At Davos, he said, a certain vibe made top business leaders amenable to his idea.
“Have you ever been to Burning Man?” Szaky asked during an interview with CNN Business. “The closest comparison —and it’s a weird comparison to me — is going to Burning Man.”
At Burning Man, the annual week-long event where participants build a temporary community in the Nevada desert, people inherently trust each other, he said. At Davos, he was able to approach any business leader and, because of a similar type of openness, be granted an audience.
Szaky was at Davos in 2017 because TerraCycle had helped Procter & Gamble launch a line of Head & Shoulders shampoo that came in bottles made with plastic collected from beaches. While he was there, Szaky — a slick, charismatic pitchman — landed a spot on stage with the CEOs of Walmart, Alibaba and Heineken. He also secured short meetings with the leaders of consumer packaged goods companies and pitched them on his big idea.
Szaky asked companies to think differently about who owns their packaging. Today, companies sell consumers both the product and the package it comes in. Ultimately, it’s up to the customer — and also the municipality where they live — whether an empty bottle gets recycled or tossed in a landfill. Under the current system, the fate of the bottle is out of the manufacturer’s hands, so companies aim to produce the cheapest possible packages, Szaky said.
But what if, instead, the manufacturer retained ownership of the bottle by collecting and reusing it? The company could count it as a longer-term asset on its balance sheet and depreciate it over time. Under that system, the manufacturer would be incentivized to invest more resources in an elegant, durable design, Szaky argued.
At Szaky’s pitch meetings, some important subtext went unsaid. The plastic waste that ends up in landfills and oceans has the logos of the world’s biggest brands all over it. He had specifically targeted companies that were featured on a Greenpeace list of worst plastics polluters, because he knew they had a potential public relations crisis on their hands.
“I don’t have to rub this in their face,” Szaky said, because the companies are “painfully” aware of their reputations.
The consumer goods giants got on board. And after that trip, Szaky got serious about making Loop a reality by Davos 2019.
Now, eight of the 10 companies mentioned in the Greenpeace report are Loop partners.
How it works
Loop customers have to make an account and fill up a basket online. The prices for the items should be comparable to what they would be at a nearby store, Szaky said.
In addition to the regular cost of the item, customers must put down a fully refundable deposit for each package. The deposit varies from about 25 cents for a bottle of Coca-Cola to $47 for a Pampers diaper bin (which TerraCycle said eliminates the need for a Diaper Genie). Shipping becomes free after the customer buys about five to seven items, depending on the size and bulk of the products.
In the United States, the items arrive via UPS in a Loop tote bag. Frozen items, like ice cream, come in a cooler within the tote.
As customers go through products — use all the shampoo, eat all the ice cream — they fill up the totes with the empties. Unlike traditional recyclables, the packages don’t need to be washed. At the end of the cycle, a UPS driver picks up the tote. Customers can keep repeating the cycle or opt out and recover their deposit. Even banged up packages earn back the deposit — customers only lose that money if they fail to make a return.
When the packages are no longer suitable for use, TerraCycle recycles them.
Loop may be convenient for users in some ways, but there are potential drawbacks. Szaky acknowledged that it’s a lot to ask people to use yet another retail website. He hopes that Loop will eventually be integrated into existing online shops, including Amazon.
“We’re not trying to harm or cannibalize retailers,” Szaky said. “We’re trying to offer a plug-in that could make them better.”
Already, two large retailers, Carrefour in France and Tesco in the United Kingdom, are Loop partners and more may join the project. Eventually, Loop packages may also be sold on store shelves.
Shoppers who want to be a part of Loop’s soft launch in May have to apply. The first group of users will be selected based on location and overall interest in the platform, according to TerraCycle. The test will allow Loop to iron out any kinks before the program is open to the broader public, Szaky said.
The engineering challenge
Partner companies have to pay to participate in Loop. Szaky didn’t disclose the buy-in amount, but said it’s in the low six figures. On top of that, many are redesigning their traditional packages — an expensive endeavor that could cost another seven figures, Szaky said.
Szaky said TerraCycle asked the Loop partners to design packages that can survive at least 100 reuses. Rick Zultner, TerraCycle’s director of product and process development, is more measured; he called that figure a “nice goal to meet.”
“Some things can definitely meet that,” Zultner said, adding that if the packages are reused at least 10 times, they’re probably still better for the environment than single-use plastics.
TerraCycle needs to conduct its beta test to make sure that hypotheses like these are right. “There is a fundamental advantage of reuse versus recycle,” Virginie Helias, Procter & Gamble’s chief sustainability officer, said. But “we need to have certain conditions” to make it work, she added.
Carbon emissions from trucking and other factors could outweigh the environmental benefits of Loop if packages are only reused a few times, or if the transportation system is too spread out. Loop has conducted life-cycle analyses to try to estimate the environmental impact in a variety of situations.
To maximize the number of reuses, Loop packages are made out of durable materials like stainless steel, aluminum, glass and engineered plastic, which is stronger than disposable plastic.
Loop packages are sleek and innovative. Degree’s refillable deodorant in silver and white looks like something Apple would make. Ingredients and, when relevant, nutritional information for all products appear in an insert inside the Loop tote instead of on the packages.
Single-use vs. Loop’s reusable packages