Interview: How A Circular Shopping Platform Lets Consumers Own The Product, Not The Packaging
Loop's co-founder explains how the sustainable packaging platform works with brands like P&G, Unilever and more to enable ecologically sound consumption patterns with durable containers designed for refill and reuse
In today's climate that favors “out with the old and in with the new,” the world has become used to the convenience of disposability—and at huge cost to the environment. However, consumers and retailers alike are more aware than ever of the consequences of throwaway culture, and the opportunity is ripe for new ways of buying and using goods.
Enter Loop, a circular shopping platform that transforms the packaging of everyday essentials from single-use disposable to durable and refillable designs, curbing waste while also offering the same products consumers already buy in premium-quality containers. PSFK spoke to Loop's co-founder Tom Szaky, also CEO and co-founder of recycling company TerraCycle, to learn about the platform's imminent launch, and how it functions to help consumers truly own their product while placing the ownership of the packaging in the hands of the producer. Ultimately, Szaky emphasizes that recycling needs to be as convenient as disposing to sustain mainstream adoption—something Loop is striving to achieve.
PSFK: Could you describe the work that you do at Loop?
Tom: I run and founded TerraCycle, now 16 years ago. TerraCycle's mission is to eliminate the idea of waste. We don't want to see ourselves as a waste management company, but more of a waste elimination organization.
We have a number of divisions to accomplish that. What we have been doing the longest and are effectively the most known for is turning things that have been considered not recyclable into nationally recyclable items, everything from dirty diaper recycling, which we've just launched with Pampers in Holland, to chewing gum recycling, which we do with Cadbury in Mexico, and hundreds of other waste streams.
Our second division is about making products from recycled materials. We take ocean plastic and turn it into Head & Shoulders bottles or Dawn dish soap bottles, for example.
At the World Economic Forum in Davos about a month ago, we launched Loop, which is our third business unit. It's entirely focused on how we solve waste at the root cause, which comes down to rethinking disposable items.
Could you elaborate on how Loop works?
Loop is really an engine for brands and retailers. For brands, Loop enables them to develop durable versions of their products, like making Tropicana bottles in extremely durable glass instead of cartons.
There's an ecosystem of products that most of the world's biggest producers are involved in, from Unilever to P&G and many others, so that consumers can access the materials.
As a consumer, you would be able to go into your favorite store, see your favorite products, but instead of in disposable packaging, it's in this beautiful, premium, reusable package. And instead of having to clean it yourself, to wash it out and refill it, we do that for customers. At Loop, we enable the benefits of disposability without the negatives.
How did you approach designing a process that would fit into consumers' lives and integrate recycling into them seamlessly?
The first question we asked when we came up with the idea for Loop was, “Why does garbage exist?” We landed on, “Well, disposability.” But you can't just vilify disposability. We wanted to think about, “Why are people, even today, just absolutely in love with the concept of disposability?”
The answer is that it brings unparalleled convenience and affordability. To solve the problem, we have to look at the positives, at what the value of it is for consumers, as problematic as it is. The thesis for Loop was, “How do we solve for the negatives of disposability while maintaining its positives?”
We realized it came down to ownership. One of the strange things about the products we buy, anything from our coffee cup to our shampoo, is that we really want the content, but we end up owning the package at the end. I'd argue, none of us really wants to own the package. If the manufacturer could own the package forever, they would be motivated to make it long lasting and durable. Suddenly, everything clicks.
How did you approach shifting that ownership from consumers to the retailers?
It started with the producers of the products. It begins with the visible part, the package design, and making it into something durable. There are two ways to make something physically durable: One is to make it out of strong materials, but the other is to allow it to age. Actually allowing something to age dramatically increases the total number of times it can go around, which is a different concept in a world where everything is always brand spanking new.
Then, it needs to be cleanable, strong enough to endure being cleaned many times, and needs to be refillable. Those elements are the first major hurdle.
The second is integrating it for retailers. The key learning here is that retailers are very limited on resources these days, so they can't do a lot of development. The want to enable a packaging-free aisle, if you will, a popular idea right now. At Loop, the goal is to enable this while forcing them to change as little as possible in their ecosystem.
The benefit of working with existing brands and existing retailers is they don't have to convince consumers to buy their products—they're already being sold effectively at a location where consumers already shop. The difference is just offering the option to have it in disposable and durable packaging.
