A new initiative by a small company has compelled more than two dozen of the world’s biggest brands to begin testing reusable packaging.
Loop, launched today at the World Economic Forum in Davos, Switzerland, has amassed a blue-chip roster of companies, all of which are piloting a new system of high-quality packaging that can be returned and refilled again and again. In essence, it changes the ownership model of packaging from consumer to producer.
The big question is, will consumers buy into it?
Today’s launch is the product of more than a year’s work by
TerraCycle, the Trenton, New Jersey-based company that made a name for itself by turning hard-to-recycle waste (think juice boxes, coffee capsules, plastic gloves and cigarette filters) into new products. Along the way, the company, founded in 2001, has partnered with major consumer brands, retailers, manufacturers, municipalities and small businesses in more than 20 countries.
Loop is the natural progression of that model, as well as the corporate relationships TerraCycle developed over the years. Its Loop partners include Procter & Gamble, Nestlé, PepsiCo, Unilever, Mars, Clorox, Coca-Cola, Mondelēz, Danone and a dozen or so smaller brands. European retailer Carrefour, logistics company UPS and resource management company Suez are also engaged in the system.
The service will launch this spring in two markets: Ile-de-France, the region in north-central France surrounding Paris; and the New York region, which includes parts of Pennsylvania and New Jersey. Initially, about 300 products will be available in durable, reusable containers, many created especially for Loop.
"The key thesis statement is we can't just recycle our way out of the garbage crisis," Tom Szaky, TerraCycle’s CEO and co-founder, explained to me recently. "We need foundational changes. Our version of the foundational change is: How do we solve for disposability at the root cause, while matching the benefits?"
Loop brings back the old 'milkman model,' where products are delivered to your door at the same time empties are picked up, washed, refilled and readied for delivery to another customer.
Simply put, Loop brings back the old "milkman model," where products are delivered to customers at the same time empties are picked up, washed, refilled and restocked for delivery to another customer. The customer gets the product but the company owns the package.
The reality is somewhat more complex.
Loop initially will be an e-commerce play. Consumers can order goods from the Loop website or that of a partner and have them delivered like traditional products ordered online. But there’s a twist: Customers pay a small deposit for a package that has been designed for 100 or more use-cycles. When the container is empty, customers place it in a specially designed tote for pickup or, in some cases, can bring it to a retailer. They can choose whether they want that product replenished; if not, their deposit is returned or credited to their account. The empties are sent to a facility where they are washed and refilled.
The entire process is handled by TerraCycle, from sale and delivery to package return and cleaning. In effect, TerraCycle is the online retailer, buying wholesale and selling retail. The package remains the property of the brand.
Eventually, Loop will expand to include brick-and-mortar retailers — Carrefour and Tesco in Europe have signed on and expect to introduce Loop products in their stores later this year; a U.S. retail partner hasn’t yet been named. In that in-store version, consumers can bring empties back in a QR-embedded container provided by Loop.
Scratching a niche
The rebirth of reuse has been long coming. Since the dawn of the recycling movement about 30 years ago, companies have tried a number of schemes to enable consumers to use packaging over and over. One plan featured small packets of concentrated liquids used to refill a bottle of household cleaner — just add water to the concentrate and, voilá, a full bottle of a brand-name product. Another approach, refill stores, emerged in cities in Europe and North America, enabling consumers to bring their own container to buy bulk goods. Refill stations also are in traditional supermarkets and in some personal care retailers.
But none of these has caught on beyond a tiny niche. Consumers, outside of a precious few hardcore greenies, don’t really want to be inconvenienced, much as they may be seeking to avoid wasteful practices.
Loop’s approach seeks to overcome those obstacles. The key, said Szaky, is trying to mimic the way consumers already buy, use and dispose of packaging.
We realized that recycling and using recycled content is about trying to do the best you can with waste, but it's not solving the foundational reason we have waste.
"We realized that recycling and using recycled content is about trying to do the best you can with waste, but it's not solving the foundational reason we have waste. We did a lot of reflection on that and realized that the foundational cause of garbage is disposability and single-use. We tried to come up with a way to solve for disposability but maintain the virtues of disposability, which are convenience and affordability."
Szaky explained that his goal with Loop was to make the system simple and familiar. "You get a box at your door with your stuff in it. Though it's better, because your box is durable, and you don't have to worry about recycling all that cardboard."
Similarly on the back end. "We're trying to emulate the way you do your recycling at home. You take your used packages and you either put them in the recycling container or into your garbage bin. And then you lug it down to the curb and your recycling company or your garbage company takes it."
With Loop, consumers put empties in a tote or other Loop-provided receptacle, which is picked up via UPS or another carrier, or dropped off at a retail partner," explains Szaky. "There's no washing, no cleaning required. Just like a disposable object, you throw it back into one of those durable shipping containers you would've received from us." Szaky envisions a "reuse bin" eventually showing up in homes alongside garbage and recycling bins. "And when we pick up, you have the option to have it set to auto-replenish, so that you can actually make your shopping even easier, because your empties trigger your re-orders."
