Introduction
The confectionery manufacturing industry is increasingly embracing circularity in an attempt to design out waste and keep materials in use via regenerative systems. Achieving this requires continued innovation, cross-sector collaboration, and stakeholder engagement. However, the business and environmental benefits make the case for doing so a compelling one.
Circular practices simultaneously cut costs, open new revenue streams, and reduce environmental impact. Consumers are rewarding brands for such efforts as they increasingly prioritise environmentally friendly products with less plastic packaging, and packaging made from recyclable or bio-based materials. Circular practices have helped confectionery companies not only meet this demand but also meet regulatory requirements, thereby avoiding potential fines or market access issues.
Across the UK and the EU, confectioners are joining programs like the Plastic Pact and Extended Producer Responsibility schemes as a means to comply with regulations, gain market acceptance, and develop a competitive advantage. This article discusses how confectionery firms are integrating circular economic practices into their product development and innovation strategies and the financial and environmental benefits these changes have brought.
Benefits of embracing circular practices
Adopting circular economy practices delivers significant environmental and financial benefits for confectionery manufacturers. These include reducing waste and emissions, lowering costs, and strengthening brand value and resilience. From sustainable ingredient sourcing and developing eco-friendly packaging, to production efficiencies and new consumer engagement models, circular opportunities are visible throughout the confectionery value chain.
Production
At the production stage, circular strategies can drastically cut the volume of waste that would otherwise be created. By segregating and repurposing waste streams, confectionery manufacturers have uncovered ways to lessen environmental harm and recover significant value from by-products.
In a perfect example of using by-products further up the value chain, Nestlé UK began a two-year pilot with Cargill and CCm Technologies in 2023 that turned cocoa-bean shells from one of their chocolate factories into pelletised, low-carbon fertiliser. This process could supply 7,000 t of fertiliser per year, replacing ~25 % of Nestlé UK’s chemical fertiliser demand with low-carbon organic alternatives. This scheme also has the added benefits of avoiding disposal costs, and securing a local, price-stable fertiliser for Nestlé’s supply chain.
Other chocolatiers have implemented similar waste reduction initiatives. Mars’ flagship Dubai plant, went from landfilling 36% of its waste in 2008 to achieving zero waste to landfill by segregating, recycling, or reusing all of its waste stream. Where previously, every tonne of chocolate produced ~110 kg of scrap, which would have been destined for landfill. Now this waste is shipped to local cement kilns where it directly displaces fossil coal and cuts fossil-fuel emissions. All while creating a revenue-neutral disposal route for Mars.
Upcycling waste material has also led to significant product development and innovation. For instance, the Belgian chocolatier Vandenbulcke won gold at the ISM trade fair with its Cabosse praline, which replaced conventional fillings with fragrant cocoa-fruit pulp, a novel ingredient that would normally be discarded. Similarly, Swiss-Belgian cocoa processor Barry Callebaut has patented a process that grinds cocoa shells into a fine powder which can be used as a substitute for cocoa mass, converting a low-value husk into a functional ingredient.
Beyond solid waste, water conservation has become another crucial aspect of circular practices in confectionery production. For instance, Mars Dubai has invested in a water treatment facility that treats 125 m³ of wastewater per day. This water is purified to an irrigation standard and either re-used internally or supplied to third parties.
By repurposing waste, either within their own processes, within their own supply chains or via external parties, confectionery companies are demonstrating how circular initiatives can yield significant environmental payoffs, such as lowering emissions and reducing landfill waste products, while providing business with material savings.
Packaging
At the packaging stage, embracing circularity often translates into less raw material, more recycled components, and long-term cost reductions. This has the dual benefit of helping to lower material procurement costs and environmental footprint at the same time.
Numerous manufacturers have pledged to significantly reduce virgin-plastic use and redesign packaging for recyclability or reuse by 2025. For instance, both Nestlé and Ferrero, are aiming for all of their packaging to be reusable, recyclable, or compostable by 2025 and Mondelēz International is aiming to reach 98% recyclable packaging by the same year.
Tangible progress toward these goals has already been made, for instance, roughly 87 % of Nestlé’s global packaging portfolio is now recyclable or reusable, and the company has trimmed virgin-plastic consumption by about 8% since 2018. Similarly, Mondelez has eliminated 12,825 metric tons of plastic packaging, reaching approximately 96% recyclable packaging (as of 2023).
At the same time, efficient and accurate short-horizon forecasts of packaging needs – a key component of circular supply chain management – is also delivering significant cost savings for many confectioners by preventing over-ordering materials and avoiding tying capital up in unused inventory.
But packaging innovations have not been limited to just using less material or switching to recyclable options. Creative solutions incorporating novel bio-based and upcycled materials are also abundant. Companies like India’s craft chocolate brand Kocoatrait have developed wrappers made from upcycled cotton fibre and reclaimed cocoa bean shells, while Ferrero have incorporated hazelnut shell waste (a by-product of Nutella’s key ingredient) into bio composites used in their trays and displays.
Reuse models are also gaining traction. For instance, in 2020, Ferrero launched a trial in Paris where Nutella was sold in durable glass jars that consumers could return to Carrefour supermarkets for cleaning and refill. This 10-store pilot allowed Ferrero to assess consumer acceptance of a modern “milkman model” for the popular spread, aligning with circular principles of reusing packaging multiple times instead of single-use.
Post-purchase
While improving internal processes and reducing manufacturing certainly helps, achieving true circularity extends well beyond the factory gate: it relies on consumer participation, government support, fit-for-purpose collection systems and cross-industry partnerships. To that end, numerous confectionery brands have been actively collaborating with governments, NGOs, and local communities to improve recycling systems and support.
