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Some of the biggest consumer brands are trying out a new way to repurpose packaging. It’s a modern take on an old school model: think of milkmen picking up used milk bottles or recycling glass bottle to get the deposit back.
Last week at Davos, TerraCycle, a US-based waste management company, debuted a new model of recycling, called the Loop, working with global brands like Unilever, P&G, The Clorox Company, Nestle, PepsiCo, Coca Cola European Partners, Danone, and The Body Shop.
It does just as the name suggests: keep “looping” the packaging back to the brand for a refill, instead of throwing it in the bin after just one use. This could be the beginnings of an e-commerce circular shopping system.
Alan Jope, CEO of Unilever, said: “We want to put an end to the current ‘take-make-dispose’ culture and are committed to taking big steps towards designing our products for re-use. We’re proud to be a founding partner of Loop, which will deliver our much-loved brands in packaging which is truly circular by design.”
TerraCycle has been on the business of trash for a decade, recycling waste, and helping brands figure out more eco-friendly alternatives. Despite their successes, Loop required reimagining the current system altogether.
“It took quite a bit of effort to get the founding partners on board: PG, Unilever, Nestle, Mars and PepsiCo as the model requires a major investment of money, time and other resources,” says Tom Szaky, CEO of TerraCycle. “Once these companies joined they set the stage and since then it has been surprisingly easy to bring partners on board.”
He admits that it’s more complicated and costly option right now for brands. But at scale, the cost can drop. Same applies for retail partners like Carrefour and Tesco who were first hesitant to sign, but have been easier to convict after Carrefour pioneered the way, being the first grocery retailer to test out Loop.
Laurent Vallée, General Secretary of Carrefour Group, said: “Loop is a disruptive solution led by a visionary entrepreneur. Carrefour has a strong commitment to eliminating waste and plastic. It was a natural fit for Carrefour to commit to this great project, thus becoming the first player in the retail space to join Loop. We believe our clients are increasingly concerned with unnecessary waste and we expect them to embrace this new solution. We hope other international manufacturers and retailers will join us to adopt new standards and fight waste.”
For customers, the prices for Loop products will be comparable to what they would be normally in disposable packaging. However, customers do have to pay a refundable deposit for the durable containers. In the US, this will vary from $0.25 to $10. This is fully refunded when the empty packaging is picked up, no matter what condition it is returned in, Szaky clarifies.
Rather than build a new brand centered around packaging, Loop wants companies and consumers to pay closer attention to the economics of packaging: the current model incentives the cheapest options. Since compostable packaging is still more expensive, big global brands have been slow to adopt.
“The good news is that in Loop you don’t have to trust our products, as they are already the best brands in the world from Tide to Haagen Dazs, and you don’t have to trust us as a retailer. All you have to do is switch from disposable to durable, which gives you the following profound benefits,” he adds.
With some of this new packaging, there may be some added bonuses: for instance, the metal containers keep ice cream frozen longer and wet wipes, well, wetter. Plus, there’s the obvious bonus of less trash to take out every week. By working with UPS and Suez, TerraCycle can use the same routes UPS does daily to deliver packages to pick up the waste. So no drops to recycling units or additional steps for customers.
The idea was conceived at the World Economic Forum; hence it’s debut there this year. Szaky used the convening of these global brands at this annual event to design the system.
To expand on this vision, Szaky has been raising capital through crowdfunding: over $3 million have been raised thus far. Szaky says they’re also raising capital specifically for Loop, which is owned by TerraCycle Global, and requires a fair amount of capital upfront for brands to innovative new types of packaging and a process of refilling.
The pilots with these global brands will unravel this spring and it’s yet to be determined if customers are as eager as brands to solve the waste problem.
January 29, 2019 at 08:43AM
Forbes – Entrepreneurs