Catherine Weetman talks to Tom Szaky, founder of TerraCycle and Loop. Tom tells us how the Loop reusable packaging platform is bringing the convenience of prefill to high streets everywhere. TerraCycle and Loop are tackling the root causes of waste, including single use and disposable items.
We hear why they chose prefill, and why reuse needs to ‘feel disposable’. Tom explains how they are helping big brands and retailers to make the business case, feel confident about moving forward, and scale up from pilots to in-store roll-outs.
We hear why both profit and purpose are essential, and Tom describes the progressive steps in TerraCycle’s evolution. The next step, with Loop, is how to tackle one of the root causes of waste – single use and disposable items.
TerraCycle and Loop have evolved by being clear – forensically clear – on the most convenient solution for the customer, AND for the brands and the retailers. That convenience has to match or improve on the convenience of the current, disposable system. As Tom said, ‘reuse needs to feel disposable’, and for the last few decades, disposability has won out over frugality and greener options that need more effort.
Prefill was chosen, rather than refill, because it provided the widest breadth of opportunity, and because prefill systems have been around, successfully, for centuries. TerraCycle looked at those systems, and worked out how to evolve them for a retail supply chain.
The TerraCycle team thinks carefully about how to scale up, what brands and retailers need to see before they can build the confidence to move forward, and create the business case for investment.
Podcast host Catherine Weetman is a circular economy business advisor, workshop facilitator, speaker and writer. Her award-winning book: A Circular Economy Handbook: How to Build a More Resilient, Competitive and Sustainable Business includes lots of practical examples and tips on getting started. Catherine founded Rethink Global in 2013, to help businesses use circular, sustainable approaches to build a better business (and a better world).
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Links we mention in the episode:
- A Circular Economy Handbook: How to Build a More Resilient, Competitive and Sustainable Business – buy from any good bookseller, or direct from the publisher Kogan Page, which ships worldwide (free shipping to UK and US) and you can use discount code CIRCL20 to get 20% off. It’s available in paperback, ebook and Kindle. If you buy it from online sources, make sure you choose the new edition with an orange cover!
- Sign up to get the podcast player and shownotes for each new episode emailed to your inbox
- Tom Szaky on LinkedIn https://www.linkedin.com/in/tomszaky/
- Instagram and Facebook @chooseloopuk
- Twitter and LinkedIn @chooseloop
- Recommended guest – Paul Hawken, founder of Project Drawdown, and co-author of Natural Capitalism, Drawdown, and Regeneration https://paulhawken.com/
- Episode 66 Alyssa Couture – Healthy Fashion is better for all of us, and our planet https://www.rethinkglobal.info/episode-66-alyssa-couture-healthy-fashion-is-better-for-all-of-us-and-our-planet/
- Episode 42 – Brian Bauer of Algramo – solving the ‘poverty tax’ with reusable packaging https://www.rethinkglobal.info/episode-42-brian-bauer-of-algramo/
About Tom Szaky
Tom Szaky is founder and CEO of TerraCycle, a global leader in the collection and repurposing of complex waste streams. TerraCycle operates in 21 countries, working with some of the world’s largest brands, retailers and manufacturers to create national platforms to recycle products and packaging that currently go to landfill or incineration.
In May 2019, TerraCycle launched Loop, a circular reuse platform that enables consumers to purchase products in durable, reusable packaging. Loop is available in France, the UK, Canada, Japan and the 48 contiguous U.S. states, and is a key step in helping to end the epidemic of waste that is caused by ‘single-use’ consumption. In 2022, Loop will become available in Australia.
Tom and TerraCycle have received hundreds of social, environmental and business awards and recognition from a range of organizations including the United Nations, World Economic Forum, Schwab Foundation, Fortune Magazine, Time Magazine and the U.S. Chamber of Commerce.
Tom is the author of four books, “Revolution in a Bottle” (2009), “Outsmart Waste” (2014), “Make Garbage Great” (2015) and “The Future of Packaging” (2019). Tom created, produced and starred in TerraCycle’s reality show, “Human Resources” which aired on Pivot from 2014-2016 and is syndicated in more than 20 foreign markets on Amazon and iTunes.
Provided by AI – approximate timings for the finished episode
Catherine Weetman 03:05
Tom, welcome to the circular economy podcast.
Tom Szaky 03:08
Thanks for having me.
Catherine Weetman 03:09
It’s great to see you today. And you’re one of the pioneers starting a circular business way back in 2001. So I’d love to start by asking a bit about your background and how you got here.
