Investing in a new usage model to cut plastic packaging

Designing and scaling new usage solutions is one way to transform the plastic value chain to reduce waste and greenhouse gas emissions. In this case study of 900.care¹, our private-equity team considers how the company’s concentrated and refillable personal-care and household products help tackle plastic waste while enabling favourable investment prospects.

 

Need to know: New usage models for plastic include companies specialising in innovative materials and new ways of delivering products without single-use packaging We have invested in 900.care, a French company selling concentrated and refillable personal-care and household products that is making a measurable impact through reusable packaging and shipping active ingredients only, without water The company has a proven track record of growth that we believe is likely to further benefit from favourable tailwinds and strong potential for scalability

 

Reducing plastic waste

Volumes of plastic waste can be significantly reduced by rethinking how we use plastic, thereby cutting the greenhouse gas (GHG) emissions associated with generating new plastic.

Our Plastic Circularity strategy aims to find scalable solutions to the plastic waste problem. We invest in private companies that are transforming the plastic value chain into a circular model in three areas:

• Innovative materials that use lower-carbon feedstock and no fossil fuels
• New usage models incorporating repair, reuse and refill models
• Improved collection, sorting and recycling

The first and second areas include companies specialising in innovative materials and new ways of delivering products to consumers without single-use packaging. In December 2023, we completed an investment in 900.care, a French company selling concentrated and refillable personal-care and household products online by subscription.

In this case study, we consider how 900.care contributes to reducing plastic waste, why we believe it benefits from favourable growth prospects and what measurable impact it makes.

 

Concentrating on the product

By producing and selling purely active ingredients rather than diluted products, and by enabling packaging reuse, 900.care generates significantly less plastic waste and greenhouse gas emissions during production and transport.

The company ships a variety of products. Bestsellers include refillable shower gel, shampoo and deodorant, as well as toothpaste in tablet form. It also offers household products including laundry detergent, dishwasher tablets and washing-up liquid.

Typically, the products are in concentrated powder form that consumers dissolve in water at home. Because conventional products contain 90% water, the shipping volumes associated with the company’s products are smaller. So are the resulting carbon emissions.

Through its subscription service, the company dispatches top-ups directly to customers’ homes at the desired frequency. Its products are price-competitive and appeal to a large market, with over 235,000 active subscriptions in France alone. The ingredients are more than 95% natural.

 

The investment rationale

900.care has a proven track record of growth that we believe is likely to further benefit from favourable tailwinds. For instance, the company almost tripled its turnover in 2023 and exceeded EUR 10 million in revenue by the end of the year².

In future, we see a favourable demand outlook for the 900.care’s differentiated offering and a propensity for the company to quickly scale up. Its ability to combine product expertise and sustainability can also positively impact the playing field. Key attributes include:

	A promising demand outlook. The very large and addressable market in Europe for hygiene and personal-care products is increasingly penetrated by online and zero-waste models. For instance, the bath and shower category is experiencing an increase in digital penetration, while product composition – involving natural products – and packaging are increasingly important considerations for consumers
	Differentiated products. The company provides a differentiated offering with strong potential to achieve mass-market appeal. Its powerful brand is already listed in the top 10 ‘most loved’ brands by Gen Z consumers in France. Its competitive pricing – at EUR 2.49 per shower gel refill3 for instance – appeals to a wide range of consumers
	Expansion prospects. The strong potential for quickly scaling up the business stems from 900.care’s online sales model, both in France and internationally. This supports the company’s predicted path to profitability in France by 2025 and paves the way for international expansion. For instance, its existing manufacturing and logistics set-up should enable it to serve other countries in Europe
	Cutting-edge know how. We see 900.care’s robust R&D and pioneering product expertise also standing it in good stead. It plans to introduce new products and take advantage of cross-selling opportunities in the personal-care, household and skin-care segments. These areas typically benefit from high gross margins that are in line with this market
	A strategic area. Personal-care and household products are increasingly attracting private-equity investors, with many innovative companies being acquired by leading corporates. This provides multiple exit routes for investors

 

The impact rationale

Refillable models are key to transitioning away from single-use packaging: the principal contributor to plastic waste and pollution.

By supplying concentrates, refill pouches and solid products that would typically be in liquid form – such as shampoo or soap – 900.care reduces the volume and weight of the products shipped, as well as the overall required packaging volumes. Here, there is a direct link between economic success and impact because less waste lowers costs.

 

Source: LOIM, 900.care. For illustrative purposes only. Figures are net of the reusable containers that have been put on the market. As at December 2023.

 

Representing the least disruptive ‘reuse’ model for the consumer, refills are likely to scale up first in the transition to a circular model for plastics, in our view. The personal and household product market is particularly well suited to this model, with 900.care’s refill-at-home service even more convenient.

Refill models are also gaining regulatory favour. In France, by 2030 large supermarkets are required to make 20% of floor space dedicated to bulk purchases and product refills. Such laws represent a positive driver for the overall refill segment and an opportunity in retail for 900.care once the brand is more established.

Increasing circularity in plastics through refill solutions mitigates the industry’s impact on climate and biodiversity. Some of 900.care’s key impact performance measures are:

• As of December 2023, 900.care has reported avoiding 2.8 million units of single-use plastic and not shipping 500m3 of water⁴
• By the end of 2024, 900.care aims to increase the recycled content in its refillable packaging from 50% presently to closer to 100%

 

Catalysing change

Rethinking how plastic is used is critical to reducing plastic waste overall and mitigating GHG emissions. We believe that refill models such as the one being harnessed by 900.care can help catalyse system-level change in end-to-end plastic value chains, ensure scalability and generate market returns.

Sources.

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