Doorstop – Woolworths TerraCycle partnership launch
29 October 2019
Minister for Industry, Science and Technology Karen Andrews held a doorstop with TerraCycle and Woolworths about their partnership launch
Alex Holt: Our customers have told us it’s increasingly important that they want to be able to buy products that are better for them and better for the planet. So we are very pleased that we have put in place a long term partnership with TerraCycle, where we’ll be working together to reduce plastic waste. Now today, we are very excited that we are launching that Woolworths is bringing to Australia TerraCycle’s revolutionary packaging, which is reusable containers on everyday items and it’s called Loop. In mid-2021, customers will be able to buy their well-known brands in reusable containers, and they'll be delivered direct to their homes.
So the types of products that customers will be able to buy will be things like shampoos, conditioners, grocery items, cleaning products. Various products that you would be able to buy in your supermarket.
Question: What about your fresh produce? A lot of people complain about the plastic containers with the plastic wrap, and then sometimes an extra bit of wrapping. Is there any push on that front?
Alex Holt: We're doing a lot of work in that space because it’s incredibly important to our customers. We've actually removed over 500 tonnes of plastic from our fruit and veg items in stores. We know this is a journey. We know there is a lot more to do and we’re continuing to look at ways to remove plastic.
Question: How will this work for people at home? Like what will they need to do, how’s this going to operate?
Alex Holt: So how this would work is customers will be able to order the items that they want to buy. They’ll be able to order them online or come into stores to purchase them. When they finish with the products, they actually then return those items and the packaging gets cleaned, gets refilled, and it gets reused. And that reuse then is actually creating this wonderful circular shopping solution here within Australia.
Question: Would you pay a premium for these products? So if I’m buying the gummy bears, so I buy them in the plastic bag compared to in the silver canister there?
Alex Holt: We’re going to be working very hard with TerraCycle and the Loop team to work out exactly how do you bring these products to life, to our customers at an affordable price.
Question: Is there a mixed message [indistinct]… Woolworths and [inaudible]?
Alex Holt: So our partnership with TerraCycle, which we have just literally kicked off as a long-time partnership, because we are really committed to making sure that we reduce the impact we have on the environment, and actually have a positive impact to the environment. With our increasing collectibles in stores which was Ooshies, we linked up with TerraCycle so that customers could return those items. They then get turned into plastic pellets, which then gets turned into furniture. So we're really focused on how do we create this circular economy here in Australia.
Tony Rossi: I work for Loop, I’m the Vice President in Global Business Development. And my role within the organisation is to introduce new partners, both on the manufacturing side in the CPG world, as well as retailers, to Loop, and hopefully get them to go on this journey with us towards [indistinct].
Question: Where else has this been done, Tony, and what’s the experience?
Tony Rossi: So today, Loop is live in two places in the world; in the northeast of the United States; so we have 11 states on the northeast of the United States that are actively participating in the platform today, as well as the Greater Parisian area in France. We’ve been live in both of those markets for just over four months and early on, we’ve seen a lot of success both in terms of the supply chain and actually making Loop work; getting our partners to package their products in durable and reusable packaging and also getting those products to the consumers so they can be enjoyed, sent back to us where they get cleaned and then refilled.
Question: So tell me what happens at the door. So you have a home delivery, you turn up in a certain sort of truck?
Tony Rossi: So today, Loop exists as an e-commerce platform. So we use couriers to deliver Loop products in a durable reusable tote bag directly to our consumer’s door. Consumer will receive an average of anywhere from nine to 12 products in their tote bag; they will take those products out; they will use them just like they would today. Once those products are empty, instead of throwing them in the trash, instead of recycling them, they go back into that tote bag that they were delivered in where they will get picked up by the courier and sent back to us at Loop where we will clean and sanitise those packages so they can be refilled.
Question: What if you decide not to buy the products again? Do you get a refund on your canister?
Tony Rossi: Yes. So one of the core principles of Loop is there is a transfer of ownership of the packaging. Think of the milkmen in the not too distant past, right? The way that model worked was that the consumer paid for the milk and put a deposit on the milk bottle and that milk bottle was an asset that was owned by the milk company and that package was intended to be durable not because it’s sustainability [indistinct], just because it’s pure business. The longer that that package was used, the better it was for the milk company. But it was owned by the milk company. And we take that same principle today into Loop. So all of the packaging in Loop is always an asset that is owned by the manufacturer and the consumer will pay a refundable deposit to secure that package. When the package is sent back to Loop, the consumer would be entitled to receive their deposit back.
Question: What sort of deposit are we talking? Like can we get an idea of how much you pay to do this?
Tony Rossi: Yes. Deposits in Loop to date range anywhere from 20 cents per package upwards to USD $10. It depends on what that package is. Again, it's an asset that is owned by the company and in order to create a package that is durable, that is reusable, that can be used upwards of 100 times, companies need to invest more than a fraction of a cent in creating that package. And it's important in our model that consumers securitise that package with a deposit so that it can be sent back.
