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?"

Dozens of major brands have partnered to launch this ambitious new packaging model in the U.S. and France. TerraCycle and Suez break down how it could change the waste equation in the coming decades. After years of quiet planning and rigorous testing, TerraCycle has unveiled what it believes will be a revolutionary change in packaging: Loop. Debuted at the World Economic Forum in Davos, Switzerland this week, the new shopping system is the first of its kind to offer hundreds of name brand products in reusable and refillable packaging. In addition, many products traditionally viewed as inefficient to process — pens, diapers, razor blades — will now be recycled for the first time in many areas. This builds on the New Jersey company's foundational business of finding value in what is considered unrecyclable — but on an entirely new level. Designed to be more attractive and functional than common versions, these new goods will be available on a pilot basis in the U.S. and France, starting this spring. With the convenience of delivery and pick-up service via online ordering — and eventually at retail stores — Loop is being billed as a rare opportunity to wean consumers off single-use disposability. "The thesis of Loop is we want to bring about the future of consumption, and the tenet of that would be the idea that waste doesn't exist," said TerraCycle CEO Tom Szaky in an interview with Waste Dive.  

 

A new consumer culture?

Procter & Gamble and Nestlé (both founding investors) — along with PepsiCo, Unilever, Mars Petcare, The Clorox Company, The Body Shop, Coca-Cola European Partners, Mondelēz International and Danone — are among the initial partners that have designed new packaging for Loop. Achieving this level of participation from the companies behind so many household brands was seen as essential for consumer buy-in. According to Szaky, a key component is elevating the experience of reusable shopping (beyond its current niche version of bringing mason jars and cloth bags to a local bulk store) through added convenience and an element of "luxury." Prices are expected to be comparable to current options aside from a refundable deposit, and many containers are made from glass, stainless steel or durable plastic. Some, such as a new Häagen-Dazs container, will even keep products frozen or fresh for longer. As envisioned, this system will start out as a delivery/pick-up service — something Szaky has previously described as akin to the old "milkman" model. UPS will deliver the products in reusable shipping bags, and once consumers are done, transport the bags to a regional cleaning facility, where containers will be sanitized and products recycled. This is said to be the first time feminine care products and diapers will be recycled in France, and the first time for razor blades in the U.S. "There are some big firsts baked into Loop, and that's really using a lot of TerraCycle's original competency. If it's reasonable to recover and reasonable to reuse, then it must be reused, is the rule," said Szaky. The pilot program is expected to launch this spring in the Paris metro area and the New York City area – including parts of New Jersey and Pennsylvania. French retailer Carrefour has signed on as a partner, and a U.S. retailer is in the works. While the initial list of participating companies have had to make upfront investments in new packaging design (though on a limited scale to start), the ability to meet both consumer demands and sustainability targets is seen as worth the price of admission. A spokesperson for the French unit of Coca-Cola European Partner (CCEP) told Waste Dive it sees a way to expand existing refillable glass bottle sales and "bring this unique experience directly to consumers at home in line with a no waste vision and our sustainability strategy." Loop is considered a clear fit for CCEP's "This Is Forward" plan — part of Coca-Cola's broader "World Without Waste" initiative  to ensure all packaging is recyclable and fully recovered by 2025. Other major partners — including Procter & Gamble, Nestlé, PepsiCo, Unilever and Mondelēz International — have set their own future sustainability targets or made financial commitments to recycling initiatives in recent years. While these pledges have often been met with skepticism from major environmental groups, it's possible this Loop announcement may be perceived differently. Szaky noted that eight of the 10 companies on a 2018 Greenpeace list of the most commonly found brands in ocean clean-ups are Loop partners — a potential signal of their willingness to take more ownership over plastic pollution. Greenpeace itself is also participating in the Davos launch event.  

