As the novel coronavirus spread across the United States this spring, TerraCycle CEO Tom Szaky worried about what it might mean for the future of packaging sustainability. While the pandemic's effects are still evolving, early signs show his company's Loop platform could now emerge with even more clout in the reusable sector.
"When COVID hit ... what scared me honestly was the deluge of reporters calling saying, 'Should we write off the idea of reuse in an age of contagion?'" he recalled during a panel at the Circularity 20 conference in May.
Journalists were referring to the slashing of reuse-refill and "zero waste" initiatives taking place across the corporate world. This, combined with cautionary messaging from the plastics industry, contributed to a narrative that reusable systems — a fledgling industry born out of the desire to avoid disposable products and packaging — may be a risky business.
Szaky argues, however, that rather than being a threat to the new reuse economy, the pandemic has ushered in an opportunity to professionalize its services. Launched over a year ago to much hype, the Loop concept — still in its trial phase, but partnering with some of the world's largest CPG companies — has been leading the way in terms of reusable, refillable packaging as a niche business opportunity for the grocery and retail sectors.
The last several months have seen not less, but more usage of the Loop service and, as a result, Szaky has pointed to it as a hopeful example for what the post-pandemic future of reuse could look like. Loop's strict cleaning protocols, he says, should quell any fears about contamination and its online portal allows consumers to shop from the safety of home. These features may offer a solution to some of the risks associated with reusable circularity that brands and retailers worry about moving forward.
As the world rebuilds in the wake of the pandemic, Szaky and others in the reuse sector are hoping to shift from a movement centered around DIY, consumer-led programs to one more suitable to industrial applications. This may even come in the form of tighter regulations around reusable systems overall. But some say while raising the profile of these systems is a good thing the industry should be careful about narrowing down to market-driven solutions too quickly. Loop, after all, is still an experiment.
Weathering the COVID era
While many other reusable systems have taken a hiatus during the pandemic, Loop has experienced a boon in recent months. In a late June interview with Waste Dive, Szaky cited an estimated 5% bump in sales and 25% increase in monthly usage since March. He admitted the program's e-commerce capabilities were likely to thank for this, as quarantining initially forced shoppers indoors, but also expressed optimism about what this means for reuse moving forward.
"What's nice is that we're not seeing people concerned in any way about reuse, because that would have depressed that surge," said Szaky.
Responding to the momentum, Loop expanded its direct-to-consumer platform in the UK in mid-July and was increasing its inventory by "a product a day on average." The turnaround time for products is lengthy, with around 6-18 months needed mostly for the development and design of new containers that meet the standards of Loop and its partner brands. The company has contracts to develop and feature reusable options for about 400 more products.
Szaky said he was eager to use this time to set important groundwork on standards and regulations in a new sector he currently likened to the "Wild West." During the interview, he drew a distinction between "consumer-driven" refill, in which customers are responsible for the refilling of a product like in a supermarket bulk section or bringing a thermos to the coffee shop; and "professional" refill, in which customers, retailers, and brands pay a third-party vendor, like Loop, to perform the refilling portion.
"If it's professionally cleaned and filled, the risk on reuse is exactly the same as the risk on single-use, which is also professionally packed," said Szaky. "Consumer-driven refill is really where the big question mark is. And a lot of retail that we have been working with are pausing and really reconsidering their strategy on refill stations at-large."
Reiterating the need for higher cleaning standards, he offered a trip to the dentist as a familiar analogy.
"Those tools have been reused in a ton of mouths before ours, and none of us think about it because the assumption is the dentist has professionally sterilized them," Szaky said. "But the key difference in that example is the protocol we're assuming the dentist has taken to make that reusable experience completely safe. And that's the whole point I think."
In short, not all reusable systems are created equal, whether it's professional or consumer-led matters, and the latter is a risk Szaky argues may not be worth taking for quite some time.
Yet the suggestion that medical-grade sterilization might be required across the food retail sector does not necessarily align with what scientists say they know about the SARS-CoV-2, a category of viruses they have been studying for close to 65 years.
"To think that our approach to handling food safety and our reusables needs to be handled differently is I think a fallacy."
In late June, a coalition of over 125 epidemiologists, virologists, biologists, chemists and doctors across the globe published a signed statement supporting the notion that reuse-refill systems — including consumer-driven models like bulk bins — "can be used safely by employing basic hygiene." In lieu of the heightened safety concerns, scientists advocated for contactless systems (such as gravity dispensers versus scoop bins).