Tom Szaky 03:21
Yeah, absolutely. So, you know, I’m originally from Hungary, born in Budapest. And that’s only really relevant because back in the early 80s, I was born in 82, was still communist at the time. And Chernobyl happened in 86. My parents were able to escape with me as four years old, and we landed as refugees in Germany that fall in Belgium. And then finally, Canada. And I mentioned this because I went from effectively communism to capitalism, fell in love with entrepreneurship. Probably for more ego centric reasons, you know, like fame and fortune pursuit, I found that was a easiest ticket for me to, you know, to, you know, to those more, you know, personal dreams. And I had this big turning point, to be honest, you know, in my first year of university, I was down in the US at this point. And when they were teaching business, you know, one of the ways they taught it was that the purpose of business is to maximise profit to shareholders. And, you know, I had a fundamental problem with that, because, you know, today when I say talk at schools and universities and ask students, what’s the point of business they never say an answer like that. They say, it’s about making the world better or society better or somehow solving the problem and improving but the, but the way business interacts today is it’s it’s, it’s, that’s nice, but the fundamental purpose is profit to shareholders. And I wanted to sort of reevaluate the purpose of profit in my mind, and I sort of see it as a very important thing, but as an indicator of health, right? If you’re profitable, you’re going to flourish and grow. And if you’re not profitable, the opposite will occur. And and so I wanted really desperately to sort of think about business models that put purpose first and then can do so at a profit. So can’t flourish and grow. And that started a lifelong fascination with waste. Because garbage is a huge, purposeful issue, you know to solve, right? It’s a big problem. But there’s, you know, it’s also devoid of innovation, perhaps because it is literally smelly, nasty, gross, and we avoided, even professionally avoided. And there are so many interesting ways to elevate or eliminate waste that can be done in a for profit context. And so that’s been how TerraCycle began. And you know, that’s been 20 years. And now we’re about 600, team members across 20 countries doing this, this work.
Catherine Weetman 05:38
Wow, that that’s expanded really impressively hasn’t it. And when I was doing the research for the podcast, and looking at the website, for what Loop was doing, which is what we’re going to focus on today, then the mission statement on the Loop site, outlines the challenge that we all face, highlighting the proliferation of single use products enabled by marketing campaigns that define them as a transformative modern convenience. So we’re all kind of you know, being convinced that convenience is the most important thing. And from that, we’ve seen exponential increases in single use products over the last few decades. And that’s now led us to this to where we are now, which is a global waste crisis that threatens our oceans, our ecosystems and human health. So there’s some powerful stuff there. In that mission statement, and you’re pointing out that today, less than 10% of all single use packaging is recycled. So that leaves the remaining 90% in landfills, incinerated or discarded, and then ending up ultimately in our oceans. And we’ve you know, we’ve seen the pictures of that. And we know it’s not just about fish swallowing plastic, it’s all the microplastics and the chemicals leaching out of those micro plastics and much worse. So I guess the inconvenient truth is that we can’t continue using and disposing all of those highly convenient single use items. So so how, how did the idea for loop evolved from all of those issues?
Tom Szaky 07:08
Yeah. So you know, the journey of how loop came to be, you know, started and how it loop is Tara cycles, third division. So it’s important to think about the context of how we evolved, because loop is the next progressive step in our evolution. So we first began by saying, how do we move from linear take, make waste systems to more circular ones. And the first step was, how do we figure out how to collect and recycle anything that is not recyclable. That’s not necessarily fully circular, but it starts bending the the linear system into into a slightly more circular. And what we realise there is that what makes something recyclable is whether a local garbage company can make money recycling that object. And what makes something not recyclable is the inverse, that it would cost more to collect them process than results are worth. And the challenges is it’s getting worse, you know, oil prices are low, relative to where they were five years ago. And markets are more difficult to access, many countries stopping the importation of waste, which they did for very good reason. But it also still does hurt recyclers who used to export you know, around 40 50% of their waste to these markets, who paid for it. And then the third is, and this is the most important is that the quality of our waste, visibly how profitable it is for recyclers to recycle is diminishing. Because as products become lighter and cheaper, there is objectively less value to recover. And that’s this big challenges of, of disposability. What disposability brings about, is phenomenal convenience, and affordability, which are major virtues, right? These are things that are very important, you know, to access things cheaply. And in a convenient way, those are probably the two biggest drivers of how we use products. To make things cheap and convenient, we typically take value out of it, which makes it fundamentally less exciting for recyclers to bother even trying to recycle, because there’s just less value. So that was the first sort of part. From there. We said once we got that going, Well, now let’s work on companies integrating waste into their products. So they’re not just making sure their