When TerraCycle launched Loop – its e-commerce service offering products packaged in reusable containers – two years ago at the World Economic Forum in Davos, the plan was still to eventually include physical outlets in the mix.
“Our goal is [to] make the reuse as great as possible, ”said Tom Szaky, CEO of TerraCycle, in a conversation before the announcement.
Today, Loop announced a worldwide expansion of its service – often compared to door-to-door milk delivery programs – as it shifts from a strictly e-commerce to a hybrid model that includes in-store with sales partners. retail and fast food. In North America, its partners are Kroger, Walgreens, Burger King and Tim Hortons, a Toronto-based company owned by Restaurant Brands International (also the parent company of Burger King).
In other parts of the world, Loop has partnered with Carrefour (France), Aeon (Japan), Tesco and McDonald’s (UK) and Woolworths (Australia).
For context, when the service started with reusable items sent to customers’ homes via UPS, it was in two markets: Ile-de-France, part of the country surrounding Paris, and the New York area. , which included parts of New Jersey. and Pennsylvania. The extension allows users to purchase products in reusable containers at physical retail stores – and return the packaging in person once it’s empty. (Items purchased online cannot be returned in person.)
The expansion has already started for some of its partners. On September 13, Tesco launched its In-Store Loop service in 10 of its more than 3,000 stores, after a one-year pilot project launched in July 2020. By the first quarter of 2022, there will be services in store in approximately 200 locations. in Loop partner companies.
“With 88 everyday products available, we offer customers a wide range of options, and we will learn as much as possible to inform our future packaging plans,” said Ken Murphy, CEO of Tesco Group, in a press release on the launch.
Szaky said more in-store deployments will take place over the next month.
How it works
During our recent conversation, Szaky picked up a reusable McDonald’s coffee mug from his desk. He noted that a customer could buy this mug from McDonald’s and then drop it off at Tesco. Alternatively, someone could go to Tesco and buy laundry detergent or tomato ketchup, then drop off the empty container at McDonald’s.
“As more and more retailers come in, it’s really getting stronger to create that network where you can effectively have a disposable experience but act in a reusable way,” he said.
Partner stores and restaurants have bins for depositing containers. As Loop has grown, Szaky said it has built an infrastructure to support the logistics of collecting, cleaning and sorting its reusable containers.
Szaky described his infrastructure as sets of main nodes and micro-nodes. A minor node is where all used containers are archived and sorted. And he said that each participating city gets a minor knot. These all feed into the main node, where cleaning is performed.
Loop plans to continue adding to this network of nodes. He believes that in the United States he will need a total of five major nodes and 100 to 200 minor nodes. Szaky said that right now the company has a major node in the United States, as it does in every other country where it has a partnership.
As partners expand the locations they offer Loop services to new cities, the company will add minor nodes to them.
For the customer side of the equation, Loop has always worked with a deposit system, where consumers pay a fee for reusable packaging. When a container is empty and returned, customers can choose whether they want that product to be restocked; otherwise, their deposit is credited to their account and returned, on request. A similar system is in place with in-person expansion via a mobile app, and each retailer or restaurant charges a different deposit for packaging. The deposit for the McDonald’s cup of coffee, for example, is $ 1. At McDonald’s, a regular cup of coffee costs around $ 1 on its own. Deposits on other items in the Loop Ecosystem range from 15 cents for a bottle of Coca-Cola to $ 10 for a pack of Clorox wipes.
Some retailers also offer reusable tote bags – also available with a deposit – that customers can use to return packages to the store.
In the years since its launch, Loop has reminded us that consumers want convenience. With that in mind, as a headline from GreenBiz in 2020 noted, “Stores are essential to the Loop reusable packaging program.”
To achieve its goal of making reuse as large as possible, the service must be available and attract more individuals than the February 2020 Loop customer, who was high-end or environmentally conscious.
Szaky said that over years of analyzing the reuse movement, Loop has decided to go the route of “pre-fill,” where customers can return an empty reusable package and purchase another package filled with the product because he thought it was the most stable reuse possibility.
We needed a platform that solves, that effectively creates a ‘buy anywhere, return anywhere’ ecosystem and which, for any brand, can then play on top of it. ecosystem.
For Loop, having a network of retailers who can take back reusable containers regardless of the origin and who can also offer new merchandise is also important. Szaky cited the example of having to return a propane tank to a propane store and not be able to return it elsewhere. This model is limiting.
“We needed a platform that solves, that effectively creates a ‘buy anywhere, return anywhere’ ecosystem and then any brand can play on top of the ecosystem. And any retailer can do the same, too, ”Szaky said.
“This is the recipe for scaling this thing.”
In the long term, the company plans to shut down pilot e-commerce sites for consumers as it expands the in-store version of its service.
In addition to managing its Loop platform, TerraCycle partners with businesses in another way: by recycling packaging that cannot be put in curbside bins, instead of recovering it through in-store and mail-out initiatives. It handles a plethora of items – such as the plastic bags used for Arm & Hammer and OxiClean detergent pods, the thin plastic bags that hold Bimbo Bakeries USA bread and baked goods, and items from many brands. beauty stores that offer products in various types of packaging, including spray cans, shampoo bottles and mascara tubes. The company has recently come under scrutiny for this work. In March 2020, Greenpeace filed a complaint against TerraCycle alleging that it – along with its largest business partners – was doing greenwashing and was not telling the whole truth about the recyclability of its packaging.
United States District Court Judge Maxine Chesney on Monday dismissed a similar lawsuit brought by Greenpeace against Walmart.