Echoing this sentiment is Ben Locwin, a senior vice president at biotech company Lumicell, who consults for the Centers for Disease Control and Prevention. Locwin is involved in many federal and state task forces for pandemic response.
"Though the public may have a sense that SARS-CoV-2 is a superbug, it has a relatively low [transmission replication number]," he said. "To think that all of the sudden, everything that we thought we knew about hygiene now somehow doesn't apply or doesn't matter is incorrect… this isn't the pandemic to be trying to ensure that everything we do in life is sterilized."
Locwin referenced food safety programs designed over decades to prevent the spread of serious foodborne illnesses including salmonella, E. Coli, and listeria.
"So to think that our approach to handling food safety and our reusables needs to be handled differently is I think a fallacy… we still haven't seen a single case of contact transmission of COVID-19, and the CDC continues to list on their site that foodborne transmission of COVID-19 has not been seen," he said.
Reflecting this, the CDC updated its guidelines in May to indicate the dominant mode of transmission is through respiratory droplets.
Furthermore, by straining resources to focus on excessive surface sterilization — a precaution experts now believe may not be as effective as previously thought — some worry businesses and systems may be creating barriers to entry for consumers and retailers who may otherwise participate in reusable systems.
"If it's professionally cleaned and filled, the risk on reuse is exactly the same as the risk on single-use, which is also professionally packed ... Consumer-driven refill is really where the big question mark is."
Judith Enck, president of Beyond Plastics and a former regional administrator at the U.S. EPA, said while she admires Loop's model, "I also know a lot of people cannot afford it," referencing the program's container deposits and shipping fees. "I bring my mug to the supermarket and I get a nickel off. I bring my bottles and cans back and get my nickel deposit back. Those programs are great. So I reject the notion that more informal reuse policies are somehow riskier than the institutional reuse," she said, adding, "at the same time, we need to see more institutional reuse."
Catherine Conway, whose consulting firm Unpackaged works with retailers to develop refill solutions at grocery stores, said "if there is any risk of in-store refill, it is customers using shared assets such as dispenser handles," but feels it is "no different for them than opening a fridge or freezer door, touching a door handle or entering their pin on a keypad."
She also referenced the importance of having different solutions that can meet consumers' varying socioeconomic needs. Because bulk bins at the supermarket allow producers to forego the logistics of packaging, they tend to offer a better price per weight. And consumer-provided containers do not add any costs, though they tend to be less convenient.
"It's the calculated risk we all now need to manage in the public sphere and can easily be countered by correct hand sanitizer usage," said Conway.
Questions of scale
Moving forward, circular economy advocates agree about the need to expand reusable services. The question remains what growth will look like for various sectors.
Szaky believes his work with some of the world's largest corporations is what gives Loop credibility in the food retail sector, and has allowed it to accumulate the necessary expertise to drive the industry forward.
"Because [these companies] are so risk averse, the amount of process they are putting our QA/QC and R&D teams through is nuts. But that's great, because if they weren't I don't know if we would have even known to think about all these different things," he said.
To this end, as co-chair of the World Economic Forum's Consumers Beyond Disposability initiative, Szaky is working alongside vendors such as Ecolab, who partner with the world's largest CPG companies to develop sanitization and cleaning systems, to create "global safety guidelines, design guidelines, and city guidelines on how to enable reuse."
"Not like formal guidelines as law," he added, "but guidelines that if you're an entrepreneur, you can look at and be 10 steps ahead to make sure you're doing things safely for your category." Szaky expects a white paper will be ready in time for the forum's next gathering at Davos in 2021.
Loop's vision for how brands should be thinking about scaling reuse has its shortcomings, however, said Clarissa Morawski, CEO of the UK-based nonprofit Reloop. As Waste Dive detailed last year, part of the program's appeal to brands is it offers the option to customize their product's container based on a range of factors: from durability to aesthetics and marketing. Morawski thinks customizing containers might actually be an obstacle to the large-scale adoption of industrial reuse.
She said, via email, while standardization might have a reputation that feels like "going back to the old days of the Soviet Union," it is in fact "the key" to scaling efficiently in the sector. Think: the dairy industry's standardized milk bottle. "This is of course the thing that everyone does not really want to address," said Morawski, "because marketing would be totally disrupted."