product is recycled, but that they’re also a demand for recycled materials because you need both. And that’s sort of what became the TerraCycle business and grew. And then we had, you know, maybe four years ago, a big thing and ask ourselves, is that enough? And we realised recycling is an imperfect solution to waste. It’s a bandaid. And it’s an imperfect solution, because you’re still managing waste. It’s perhaps the best way to manage waste. But it’s not a you’re not solving the concept of waste, right? You’re not eliminating the idea of waste. You’re just managing the problem. And so we then took a think on well, how do we get a step deeper and solve for the idea of waste, right? And so there we landed on the root cause of waste, we believe is this concept of single use or disposability. Those are somewhat synonymous. Those came about in the 1950s. Before then, you know we’ve cobbled our shoes We mended our clothes, we bought milk from the milkman and all the derivatives thereof. And as we looked at reuse, we then evaluated you know what is going on in reuse, right and what’s happening. And we looked at there’s many ways that that we use models can exist today, you can have refill stations at stores, you can buy, concentrate and fill at home, you know these models. But then when we look at what is the biggest scaled we use system in the world today, we realise that it’s prefilled, like products that are already full, ready to purchase. Those are the biggest scale system, it’s Canadian beer. It’s German beverages, it’s even here in the US propane tanks and beer cakes. And this then led to the what’s the macro challenge in the reuse economy is that every reuse apparatus, whether it’s a refill station, or concentrate, or pre fills are what you would call mono supply chains. In other words, you got to take the beer keg back to the beer store, you got to take the propane tank back to the propane tank store, you got to remember to go to that refill station for that product. And it’s not scalable. Like one of the nice things about disposability is your garbage can doesn’t care where you bought the object, your recycling bin only cares if that bottle is recyclable, it doesn’t care what was in it, or where you bought it. And that’s what we felt we use needs the platform for reuse, that effectively enables a simple idea, by anywhere, return anywhere, for as many types of products humanly conceivable. And that really is what loop is trying to achieve is to is to be that platform, where any brand can participate, traded reusable version of their product from orange juice to laundry detergent, and any retailer can can make that available, you know, to their consumer. And the consumer can simply you know, buy it at McDonald’s and return to a Tesco.
Catherine Weetman 11:43
Yeah, that’s a really, that’s a really interesting way to look at it to kind of look at look at these prefilled systems and how convenient they are. But there are limitations around the single supply chain as you say. And that’s not something I’d I’d kind of thought about the kind of nuances between just taking any old empty container and then having to fill it versus just you know, dumping the empty container and you know, grabbing a fresh one prefilled, as you say, from the from the shelf. And so when I read first read about the the US launch of loop, I noticed the solution involved home delivery of the products in the loop containers via a parcel courier. And then once you’d finished, you presumably use an app to say, you know, this needs refilling, and then you schedule a delivery. But in the UK, the model there’s refill stations in Tesco stores, and I think in France, it’s at Carrefour stores, is that right? So it’s a slightly different model. So is this an evolution of the offer based on how customers have interacted with it so far? Or is it about different models for different demographics or cultural patterns?
Tom Szaky 13:02
It’s a very good question. And I would say to answer a Backward Loop is now live in Japan, France, UK, US and Canada. And soon lunch in Australia. And we’ve seen no difference in cultural approaches, right. So it’s actually pretty synonymous how consumers behave in all these markets and what drives them. Now in all countries, including the UK and France, we started as an online learning model. So the way we launched in the US is exactly how we launched in France in the UK, where the retailers and the brands wanted proof right that there is consumer appetite before they would invest into making this physically in store and put all that commitment against it. So we launched loop store.com in the US and then UK, France, Canada, Japan, and learnings were very similar. They were all very positive that basically showed consumers care and they’re willing to do it. And so what has happened then in all markets is that the retailers like Tesco in the UK, Carrefour and France and others have now gone in store. And as they have done that we’ve been able to close down these online learning platforms. And we’ve already done that in France and all of them will be closed down by the end of this year as they make way for consumers being able to access the loop system physically in store. Now just one clarification there are no refill stations. If you go into a Tesco you’re going to see a shelf of about 100 products from tomato ketchup by Heinz to personal by Unilever you know you name it, even private label products in prefilled containers you buy those you pay a deposit you and then when you’re done, you can deposit the empty dirty containers back into a loop in and get your deposits back. And then from there we clean and it gets refilled and sold to someone else. And that’s really the model that is scaling now all over the world. Now some of these retailers may choose to also make it available online and some have but it seems like the appetite from retailers is really to scale the in store version only because is still the majority of how people shop for the groceries? Is it in store environment?