Many have engaged in Extended Producer Responsibility (EPR) schemes, driven systemic changes and shared best practices with industry peers and stakeholders all over the world. Mondelēz, for example, actively participates in numerous industry coalitions to improve recycling systems. They also advocate for policy changes – going as far as to co-chair the Consumer Goods Forum Plastic Waste Coalition’s working group on flexible plastics – and have worked with various governments on building recycling infrastructure.
Mondelēz is not alone in these efforts. Mars, Ferrero, and Nestlé, have also made similar commitments. All four are members of HolyGrail 2.0, an industry consortium trailing digital watermarks on packaging to improve sorting and recycling rates. By embedding imperceptible codes on wrappers, these companies aim to enable recycling facilities to better identify and segregate packaging materials. For example, distinguish a polypropylene wrapper from other plastics.
However, the success of such initiatives requires robust infrastructure and at present, significant last mile challenges persist. This is largely due to infrastructure gaps, limited consumer awareness and in some regions insufficient government support. Yet, despite these challenges notable progress is still being made, as industry leaders invest heavily in consumer education and joint initiatives. Examples of this can be seen all over the world. In the UK, Montezuma’s Chocolates (UK), introduced bold-coloured eco-friendly packaging that forgoes plastic and includes labels that educate consumers on sustainability. In North America, during Halloween, Mars and other confectioners have sponsored wrapper recycling drives that capture millions of wrappers that would otherwise be landfilled. While in Ghana, a coalition of chocolate makers launched an “eco-trading” program to collect and recycle chocolate wrappers, turning them into items like school furniture.
Where and how confectionery companies can become more circular
Transitioning from a linear to a circular model can seem daunting, but confectionery companies can start by identifying opportunities to eliminate waste and keep resources in circulation, within their products’ lifecycles and supply chains. Companies at the beginning of this journey should consider focusing on the following areas:
Redesign products and packaging for circularity
Using fewer and better-quality materials, might involve downsizing or light-weighting packaging, switching to mono-material or paper-based wrappers that are easier to recycle, and eliminating mixed materials that can’t be processed. But equally it could involve designing more sturdy packaging that encourages reuse. Increasing recycled content in packaging should also be considered as it reduces reliance on virgin materials. However, it is important to note that any redesign must ensure that product quality and shelf life are maintained to avoid food waste. Confectioners should collaborate closely with packaging suppliers, constantly testing and refining designs to ensure any changes are effective and sustainable.
Optimise manufacturing and waste management
Factories are an excellent starting point for introducing circularity as internal processes are within a company’s control. This can begin with better waste measurement and segregation. Setting waste reduction targets can drive teams to find innovative recycling or recovery options. Common confectionery by-products like food scraps, cocoa bean shells, excess sugar, and waste oils can often be repurposed – either in-house or through external partners. But even simple actions, like reusing spilled or misshapen chocolate, can significantly reduce ingredient waste. Auditing water and energy usage can also identify further opportunities for improvements, for example, reusing process water or capturing waste heat from production.
Engage supply chain partners
Partnerships are vital to achieving circularity. Where possible, confectionery brands should collaborate with raw material suppliers, logistics providers and retailers to enable broader, more circular systems. For instance, reusing production by-products as farming inputs or encouraging regenerative farming methods that naturally recycle nutrients and biomass. Brands should also seek to actively partner with NGOs, local governments, and industry consortia to develop effective waste collection and recycling infrastructure. Viewing waste as a collective resource rather than an individual burden fosters more scalable solutions.
Educate and involve stakeholders
Internally, getting buy-in from employees at all levels is key. Frontline workers often have practical ideas for waste reduction and empowering them to propose and implement these solutions can unleash significant operational efficiencies and innovation. Training and incentivising staff based on sustainability goals can help embed circular thinking into everyday operations. At the executive level, linking sustainability metrics to performance evaluations and bonuses can send a strong message that circular objectives are key business priorities and set the tone for company-wide accountability and cultural change. Remember, early wins in the factory not only save money but build momentum and a culture of circular thinking.
Externally, clear consumer communication and educational campaigns can help foster positive recycling habits. Confectionery producers should make it easy and appealing for customers to participate in circular practices. This can mean clear on-pack recycling instructions investing in consumer awareness campaigns or incentivising participation through reward mechanisms like deposit schemes. Public commitments can further strengthen circular initiatives especially where open communication about goals and progress is transparently demonstrated.
Conclusion
Despite its challenges, the confectionery sector continues to show how circularity is both environmentally beneficial and business smart. Companies that have integrated circular practices report measurable improvements in their organisation’s environmental and sustainability metrics: tonnes of material saved, significant emissions reductions, and stronger connections with consumers and communities. These changes yield financial dividends too. Efficiency gains, operational cost savings and new revenue streams for upcycled products can all strengthen confectioners’ bottom line. Even legacy confectionery brands can unlock significant cost savings by transforming how they design, produce, and deliver their products.
At Farrelly Mitchell, we understand that the various financial and environmental benefits make the case for circularity a compelling one. With a passion for sustainability and ESG, and a detailed understanding of policy and regulation, our consultants possess the expertise to support clients as they transition to a more circular systems. Our circular economy experts conduct comprehensive operational assessments that identify how our clients can cut costs, open new revenue streams and reduce environmental impact. We develop sustainable strategies that are cost-effective and financially feasible. So, if you are looking for expert guidance on how to implement circular principles into your food or agribusiness, get in touch with our agribusiness experts today.
