Executive summary

This report looks at the potential for cutting the unnecessary use of resources in consumer goods products that are sold in supermarkets – with a special focus on materials. It focuses on Europe’s economic powerhouse, Germany, where several of the major European supermarkets have headquarters and where the level of environmental awareness is already relatively high. The report argues that Germany, starting with its supermarket sector, can take a genuine lead in the circular economy going beyond the rhetoric and resulting in concrete actions and measures to effect transformative change.

Over the past century, humanity has become a dominant geological force on Earth, transforming its environment and climate system. In his short presence on this planet, homo sapiens has managed to shift more sediments through mining activities than all the world’s rivers combined, warm the planet, put a hole in the ozone layer and acidify the oceans. Overconsumption of finite resources is a big part of this problem: We already use 1.5 times as many resources as the Earth can regenerate and this is projected to increase to 3-5 planets-worth by 2050. If our consumption patterns do not change, the oceans will contain more plastics than fish by 2050 and we will live in a world of extreme weather events and collapsing food production, where resource conflicts and exotic diseases result in millions of premature deaths, with poor and vulnerable populations the worst affected. Such a bleak future can still be averted, but we have to act now to bring our insatiable thirst for resources back within planetary boundaries.

Part of the solution to our unsustainable consumption patterns, which are currently based on extracting and discarding enormous amounts of “stuff” is a shift towards a resource-efficient circular economy. The idea of a circular economy is built on the respect of environmental boundaries, reducing consumption of raw materials, energy, emissions and water. Materials are used for as long as possible to extract maximum value and then recovered at the end of a product’s life to create a closed circle of production and consumption. Resource efficiency is a complementary strategy that aims to reduce the amount of materials and other resources needed to manufacture the products in the first place. They are both key elements of a shift towards more sustainable production and consumption. A direct comparison can be drawn with the transition to a more sustainable energy system: while we need to move to a 100 percent renewable energy system as fast as we can, eliminating wasteful use of energy through efficiency measures and technologies makes the transition easier and cheaper, while delivering immediate economic and social benefits.

Numerous studies have highlighted the economic and social benefits of moving towards resource efficiency and a circular economy. A study by the European Commission has shown that setting a resource productivity target of 30 percent for the entire EU by 2030 could boost GDP by nearly 1 percent, and create over 2 million jobs compared to the business-as-usual scenario. A similar study by the UK-government sponsored WRAP initiative showed that moving towards a circular economy has the potential to create 1.2 to 3 million jobs in Europe and reduce structural unemployment by around 250,000 to 520,000 by 2030. Today, more than 3.4 million Europeans are already employed in the circular economy.

Despite the numerous benefits and lip service paid to the concept of a resource-efficient circular economy by high-level politicians and company executives, progress seems slow and concrete actions and initiatives by market players are patchy. Companies are putting more and more “stuff” on the market despite the fact that more efficient alternatives exist. Indeed, adopting resource-efficient production is a simple, practical and no-regret option. But the lack of knowledge and consumer awareness, the inertia of market players, and regulatory barriers all prevent the potential benefits from being fully realised. A drastic change of approach is needed.

This report looks at how the benefits of resource efficiency can be realised by German supermarkets. It concludes that the material reduction potential across the entire range of German supermarket products is about 20 percent. Most of it is achievable just by switching to more efficient products, while part of the solution lies in applying innovative approaches that move from a business model based on ownership to one based on the provision of services. The switch can be done in several ways, either by adopting products from recycled materials, reducing packaging, or switching to more efficient products, such as compressed or compacted liquids. This would not only be good for the environment, but would also bring a range of other benefits, especially if it were to be rolled out across the entire economy: the report finds that increasing resource efficiency by 20 percent economy-wide would create almost 700,000 new jobs and reduce gross output prices by 4.3 percent by 2030. Lower production costs in manufacturing industries would help German firms become more competitive and result in a rise in exports of almost 5 percent, while imports would fall by 10 percent.

The research has also shown that most supermarkets are not aware of the benefits that resource efficiency would bring. Despite their strong market position – of the top ten European supermarkets, five are German – and the key role that they can play as the gate-keepers between producers and consumers, influencing the type of products that are put on the market, not one of the German supermarkets has any measures in place to address the resource efficiency of the products they sell. This has to change. The report ends with recommendations to the big five supermarkets to immediately replace their least efficient products with better alternatives, reduce packaging, and adopt concrete targets and measures to become more resource-efficient. The resource crisis that we are facing is urgent and supermarkets must immediately start playing their part to address it.