Catherine Weetman 15:04
Yeah, I guess there’s also the potential attraction of having the loop stations in the loop store in within the store. Increasing the footfall within the store. Because as you probably no in the in the UK, I don’t, I don’t know how it works in other countries, but in the UK, we’ve ended up with a online supermarket delivery model that loses money for the retailers because they don’t charge for it. So, so yeah, they kind of need to bring people back into the stores. So yeah, that’s, that’s, that’s interesting. And, and you’re right it is, we do need to think about it differently. Because there are these refill stations where you take in your own packaging, and you refill bulk, pasta, rice, whatever. And, and then other ones with the ecover and other and you know, sort of household products where you take in any you know that that packaging or any similar packaging, as long as it’s the right size, and refill your laundry liquid and things. And that’s a different model, isn’t it?
Tom Szaky 16:10
Well, and just to build on that, if I may, like what’s quite exciting about the to you like he Kover, as you’ve described, is a great brand example where they’re doing all three modalities of reuse. In some retailers, you can see over refill stations, and they’ve been a pioneer at this in I think they also do where you can buy concentrate or some form of bulk and fill it at home. And then they’re also doing loop which you would call pre fill. Now, as a platform, our goal is that you can with loop interact and all three of those and flow through them without any inconvenience. So perhaps you go to, let’s say, one of the retailers that’s doing eco refill stations and buy, buy a bottle there, fill it at the refill station, maybe then you go home and then you empty it out there, clean it and fill it up with some concentrate. And then maybe after you’ve done that a few times, and maybe it’s a little gunky, and you know and you’re not quite happy with the bottle, you can go to Tesco and drop it in the loop and get your deposit back. And maybe when you’re there you buy one already filled of the set. And you can then you see this idea of like we have to see here’s the problem. I think disposability is vilified, rightly so for all the environmental challenges, you know that we’ve you know, that you mentioned earlier in our discussion, and rightly so. But we cannot just rest that we have to move away from disposability, because there’s all these problems. It’s really important to empathise and honour the virtues of disposability, which is this phenomenal convenience and affordability. And disposability has won, whether we like it or not, it has one and it beat frugality. And you know, and all the things that are not per se as convenient or affordable. So for reuse to have a chance. We can’t just vilify disposability and ask you to do reuse on those virtues alone. We need to say we can match convenience. And we can make it as easy as throwing something away. So for example, that loop our mantra is we want reuse to feel disposable. It’s so important, because that is a key virtue, right? Not to be destructive like disposability, but to feel like disposability. So as an example, in Tesco, you can buy a loop returned back, this is like a reusable bag that you can put in your rubbish bin. And it looks like like a like a rubbish bag. You throw all your loop items in there, whether it’s your McDonald’s coffee cup, or your whatever your tomato ketchup. And then when that bag is full of a bunch of dirty empties like a rubbish bag, you can take the whole bag, chuck it into the return point for loop at Tesco, and you’re done. And you get all you know, we open the bag, we count everything inside, we return your deposits. But you see it feels like a waste experience. And that I think is really important because the more we make the consumer work relative to disposability, the fewer people we’re talking to.
Catherine Weetman 18:55
Yeah, I think you’re absolutely right about you know, making it pretty much as easy. And the way the way you described in the sort of long term example of the you know, the bag there, that pretty much is as easy. All you got to do is remember to take the bag with you and you go to the supermarket. And yet it helps the the person feel that they’re doing the right thing by making a tiny, a tiny change to their habits. It’s not a it’s not a big deal so much easily and an easier sell to anybody in the family who’s who’s less enthusiastic about recycling then the kind of, you know, the the main driver of changing changing the model. And has anything else surprised you about customer behaviour and the way people are interacting with this?
Tom Szaky 19:42
Absolutely. So, first just to re emphasise the earlier question is that there isn’t differences between the British or Japanese or Canadian consumer. It’s actually surprising I thought there would be and it’s like so the same. Another interesting piece is that the person like the value consumer, so But who really cares about the price of their content will care in reuse about the price of the ketchup per ounce or the shampoo per ounce. But you know, what they don’t care about is the price of the deposit. Very interesting that there is very little sensitivity there. And so that means that you can invent very, you know, fantastic packages that do amazing things, and may have new features and benefits to them, versus just the, the, the, the the benefit of it being more sustainable. So that’s actually quite exciting. And there isn’t deposit anxiety in on a per bottle basis, or in the aggregate, that’s a really powerful. Now, what’s also interesting is why do people purchase, and I think this is another important lesson to any sustainability practitioner, whether you’re trying you know, to implement a sustainability project or your whole life is dedicated to like, you know, pushing sustainability is the why now, I thought people would buy it because sustainability, we usable, it’s why we created the platform. But it’s only one of three reasons that they buy. And the other two are equally important. The second reason Oh, and by the way, this sustainability message is more important to women than that, measurably more important. Now, the second reason people buy is because the packaging is more beautiful, more aesthetic, more luxurious, those are, that’s a selfish benefit. But nevertheless, that is a major reason to move to reuse, because now your laundry detergent is in beautiful stainless steel and not disposable plastic, and that it has aesthetic, sort of higher quality material, better touch, you know these things, but those are personal benefits, nothing to do with the environment. And the third, more indexing and food and beverage, is people perceive that reusable packaging, because it’s, you know, usually glass and alloys and less so plastic is healthier for them. And isn’t that interesting that the second two reasons people buy are entirely personal. And it’s, you know, it shouldn’t have surprised us because it’s the same thing that happens with organic food. Right? Why was the organic food movement created? I would presume to help the birds and the bees and the butterflies. Right? It was for that reason. But why do people buy organic food? It’s entirely for human health, which is the most internal selfish reason to purchase? You know, and it’s the number one and almost only reason people buy organic food is that they perceive that, and I think they’re right, that it’s healthier for them. And it’s not even why the movement was created. So the lesson here is, let’s accept that. That’s how people think. And let’s play into that. Right, which will then allow us to bring about more innovation and sustainability than hope that people are actually better actors than they are.
