Tom Szaky - CEO of TerraCycle
Tom Szaky is founder and CEO of TerraCycle Inc., a leader in eco-capitalism and upcycling. In 2001, Tom left Princeton University as a freshman to launch a worm-poop-based fertilizer company. In 2007, the company expanded to start collecting difficult-to-recycle consumer packaging. Today the company collects more than 50 different waste streams in 20 countries. Born in Budapest, Hungary, his family emigrated to Holland and then to Toronto.
In TerraCycle’s quest to make sustainability accessible, they created Loop—a never-before-seen venture to combat single-use waste. For the first time ever, consumers can receive their favorite products from trusted brands in durable, reusable packaging. By creating this circular, durable model, we’ve closed the Loop on e-commerce shopping.
Tom Joins Sustainable Nation to Discuss:
The evolution of TerraCycle from a vermicompost company to a global leader in circular economy innovation
The development and launch of Loop
Engaging some of the world's largest consumer brands and retailers in the Loop program
Challenges to overcome for a truly circular economy
Advice and recommendations for sustainability leaders
Interview Highlights:
I know a lot of our listeners have heard about the new program that's being launched called Loop, led by TerraCycle and a number of corporations that you've partnered with. Can you just give us a little overview of what Loop is and how that came about?
You can find out more at loopstore.com. Loop is an engine. The simplification of it, it's like trying to bring the milkman back in a very modern way where you're packaging isn't a disposable single use, but it's a durable multi-use, and it's something that the manufacturer will take back. Loop came about a few years ago when we were debating whether recycling and making things from recycled materials is the solution to waste. We realized that recycling is critically important and we need to do it. We need to do in a big way. But it's solving waste at the symptom level, not at the root cause. So, while it is important to do that, we also need to in parallel come up with ideas that can help shut off the idea of waste all together. That's really how Loop was born.
We took a big journey to think about, "What is the root cause of waste?" We landed on the practice of using something once. Then the question became, "Why are we so addicted to using something once?" We understood that it was because of its unparalleled convenience and affordability, which is why disposability really won in everything from clothing to consumer products to almost everything. So, Loop had a thesis question. The question to answer was, "How do we solve for the unintended consequences of disposability, which is the waste crisis, but also a decrease in the quality of packaging and the performance of packaging while maintaining the virtues of disposability, which is affordability and convenience?" The big breakthrough came in simply asking the question, "Why do we want to own things that we don't really want to own the moment they're empty?" Do we want to own our coffee cup the moment we finished drinking our coffee? Do we want to own the candy wrapper at the moment there's no candy left to eat? With Loop, which just launched two weeks ago in Paris and then a week ago in the northeast of the US, we're working with most of the world's biggest manufacturers to create durable, multi-use versions of their products, from your Tide laundry detergent to your Tropicana orange juice and so on. Those products then become available through major retailers in the US like Walgreens, Kroger and Tesco in Europe and many others that we'll be announcing throughout the coming months,
With purchasing through the loop program, they may not be paying for packaging, but of course there's the distribution aspect that might add some costs. Is there a higher cost for similar products or a lower cost? What is the difference in cost look like?
So, it's yes and no. As I mentioned at the beginning Loop is an engine. It's an engine for brands to create durable versions of their products. That's pretty intuitive. Now, the apples to apples comparison from a cost point of view is that in a normal shampoo bottle, in the price of your shampoo is the entire plastic bottle. As a consumer, you pay for 100% of it as a cost of good. In Loop, what you pay for is the depreciation of your durable bottle plus the cost of cleaning. In some cases that's more and in some cases it's less. Obviously with volume it gets closer to the latter than the former.
That's on the product. On the distribution side, Loop is an engine for retailers. So, today in the United States, Walgreens and Kroger are our founding retail partners and they have started the model with what's called the standalone Loop model, where basically they promote Loop on their websites and send traffic to loopstore.com where we act as the retailer. It's called standalone because it stands alone from the retailer's operations. Here there is a little bit more distribution cost because we have to ship all the packaging to you and then of course pick it up so that it can be cleaned and then sent for refill. This is still about 75% better for the environment because you avoid the entire waste management system and having to create products from scratch, but there is a little bit more distribution costs.
Now, the key for scale up and to avoid those costs is to move to what we call the integrated models. We will be moving there with Carrefour which is a major French retailer from mid September to mid October, where they start doing what retailers do, which is buy the products and distribute them. They even do the pickups of the dirties through their own fleet, which means no new trucks on the road. We then do what no one does today, which is pick up the dirties, sort them, store them, clean them and then provide them back to the manufacturing companies. Here you're actually avoiding transportation and then when it starts moving in-store, the consumer is really the one picking up the full packages and then returning the empties to the store. So, the lesson here is we're really trying with Loop to not do anything anyone does today and instead leverage what people are already good at. We let vendors do what they're good at, which is making product, getting them to a distribution center and marketing them, and have retailers do what they're really good at, which is take it from a distribution center and get it into a consumer's hand at a great price. Then, we do what we're good at, which is effectively managing that platform as well doing the waste management function, but instead of recycling it would be cleaning.
What is one piece of advice you would give other sustainability professionals that might help them in their careers?
I think that I would recommend framing whatever activity that you're going to bring to your company in the lens of the person paying the bill. Not In sustainability, because it's almost never sustainability, but framing it in the way the person who is funding it will understand and appreciate. Then, show them that they can win in their normal KPIs through sustainability, and not doing it just because it's the right thing to do.
What are you most excited about right now in the world of sustainability?
Well, I'm excited for companies being open to completely new ideas and new ways of thinking and really challenging foundational business models. I think we're at a time where there's more reception to that than I've ever seen in the past decade and a half.
What is one book you would recommend sustainability professionals read?
Natural Capitalism by Paul Hawken.
What are some of your favorite resources or tools that really help you in your work?
I think a really important thing to think about is how to collaborate and how do you motivate, not just your organization, but competitors and other stakeholders. I think that's one of the biggest sort of functions sustainability folks need to be very good at and making sure that the outcome is not just discussion but action.
Where can our listeners go to learn more about you and the work that you're doing at TerraCycle and Loop?
If they're interested in TerraCycle, which is all about the collection and recycling of hard to recycle materials and the integration of those materials back in the consumer products, you can visit TerraCycle.com. If you're interested in Loop, which is a division of TerraCycle, which is all about reuse, then you'd visit loopstore.com.