Good Goods incentivizes New York wine bottle reuse with competitive program launch
21 Dec 2020 --- A new wine bottle reuse program called Good Goods is officially launching in New York City, US, early next year.
Developed by Zach Lawless, the founder of reusable meal kiosk Fresh Bowl, the start-up encourages customers to return their Good Goods-cooperating wine bottles to the point of sale.
Scanning the bottle’s barcode sends a QR code to customers’ smartphones, awarding them US$2 off their next wine purchase.
Current New York retailers participating in the program are Henry’s Wine and Spirits, Gotham Wine and Liquor, The Gilded Grape and The Natural Wine Company, but the start-up is looking to go nationwide by the end of 2021.
Lawless sits down with PackagingInsights to discuss his start-up’s experience with incentivizing consumers to return wine bottles and making reusability competitive and exciting for retailers during a global pandemic.
The scale of the problem
Annually, 4.3 billion wine bottles are sold across the globe. In the US, New York is the third-largest wine-producing state in the country.
However, the state operates on a single waste stream, meaning much disposed glass does not live a second life in its original form.
“The interesting thing we found is when you have something of quality like a glass bottle, there’s like an innate value to the consumer. With glass, people think it needs to be recycled.”
The Good Goods program currently works only with barcodes but is “playing around” with scan gun technology.Standardizing a millennia-old practice
Reuse has been a part of various cultures for hundreds to thousands of years, says Lawless.
“That’s all built around this idea of standardization. Getting farther away from reuse is creating a number of environmental issues.”
The start-up has been inspired by European return schemes, “amazed” at how they’ve created a wide-scale movement enticing consumers to return plastic bottles to points of sale for as low as €0.25 (US$0.30).
One reason for choosing the wine industry was because glass wine bottles are often already standardized to some extent. With Bordeaux bottles, for example, roughly 80 percent of NYC sales come within about ten skews.
The added value results from Good Goods’ data, showing such standardized bottles perform well in terms of sales by participating in the program.
Competing for customers
Adaptability is key to Good Goods’ program becoming widely adoptable. While striving for bottle standardization, the program can be more enticing by giving brands a means of differentiating themselves on labels.
“When somebody returns a bottle of a certain wine, [we want to] change the way a brand communicates to say thanks for returning a bottle,” notes Lawless.
The start-up has also created a weekly dashboard participating retailers can check to see how their sales compare to competitors.
The Monday updates have tapped into an intrinsic sense of competition in the New Yorkers, using raffles and fun giveaways on top of the return system to draw customers across wine store thresholds.
Lawless and his team found US$2 is the sweet spot for incentivizing an optimal rate of bottle reusability.“It showed that in the middle of a pandemic, when people stopped with reuse [practices], a lot of people stuck their flag in the ground and participated because it’s something that’s aligned with what they care about,” Lawless adds.
“That’s a unique part of what we’re doing: creating a program around these products. They’re selling better and people are returning them and coming back to the stores more often. We’re highlighting the benefits of reuse as opposed to the negatives.”
US$2: The Goldilocks reward
In its first piloting months, Good Goods tinkered to get the optimal return value of the wine bottles right.
The financial pressure point needs to sufficiently incentivize consumers to return wine bottles post-use without hurting retailer sales.
“If I tell you I’m going to return your bottle, but you’re not going to give me money back for it, you actually get around 75 percent of people who will return that bottle,” Lawless explains.
However, the lacking monetary incentive could negatively impact sales because consumers will not be inclined to buy another bottle. Customers would return to the point of purchase without engaging in repeat purchasing – a valuable, missed opportunity for vendors.
A US$1 return coupon could alleviate the sales, but not optimally. The inflection point in the wine sector, as Good Goods has calculated, is US$2.
Retailers are not likely to get a much higher return rate at this sweet spot if they continue to bump up the incentive. “Your revenues are about as good as they’re going to get,” notes Lawless.
By scanning the wine bottle’s barcode post-use, consumers can redeem a US$2 voucher per bottle for their next purchase.
Good Goods’ goal is to determine how that curve works in different industries and create a program in which retailers will be more willing to participate if sales within the return system can be more accurately predicted.
“That dopamine hit”
The start-up’s goal is to expand outside New York by 2021. “We’ll focus on the wine and spirits industry for the next three to five years, and then move into other product subsets, such as grocery or cosmetic products.”
Lawless muses about the parallels between reusability contagiousness and the novel coronavirus. “Every person gets a certain amount of people to participate as well.”
The Good Goods’ return system might initially attract eco-apathetic consumers who are only interested in the return bonus.
“But then they start to feel weird when they do it differently and they get that dopamine hit every time they bring it back because they feel like they’re doing something good,” concludes Lawless.
“The more you can get [consumers] to interact with reuse models, the more they’re going to see them as a fun thing they can be a part of instead of a scary thing that seems difficult and expensive. We’re educating them subconsciously.”
By Anni Schleicher