Catherine Weetman 22:35
Yeah, that’s, that’s really interesting. So just to clarify that the number one reason is because it’s more sustainable. And then two was beauty. And three is the health of the packaging. And I think that all
Tom Szaky 22:46
equal all equal. Okay, it’s not that sustainability is number one, it’s the three major reasons okay. And they all are about equal weight.
Catherine Weetman 22:54
Okay. Yeah, that’s really interesting. Particularly, I’m particularly interested in the perception of the packaging being healthier. And I think that’s translating into other spheres. The last podcast, I think, that I published was by the author of a book about healthy fashion, which was looking about how they’re looking at what fibres we’re putting in contact with our skin, and why some, some fibres would be much healthier for others, and then kind of looking at other other aspects of what that means for the for the planet, and for the farmers who are growing those both in terms of physical health, but also the health of their businesses and resilience and stuff. So yeah, that’s some really nice exploratory themes emerging there. So I think we’ve we’ve talked about how the loop, various models work and how they all interface together. And he talked about the deposits and the deposit costs not being a barrier. But when Luke first launched here, and it was featured on BBC, I think it might have been the presenters kind of kept coming back to the the value of the deposit, and that seemed really expensive. So if if you are coming across those kinds of objections, how are you countering those, how are you getting people to see it differently if they think it’s, you know, this is so much this is so expensive compared to the value of the product inside?
Tom Szaky 24:25
It’s a very good question. And in fact, we have deposits that were or like, for example, Clorox wipes in the US, the deposit is $10. And the wipes are only $4. So there’s even situations where the deposit is multiple times the content. Now, the first thing I would say is the data speaks for itself. Consumers have voted and have said that they are not sensitive to deposits, and I believe they’re not sensitive for two reasons. One is they get the money back in full. Let’s just be it’s not a payment. It is literally a deposit, right, you get the money back in full. But the other is that it’s a really good deal. So let me give you an example. The McDonald’s coffee cup I that mixologist using in the UK for loop is a one British Pound deposit. Right? It’s a, you know, one, one, that’s $1 equivalent right? Deposit. But if you bought this cup empty, say on Amazon, the identical cup, it would be $10. So what a deal, right? If you decide to keep it now mind you 50% are coming back. And some people, I think I can keeping the one I have because it’s now my coffee cup on my desk. But I just saved 90%. If I bought it empty, we were making a joke with the team at BrewDog, who who does beer in the Tesco launch and they have this beautiful growler with like a, you know this like tap that you can put on and off very, very easily. If you bought that growler empty, like no beer inside just empty, it would be more expensive than the growler full of beer purchased on the shelf of Tesco. And that’s the entire point is that when people are selling empty containers, whether an empty growler or an empty, you know, coffee cup, there are different profit margin requirements for the retailer. And then as such, like a water bottle, you know, empty could be $20. But when the deposit is set, and McDonald’s is selling you coffee, or BrewDog is selling you beer, they just make sure the deposit is a little more than the cost of purchasing the package. And so their margin requirements are significantly more modest. And so you can get a phenomenal deal. And you don’t want it when you’re done. Give it back and you get your money back.
Catherine Weetman 26:32
As fascinating. Yeah, it’s it’s really interesting, isn’t it? How the price dynamics work? And yeah, I think there’s probably some question marks around the profit margins for you know, what, what people are considering, as, you know, eco choices or green choices in inverted commas that, you know, perhaps there’s still a perception that people will pay vast amounts for reusable, reusable cup, you know, just because it’s now becoming the thing to do. Yeah. And so is in terms of the evolution so far of of the loop system and the three methods? Do you see it fitting into an option where people could bring their own containers? Or will you stick to just having the loop branded containers that you’ve worked with the food companies on?