Counter-worthy
Part of the magic of Loop is reusable packaging, designed in partnership with the brand owners to be not just durable, but "counter-worthy" — attractive enough to keep in plain view, in the words of Virginie Helias, vice president and chief sustainability officer at Procter & Gamble. "You want to show it to your friends." But, she adds, the appeal is not just aesthetic: "It's also the fact that it's a better premium experience for people."
For P&G, that meant designing new packaging for the Loop platform. And, in some cases, inventing new products altogether.
For example, the company developed a toothbrush called Click, part of the company’s Oral B line. "It's basically a new design that reduced the plastic by 60 percent because you have a durable handle which is made of composite material," explained Helias. "And there is a mechanism which we call Click Fits, which allows you to detach the head from the handle."
A Loop tote for delivering products to consumers.
Procter & Gamble, Loop’s biggest partner, which also owns a 2 percent stake in the enterprise, has tapped into 10 of its most iconic brands as part of the Loop launch, including Ariel, Cascade, Crest, Febreze, Gillette, Pantene, Pampers and Tide. "What was great to see was that most of our P&G categories were actually highly relevant for people in terms of having durable packaging," said Helias.
Unilever, another Loop launch partner, is putting eight of its brands into the Loop platform, including Rexona, Dove and Axe deodorants; Signal toothpaste; Häagen Dazs ice cream; and Hellmann's mayonnaise.
With the company’s deodorant brands, "The base of the stick packaging is now made from stainless steel. As you use the product, there's an insertable refill where you then give that back to us and then we send you a new one," explained David Blanchard, Unilever’s chief R&D officer.
Like P&G’s Helias, Blanchard used the word "beautiful" repeatedly in our conversation to describe the company's various reusable packaging innovations, made from glass, aluminum, durable plastics and other materials. For example, regarding the deodorants, he said, "It's a beautifully crafted piece of packaging."
Another Unilever innovation is Signal tooth tabs, an alternative to toothpaste. Essentially, it’s a small tablet of tooth powder you "chew, brush as usual, then rinse and smile," Blanchard explained. "We're creating a whole new format in a fully recyclable and refillable jar, so you get zero packaging, zero waste. It uses less water because of the way in which you simply put the product in your mouth and then clean and rinse."
Will consumers buy in?
No doubt, Loop is a well-designed system with a compelling offering and a powerhouse line-up of brands. But one key question remains: Will consumers buy in to reuse?
It’s no small concern. Consumers — in Europe, North America, South America and Asia — repeatedly have foiled efforts by brands large and small to create products and delivery models that reduce waste, energy, water and other resources. In some cases, they believed that products were inferior or didn’t perform well. In others, the higher price was a barrier, and still others lacked the convenience of their conventional version. In many cases, consumers couldn't be bothered to change their well-worn habits.
Szaky and his corporate partners believe they have thought through such pitfalls, although the Loop system hasn’t yet been tested in real-world settings.
Szaky and his corporate partners seem to have thought through many of these downfalls, but the Loop system hasn’t yet been tested in real-world settings.
Clearly, Loop’s big brand partners believe that their individual and combined efforts can break through. "It addresses a clearly growing expectation from people," says P&G’s Helias. "When we ask people about what's important for them, packaging now becomes intrinsically important. And the frustration with other packaging is becoming very close to other factors that we are hearing about in our studies."
Unilever’s Blanchard agrees. "We think that about 25 percent of consumers today are looking to buy brands that have a more sustainable footprint or clearly have a purpose that resonates with them from a broad environmental sustainable purpose point of view. And then, there's probably another 50 percent of consumers who are then increasingly looking for brands to have that point of view or that sustainable footprint."
There’s also comfort in numbers, he says. "We've looked at reuse in France. We're looking at a refill type of system in Vietnam. And we've not yet really cracked that business model. What Loop offered was the opportunity to be a part of a bigger consortium where consumers will get a much broader range of products. And therefore it gives them an opportunity to really do this with a bit more scale."
Helias believes the reuse model has other benefits beyond the environmental ones. "You obviously develop a very intimate relationship with the consumer. And you build loyalty. It is all about enabling and inspiring responsible consumption, which is kind of our core agenda at P&G. And this addresses it beautifully. This is why we have so many brands excited about the idea."
P&G, Unilever and the other partners will be watching the forthcoming launch closely, trying to discern what works. "I think the most important metric will be the depth of repeat," said Blanchard. "Do consumers come back to using these products time and time again? We would typically look to find at minimum a 50 percent repeat rate, so that half of those consumers over a period of time come back to use the product at least once, if not two or three times."
And, of course, there are the environmental metrics. "It takes five Loop cycles of fill and reuse to be better from an environmental standpoint," said Helias. "We hope can go way beyond that but that's exactly why we are testing in market. It's to validate that assumption."
Tom Szaky, for his part, is already looking ahead. "The next category, when we're ready, we want to test things like baby clothing and baby toys. We think there's a really good opportunity for this in what we call disposable durables. That's going to be a key question for us: How far and wide can this go?"
Loop's new recycling program hopes to eliminate waste altogether.TERRACYCLE
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.”
Reusable containers with glass and metal would substitute cheap disposable packaging.TERRACYCLE
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 refillng.
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.