Olga Kachook, a project manager working on the Sustainable Packaging Coalition at GreenBlue, disagrees that customizing containers is counterproductive.
"I think where reusables can succeed is if you turn the emphasis onto customization and a more premium experience. So when companies make that switch to offering a product that is just better than disposables, even if there is a little bit of work involved, I think consumers are fine with that because they feel like they're getting something for their effort," she said.
Having tried the Loop testing platform last fall, this is a category Kachook thinks the program excels in, and praised its durable packaging design and aesthetic. Where she felt the program fell short was in its product selection.
"A lot of the products are mainstream brands that consumers concerned about sustainability may not be drawn to," said Kachook, a critique that has been echoed by other reviewers of the service. This made it hard for her to meet the minimum requirement for free shipping (which would otherwise be $20). "It's interesting the type of consumer they're going for," she added.
Szaky said his plan is eventually to include smaller producers as well, but maintains the company needs to focus almost exclusively on growth for now.
"We'd love to work with [smaller producers and startups] and we'll even make it affordable to where they are at their scale, which basically means the big companies are sort of funding some of the costs that we're not passing to them," he said. "The reality, though, is that they're going to bring like five consumers to the market, while Colgate, Crest and Unilever are going to bring millions."
Loop's long-term growth plans remain ambitious, with many steps left to be achieved along the way before it can reach scale.
Szaky referenced plans, echoed by CNN in June, to spread the platform to 48 states by July 1. These plans haven't materialized as of publishing. While the company is currently known for e-commerce, Szaky said Loopstore.com is a testing platform — reinforcing what the company told Waste Dive last fall. The "real scale moments" will come with the launching of "in-store deployments next year, "meaning selling Loop products to consumers directly through major retailers on shelves and through their websites."
Szaky envisions stores creating entire sections for Loop-packaged products, "sort of like organic sections of the store." French company Carrefour will be the first brick and mortar retailer in the world to do this in October. Walgreens in the Northeast and Kroger on the West Coast will begin offering in-store Loop products in early 2021.
"By this time next year, probably 1,500 stores will have Loop sections and then from there just more and more and more is the goal," he said.
The emphasis on brick and mortar accompanies another important shift for Loop: strengthening the returnability of its products. Currently, its e-commerce customers must schedule a UPS pickup in order to send their containers back for refill, which some have found restrictive. Kachook, for example, critiqued the bulkiness of Loop's tote — a problem for the city dwellers in smaller living spaces the program tends to target. She also noted challenges in the return process.
"You have to think, 'Okay, do I have enough empty containers to merit ordering a pick-up from UPS or should I stockpile some more,'" said Kachook. "And the whole idea of stockpiling in a New York City apartment is a little incongruous."
"I think where reusables can succeed is if you turn the emphasis onto customization and a more premium experience."
Project Manager, GreenBlue
Szaky's immediate plans do include providing consumers with an alternative to scheduled UPS pickups. The brick and mortar expansion will include placing drop-off bins at each retail location. The idea is to give the consumer as many options for getting rid of their empty Loop products as possible, mimicking the convenience of disposability, which Szaky refers to as "the gold standard." To that end, he also referenced the potential for curbside pickup in the future if hypothetically "one day, saturation got big enough so that 10% of the public was doing it."
The emphasis on convenience is also what's driving Loop's expansion into other unrelated territories, such as fast food. Szaky said Loop recently signed a contract with "one of the largest fast food restaurants in the world," declining to disclose the name, for a UK trial. The end goal, he said, is ubiquity. "Every one of their restaurants is now another point where you can conveniently drop off your waste whether you shop there or not."
Over the next year, the company is expecting 30 retailers internationally to incorporate Loop products into their online stores. A side perk is that Loop's reverse logistics capabilities offer retailers the opportunity to provide a subscription function, a feature he said is more useful for specific products like diapers or cosmetics. Szaky also noted the company plans to launch a reusable diaper service with "a pretty big diaper brand" in the U.S.
These larger scale agreements are critical moving forward, he said, because without them the program currently operates at a deficit.
"Loop right now is costing the brands money," Szaky said. "They lose money on every product you order. We're losing money every time you order. Everyone is investing. And we have to get to a certain scale for the economics to start working. It's one of these things where it's going to lose money, lose money, and then at some point, tip. And the tipping point comes with scale."