Tom Szaky 27:28
So as I mentioned earlier, right, there are three what we would call modes or modalities through which one can experience reuse and those bucket into refill stations where you bring your own container. Concentrate where you have your own container at home or tablets, I’m sure you’ve seen this with window cleaner, you know, you get a tablet you diluted at home or soaps, you can do that. And then prefill, where the container is already filled, ready to go. Now, Luke wants to make sure that the first two modalities can interact with anything and prefill. But we are laser focused on prefill as the approach and we are because of two reasons, it has the widest breadth of opportunity on it. So many things cannot be concentrated. Like how would you concentrate a frozen pizza, or concentrate? You know, latex paint, right? There’s many things that just simply cannot be concentrated, there is many things that are not appropriate to, to go through could not or would not be appropriate to be dispensed through a refill station, right? Alcohol, probably inappropriate to dispense through a refill station or anything that like interacts with oxygen, because in the refill station, you’re gonna have a moment of oxygen, right. And many things need to have the oxygen prevention, there’s many other examples where refill stations wouldn’t be appropriate. So for width and breadth, we have gone to and really focused on on on what you would call prefilled. Because you know anything from insect repellent, all the way to you name it motor oil can go into pre film, that’s one reason. The second reason is that it’s the most convenient for all the actors, which are the brands, the retailers and the consumers, it is the most like disposable consumption, you buy it, you throw it away, you’re just throwing it away, not into a rubbish bin or a recycling bin, but a reuse bin. And so those are the reasons that we’ve focused where we have. And so we’re not putting any resources into developing refill stations. So there’s many wonderful companies that are so you know, organisations want to take advantage of that there’s huge ecosystems of companies that do that very well. We just want to make sure that if you buy and loop you can still go to a refill station or vice versa so that there is this flow and compatibility.
Catherine Weetman 29:37
Hmm. So maybe there’s just certain products that will lend themselves to being suitable for refill. But, you know, things like laundry liquid. You know, whilst I’ve been refilling for years, I never look forward to going to do it because I know I’m always going to end up with you know, even though I’ve cleaned the bottles myself, there’s always a spirit alleged somewhere in the entire system. And then you kind of, you know, spending five minutes in the farm shop toilets trying to get the laundry liquid of your hands. Great stuff so. And can we talk a little bit about how the business how the you know, the the loop system creates more value for the brands and the retailers themselves returned
Tom Szaky 30:22
to anonymous to the disposable experience, it just acts reusable. And then there’s the extra carrot, which is by moving the package from being a cost of goods sold. In other words, you buy the package in full when you buy the content to an asset, you can greatly invest into not just more beautiful materials, but more function, more capability, you know, more things that otherwise just wouldn’t be possible. In a, in a disposable pack, like the McDonald’s coffee cup, the lid is very strongly put on. So if you flip it upside down, the lid won’t pop off in a paper cup, it would very much pop off with the weight of the coffee pushing it down. It’s also insulated. So it keeps your coffee colder. If it’s a front, you know, it’s an iced coffee or warm or if it’s a hot beverage, those are all meaningful upgrades that couldn’t exist in a disposable pack because it disposable pack would become prohibitively expensive. And that’s also a really exciting carrot is the future opportunity of innovation. Which think about it if you’re a packaging designer today. Since the 1950s. Every day your boss comes in and tells you to make a cool package cheaper. That cheaper part is critical. It’s always now make it cheaper than yesterday.
Catherine Weetman 31:31
Yeah, making lighter weight or Yeah, yeah, at some point.
Tom Szaky 31:34
I mean, you know, there’s only so much you can do with no budget. And so the goal is how do we think about now reversing it and going in the opposite direction, since we’ve gone to the extreme on how light and thin and, you know, kind of package? Because
Catherine Weetman 31:51
yeah, it’s fascinating. So a whole new, a whole new, exciting set of career options for budding designers that packaging might have seemed really unattractive as a, you know, who wants to go into something that’s contributing to the to the problem. And now you can kind of do the same thing but but contribute to the solution. Absolutely. Brilliant. So, Tom, what’s next on the horizon for TerraCycle? And loop? What can we look forward to?