The last piece is sustainability.We very quickly learned that durability brings about not just reuse, but also an amazing increase in luxury—in design based on the materials required. What happens is, then we can appeal not just to those concerned about the environment, but also to those who just want a better-looking product.
Did retailers and the partners you work with understand the benefit right away? Did Loop have to convince them?
Our very first partner was Procter & Gamble. We've been working with them through TerraCycle for many years. It did take a phenomenal amount of discussion, convincing and meetings because it's a risk, on their time as well as money.
The second one was NestlÈ, and then Pepsi, Mars and Unilever, and things became progressively easier. Once those were established, it was a whirlwind. Almost every week a new partner is joining.
You mentioned the side benefit of durable packaging is that it can create a better overall product experience. Could you expand on this? Did this appeal to retailers?
With Loop, one of the things we focus on is helping retailers make distinguished packaging. The benefit to them is that it's still the same product from the same brand, but with upgraded packaging.
How have consumers reacted to the concept?
The response has been overwhelmingly positive. It's phenomenal how many people have signed up for it. One of the things consumers are hoping for is that Loop scales quickly. We're going to be starting in Paris, then New York, then London and Toronto, but they'd like to see it in more and more places. They also want a range of goods.
It's good that we were able to start with the really big retailers, but based on consumer feedback we're also going after some of the smaller startups to enable a diversity of products. Consumers understand that there's a garbage problem. While some prioritize the environmental aspect, others really like the design aspect, and some really like the convenience aspect. When you put all that together, it's a pretty big ecosystem of benefits. It doesn't really matter which side of that consumers are on, as long as they get on board.
Could you explain the timing of your launch?
The world is really strong right now for a system like this. People have woken up to the problem of garbage, as have retailers. They have made big commitments, big pledges, big promises. The companies that have to take part are ready to go, and that wasn't the case two, three years ago.
How have consumer expectations for at-home delivery and online shopping influenced your work?
It absolutely helps. A lot of what Loop relies on is existing supply chains, and by having a lot of ecommerce drivers already in place, we're not putting more trucks on the road. Consumer comfortability with ecommerce supports us. Overall what is important to us is that customers feel that Loop is as convenient if not more convenient than the way they already consume.
What can we expect for your launch this spring?
May is when New York and Paris go live. We'll be announcing the U.S. retailers at that time. There'll be even more products than what's already available. Every day more and more companies join and leverage more products. What's also great is that they're pushing each other, competing to foster innovation.
Could you speak about the future avenues for product reuse that Loop has the potential to open as it changes consumer behavior toward recycling?
Establishing relationships with consumers related to reuse unlocks huge layers of opportunity. For example, if you go into a normal retailer like Amazon.com, you can see your order history. That's pretty straightforward, and you'll be able to see your order history in Loop as well, but you'll get one more thing. Because we know what you bought and also when you returned it, we know what's in your house. By definition, that's everything that you bought but haven't returned yet.
That is really interesting for the consumer because imagine if suddenly you have someone in your family that is allergic to peanuts. You can suddenly click one button and it would say, “Here is everything in your home that has peanuts in it.” Instead of having to go on the back of every product and figure it out yourself, can you imagine if with one click it would just highlight for you everything that's a problem? Then with a second click, you could send that all in and substitute it for the non-peanut versions of the same type of product. There's a lot of potential there.
Another is a feature that's enabled right at the beginning: Shoppers can set their account so that their empty product triggers a reorder. They shop with their used product, which means they never get the wrong amount. If you think about it, what are the challenges with subscription models? Consumers love them, but one of the big complaints is it's a box every month, and what if they go on vacation? What if they stop using that product? If they set it by having their used items trigger their reorders, then it's by definition perfectly timed.
Another example of something we're developing now is diagnostics.
Imagine, since we know it's your used motor oil container when you send back your used oil in your oil container, we could diagnose it for you by measuring the engine scrapings that are left diluted in your oil. That could then tell you what the health of the inside of your car are.
Imagine cat litter. If we take the used cat litter, we could diagnose it and tell you about the health of your cat. What about a used dirty diaper and the health of your child?
There is a lot uncharted territory in knowing that a used product came from a certain consumer. Those are just a few examples of where that relationship could go in the future.