps from virgin HDPE to PCR (rHPDE) but wasn’t sure what was possible in the market. Using Circular’s AI platform, the Company created a viable PCR solution, with 5% cost savings (vs. market), all in under 3 weeks.

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Approach

Our customer provided us with the virgin HDPE technical specifications they currently use in their bottle caps. Circular’s platform then instantly compared each specification to our database of >50K technical PCR records to determine the feasibility of matching the virgin spec. We found ample availability of rHDPE with virgin equivalent performance with only two edge exceptions. In these cases, we were able to recommend a spec modification informed by technical records intended for food grade bottle cap applications. With viable PCR specs, together with vetted suppliers, the Circular model then compared market prices to identify savings. 

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Insights

1. HDPE is an excellent candidate to transition to recycled material given its relatively low level of sensitivity to the recycling process. Across all specs, we found minimal performance degradation for rHDPE vs. virgin. This insight allowed our customer to shift the decision about what % PCR to include in their bottle caps from performance to consistency of quality and price.
2. Some virgin specifications, particularly mechanical properties, are often “over-spec’d” and superfluous. In all but two cases, our data showed an ample supply of recycled material that matched virgin performance. In these cases, our tools identified technical records intended for food-grade bottle cap applications and derived recommended modifications to our customer’s virgin spec. This opened additional supplier options with little degradation to performance.
3. Publicly available indices tend to overestimate the cost of material. Using transactional price history from our suppliers, we found 5% savings vs. rHDPE market indices.

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Implications

Using the Circular.co platform, our customer avoided three common pitfalls in any transition to sustainable materials:

1. Minimizing the % PCR due to perceived performance issues with recycled materials. Using blends can not only add complexity to a manufacturing process but also limit a brand’s ability to reach its sustainability goals. Grounding the decision about % PCR inclusion in data makes a complete transition to recycled materials possible in many cases.  
2. Abandoning a project due to perceived material unavailability. Many of our buyers attempt to source PCR with a virgin TDS. Conducting an RFQ process with a “market viable” PCR TDS is critical to increasing supplier options and getting an accurate view of availability.
3. Abandoning the project due to perceived green premium. Most publicly available price indices overestimate the cost of PCR. By providing transparency to transactional pricing, we’re able to inform a buyer’s business case with realistic price data to improve decision-making at the outset. In most cases, we are able to source recycled material at a discount to virgin making a shift to sustainable materials ROI positive.

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