Tom Szaky 32:19
So I mean, there’s the usual answer here, which is, you know, just more, right, more and markets more scale. I think TerraCycle is now really in its growth stage. So we’re looking forward to how do we significantly increase the impact? How much more can we collect and recycle, and not just in volume, but in more capabilities. You know, for example, in the US, just last month, we launched with L’Oreal a salon cycle, which is a major focus on bringing recycling to salons from human hair to, you know, to coloration products, and so on. So we’re doing a lot of, we’re launching our own curbside service next year as well to bring recycling to what you would call recycling deserts, communities that don’t have recycling. So we’re doing a lot of extra capabilities. In loop, it’s all about moving, you know, we move from online pilot to in store pilot, now the real focus is moving out of in store pilot into in store scale, that’s the next sort of chasm to jump. And sustainability projects always have a challenge of moving out a pilot into scale. And that’s the exact thing we’re in the middle of right now. But we’re also looking to develop new ways to eliminate and elevate the idea of waste. So one of our new divisions is TerraCycle diagnostics, which goes live next year with some really exciting partnerships and diagnostics came out of blue, because it has the thesis that certain waste streams carry diagnoseable samples, your air conditioned filter is used to filter out all the mould and mildew and everything in your air. But have you ever analysed it when you’ve replaced your AC filter to see what’s floating in your air? I imagine almost no one has, but would you? And now we can. We’re even launching next year diaper diagnostics where you can send in one soiled diaper from your child and we’ll analyse the microbiome on the faecal sample and tell you about potential allergies or certain traits. You know, Does your child have a good microbiome, which is really critical in early development, and may be compromised if your child is born through a caesarean or through or his bottle fed versus, you know, vaginally born or milk fed or, you know, breast milk fed? And these are really interesting things on how to elevate the concept of waste, right? No one ever thought you’re, you know, an air conditioned filter can do more than just filter the air, but maybe you can tell you about your air and many other not always streams carry this opportunity. But there’s many that do. And so that’s a new, exciting division that we’re launching in the middle of next year.
Catherine Weetman 34:34
Yeah, fascinating. Yeah. And the microbiome is critically important. I think. I read somewhere that it’s not just in babies in all of us. That the It’s Your biome is responsible for about 70% of your immune system. So making sure it’s it’s healthy. And I guess understanding you know, what’s missing out of all the good bacteria could be could be absolutely invaluable.
Tom Szaky 34:59
Yeah, big lesson there. What I’ve learned in doing research on this is it’s good to roll in dirt sometimes, you know, and especially in a world where we are so hygiene concerned, of course accentuated by the pandemic. It’s good to get some dirt below the fingernails. Yeah. And that is like a natural inoculant hmm,
Catherine Weetman 35:14
yeah. What about vacuum cleaner filters, you know how many micro plastics are in your vacuum? In your, you know, household? Household? Floss, we have things and things. So, over the, you know, 2020 years now running us a circular economy business, which is, you know, is brilliant. So, reflecting on those two decades, what’s the thing that you’ve most struggled with? And what surprised you most in the in the process of building TerraCycle? And loop?
Tom Szaky 35:45
You know, you know, we began the discussion, as I said, what sort of turned me off about the way business is taught is that it’s taught that it serves one God, which is profit to shareholders. And after 20 years of doing this, I have to say it still is the God that is served ostensibly, you know, many times I hear from companies, we’re only really going to do anything if there’s consumer concern, right. So we’ll do it in the UK, because maybe their consumer concern is high, but we’re not going to do it in the US, because consumer concern isn’t that high. So in other words, it’s like sustainability is important. If it drives sales, if it drives loyalty, if it drives the God of profit to shareholders. And now, that is a disappointing realisation, that is still true to this day. But it’s also good to know how the chess pieces move on the chessboard. And so the lesson to me is to say, okay, it sucks, but that is how people are. So let’s play into that, let’s figure out how we can, you know, use sustainability to drive those functions. Now, I hope that time will change this as young people today who are very passionate about the environment, you know, move out of school and into leadership positions, and then you know, run these organisations, I am seeing a shift you can see in the past three years, it’s shifting, but it’s still fundamentally rooted in sustainability, you know, will be executed, if it should, if it serves, you know, basic company KPIs, like growth, profit market, share those things. And it’s sad, because it ought not to, but it but it but that’s still what it is today. And it’s important that folks accept that, and then work within it, if they want to really affect change to that. And hopefully, over time, culturally, you know, that will that will perhaps, shift. And that leads to then a great realisation, to me is that business cannot solve the environmental concerns where citizens can, and citizens can buy voting with what they purchase. As, as seriously as they take the political vote. You know, we get hung up on the political vote once every four years, we get to choose from a few leaders, when we vote with money multiple times a day for the future, we want. And that is that is going to be I think the great question is, can we through democratic congress, you know, and I say it this way, not buy our way into sustainability, but not buy our way into sustainability, because the best vote is the vote of not purchasing.