 

A world without "garbage"

Loop might be an easier fit for regulatory trends in European countries that encourage more recycling (though it will be exempt from extended producer responsibility rules), but it could prove a greater shock to the U.S. system if scaled successfully. The most directly affected parties will be packaging manufacturers — glass, for instance, might see more demand, while single-use plastic demand could decline. The potential decrease in tonnage for both waste and recycling collections also raises questions of what Loop will mean for the U.S. waste and recycling industry itself. "I'd say at the very beginning, if I was working over at Republic or Waste Management or even Waste Connections (Waste Connections owns a quarter of our Canadian company) I think they wouldn't even see this as a threat because it would seem super small compared to what is in the dumpster," said Szaky. "The real question is 10, 20, 30 years from now, if durable, reusable, repairable, that type of movement really hits scale — and I think Loop could be one of the vehicles that accomplish that — then you may see an effect on the loads, and unless you get involved in that, then you would see it competitively." Last year, Waste Connections CEO Ron Mittelstaedt told Waste Dive he believes "reuse is the pathway that will help diversion by non-generation" in future decades, although he didn't directly mention TerraCycle. No U.S. waste and recycling industry companies have invested in Loop to date. Suez, the France multinational that has a stake in TerraCycle's European operations, invested 4% in Loop. The company also partnered with Procter & Gamble and TerraCycle to launch a shampoo bottle made of ocean plastic at Davos in 2017. Jean-Marc Boursier, senior executive vice president of recycling and recovery at Suez's Northern Europe division, feels the concept fits into his company's view that increasing waste volumes can't be the primary corporate growth metric. According to Boursier, rising GDP, industrial activity and population growth should all be considered signs of a healthy economy — but that doesn't necessarily have to translate to more waste. "The question is, can we optimize waste production, and do we need to still dump everything into a very large landfill?" said Boursier, referring to the U.S. market. "Or, shall we consider waste as not only a nuisance, but as a product that we could transform into something more valuable?" Boursier declined to offer any direct advice on how U.S. service providers that still derive a significant portion of their revenue from landfills could adapt to such a model. Speaking about companies in general, he offered this outlook: "Either you enter — if you have an industrial company — into this world of circular economy with a negative view, where you believe that it is a constraint and it might have some increased costs at first glance. In which case you will be very reluctant to change the world — and we need to change our way if we are going to protect the planet," he said. "Or you take the lead and you try to differentiate yourself positively." Boursier sees Loop as a way for big brands to do that, adding that while it's too soon to know the full potential, "I believe it can change the world."  

 

Next steps

After the first two pilots launch this spring, Loop is expected to expand into the London area in late 2019 with retailer Tesco. Toronto, California and Tokyo — in conjunction with the 2020 Summer Olympics — are on tap for next year. According to Bloomberg, the company has invested an estimated $10 million in this concept. Asked how he sees this growing as part of TerraCycle's business, Szaky noted that the timeframe might be long, but the change will be apparent when the company's market share in a given area shifts away recycling disposable products to durable ones. Based on life-cycle assessments, consumers will need to reorder products upward of five times for the environmental effects to even out. Watching how many repeat participants Loop can attract, and at what scale, will be key to tracking its progress. In the meantime, Szaky is also still looking for acquisition opportunities in specialized waste streams — such as the 2018 purchase of light bulb recycler Air Cycle — and remains open to a scenario in which TerraCycle's core business of recycling challenging materials shrinks as Loop grows. When asked if the long-term plan was to still file for an IPO once the company approached $70 million in revenue, Szaky replied: "It absolutely is, and Loop just helps us get there faster."

Waste is a human invention and does not exist in nature. Prior to WWII, consumable products were delivered in reusable containers, goods were purchased in small markets or produced locally, and durable materials allowed for repair and reuse. Nothing went to waste. But with the rise of cheaply mass-produced plastics, increased levels of consumerism, and planned obsolescence in many products, our modern culture now creates waste on an unsustainable scale.

Last night around 500 executives from across the green economy gathered at The Brewery in central London for the BusinessGreen Leaders Awards. It was the most competitive year yet with all the finalists securing praise from the judges. But the winners and highly commended entries were:

We have a long history of sustainability at P&G. This is not new to us and not a band wagon we jumped on. We lead by example be it through a new innovation that has the potential to revolutionize the plastics recycling industry, working with partners like Suez and TerraCycle to bring the world’s first bottle made from recycled beach plastic, to making significant contributions to help reduce climate change through our quick and cold cycle laundry detergent.