Question: Can you give us an example perhaps of a 20 cent and maybe a more big ticket item, just hold them up please?
Tony Rossi: Sure. So if we’re looking at examples that we see here, something that is glass that is smaller – this would be an example of a lower deposit, perhaps 20 cents to one dollar. And if you look at this container, that is a [indistinct] product, this is upwards of $10 but it's a very durable stainless steel package with a functional engineered plastic lid. So this is very, very heavy duty that can be used many, many times and thus, it costs more than [indistinct].
Question: And the toothbrush, how does the toothbrush work? Because you’re recycling other people’s toothbrushes.
Tony Rossi: [Laughs] Absolutely. The toothbrush is a wonderful example of a product that can take the principles of reusability and be applied to a product. Loop is not only for liquids in a bottle or dry goods in a bottle, but if you look at this toothbrush, it's a mix of an alloy as well as plastic and this will get delivered to the consumer and when it's ready to be resent back to TerraCycle, what the user would do is simply click off the top. This can be sent back to Loop to be recycled into new plastic and the handle is intended to be durable and reusable. And then the consumer would get a new head that could be clipped back on and reused.
Question: How many people have taken it up overseas?
Tony Rossi: So today, we have upwards of a 100,000 people who have signed up for [indistinct]. Loop is still small scale, in a pilot stage. So we have upwards of 5000 people in both France and in the United States participating in the platform today. But our intention as Loop is to slowly and surely grow our user base, expanding into the millions, tens of millions and then expanding globally to partners like Woolworths here in Australia. So while it’s small today, it is built for growth long-term.
Question: I’m assuming most of the plastic at Woolworths is really in the fruit section amongst tomatoes, cucumbers and that type of thing. Most vegetables are individually wrapped [inaudible]… . Can’t we go back to paper bags, things like that?
Tony Rossi: Speaking as Loop, what I would say is when you look at what we're trying to do here - make that switch from stable use in a linear economy to a durable circular economy, it’s not easy. We’re asking our partners to fundamentally change the way that they do business. Our intention over time is where there is single-use plastic, we’re providing durable options. Where we’ve started with shelf stable packaged goods is because that was the lowest hanging fruit, right? We're really turning a big ship here and we needed to prove the concept, we needed to start with something that was easy to do. But in speaking with our partners, the intention long term is to make that switch into durability and I think that you will see that come sooner than later.
Tony Rossi: So when we we’re working with Woolworths, we’re going to be launching this platform in the middle of 2021. There should be several different iterations of Loop. I think our consumer insights today shows that consumers want to bring product back to the store. So when we do partner with Woolworths, there will be the opportunity for consumers to bring those packages back into store. But when we look at it globally, we're trialling very different types of mechanics to see how reusability can work because today’s consumer will shop in many different ways. And just like the concept of sustainability, I don't think there is one way that Loop will work. And for us to be successful long term, there will be many different iterations of this, whether it be in store or whether it be e-commerce.
Loop is a fundamental change in the way that we consume products and without innovative thinkers like Woolworths, I don’t think we’re standing here today trying to bring reusability to Australia. So the fact that the team has been very open minded, has put resources against making this a very successful program is incredibly refreshing and I think when mid-2021 comes, it’s going to be very phenomenal.
Karen Andrews: Well today is definitely back to the future and it’s an opportunity for us to look at how we reuse and how we recycle. So everything that is old is now new again. Australians have historically been very good at reusing and recycling, but there’s been a gap recently with single-use products. So years ago, growing up we were so good. We returned the milk bottles, they were reused, they were recycled, but then we went to the single-use disposable products and we’re wearing the consequences of doing that.
Now Australians want to do the right thing so this initiative from TerraCycle with Woolworths is a great initiative because Australians do want to do the right thing, and reuse and recycle. So it is a terrific initiative. Our Prime Minister has been absolutely clear that recycling is a top Government priority. So we know that of all the waste that is collected in Australia, only about 12 per cent of it is recycled; much of it goes to landfills. So we are actively looking at ways to grow the recycling industry here in Australia and as Industry Minister, my goal is to make sure that we are growing recycling as an industry here in Australia. We are growing our economy and creating jobs through recycling. We want to look at opportunities for innovative uses for the products that are recycled.
So we’ve seen here the toothbrush where the plastic part is recycled – we want to put the future uses for plastic waste to make sure that we are competitive in the world and that we are doing the right thing by our environment.
So congratulations to Woolworths, congratulations to TerraCycle, and I should say, I had the opportunity to visit TerraCycle when I was in the States just last week. I was at the TerraCycle plant in New Jersey, had a great opportunity to look around, see the great work that they are doing and I am delighted that TerraCycle and Loop is coming to Australia.