Catherine Weetman 38:17
Yeah, I absolutely agree with with all of that. And something I did for the United Nations Circular Economy course recently, was all about how you know, we have got that power, not just the voting with your wallet, in terms of what you buy, and what you decide not to buy. But if you can put a bit more effort into telling the company why you’ve not bought that, or why you like what they’ve just done to be more sustainable, then that helps kind of amplify the message. And I think the only way we’re going to make a difference fast enough, is if we are citizens are creating the market conditions that nudge the companies further and faster along the journey, and nudge the politicians into realising that these decisions of levelling the playing field, these decisions are realising that, you know, we’re in a closed system, we can’t keep on over exploiting resources, and we can’t keep on destroying nature. You know, these are vote losers, the way that they’re, you know, pushing the decisions further and further up the road for the next government that also doesn’t do anything. And we need to kind of, you know, really make it a pressing need for them to be seen to be doing the right thing and making the right policies and the right innovations around reusability and durability and repair ability and all that kind of thing. And, yeah, I think I think it’s really important so so I’m glad that’s something that that you’re helping to helping people to think about just how much we can do without realising it. So brilliant. And if you were to give one top tip for somebody looking to take their business more circular or start something Killer? What would that be? Tom?
Tom Szaky 40:04
That’s a very good question. Look, I think the very first thing I would look at, especially if I’m a company that’s making things is how do I ensure that everything I make has a thoughtful end of life? Not a theoretical end of life, but a practical end of life, that is not a linear output. Simple example, make my thing recyclable, or make it reusable, or whatever it may be repurposed for something that there is a next step. And think about that in your design process.
Catherine Weetman 40:35
Yeah, that was Yeah, I think that’s, that’s really useful. And people often don’t think about that they think about the point of sale, and the value that they’re offering, then, but not further on, and thinking about the reusable packaging example, companies have been focused on convenience at the point of sale, but have forgotten about the inconvenience of all the recycling and you know, which, which recycling bucket does this go into? Or? Oh, look, it doesn’t go anywhere. And now that’s making me feel bad as a citizen, because I now I now know I’m contributing to landfill. So yes, you know, what
Tom Szaky 41:10
it’s like it’s taking into account the hangover, not just the not just the bus.
Catherine Weetman 41:17
Good analogy. So, Tom, which of your, your values whether from a personal perspective, or the TerraCycle values, do you think helps move us towards a better world one that’s more sustainable and fairer?
Tom Szaky 41:33
You know, I think the the, the greatest thing for me is this idea of like, pragmatically accept, you know, the way people act and then empathise with their point of view and help them see that they can accomplish their goals, whether you agree with them or not, in a way that’s more sustainable, versus attacking and saying, you know, shame on you for x and B be better. That’s a much harder strategy to to win with.
Catherine Weetman 41:57
Hmm, yeah, I like that. Thank you. And who would you recommend as a future guest of the circular economy podcast?
Tom Szaky 42:05
I’d recommend Paul Hawken, who is actually one of my original inspirations. He wrote Natural Capitalism a few decades ago, and just a wonderful thought leader in the space. A true pioneer.
Catherine Weetman 42:14
Thank you. He was one of my the earliest books that I was reading when I was trying to get my head around all of this back in 2010. And, yeah, thank you. That’s a great recommendation. And Tom, how can people find out more and get in touch and look at what’s happening with loop and TerraCycle?
Tom Szaky 42:31
Absolutely. So on TerraCycle recycling, simply check out terracycle.com on loop, explore loop comm gives you our global platform that you can see and check out. And then you can also find us on LinkedIn and feel free to get in touch with us.
Catherine Weetman 42:45
Great, thank you. And we’ll put all those links in the show notes at Circular Economy. podcast.com. Tom, thank you so much for taking the time to talk to us. And good luck with the next phase of scaling up loop and creating a circular economy for packaging.
Tom Szaky 42:59
Thank you. It’s a real pleasure to chat with you.
Want to find out more about the circular economy?
To go deeper, you could buy Catherine’s book, A Circular Economy Handbook: How to Build a More Resilient, Competitive and Sustainable Business. This comprehensive guide uses a bottom-up, practical approach, and includes hundreds of real examples from around the world, to help you really ‘get’ the circular economy. Even better, you’ll be inspired with ideas to make your own business more competitive, resilient and sustainable.
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Thanks to Belinda O’Hooley and Heidi Tidow, otherwise known as the brilliant, inventive and generous folk duo, O’Hooley & Tidow for allowing me to use the instrumentals from the live version of Summat’s Brewin’ as music for the podcast. You can find the whole track (inspired by the Copper Family song “Oh Good Ale”) on their album, also called Summat’s Brewin’. Or, follow them on Twitter.