Sustainable Packaging

CEO Tom Szaky / Terracycle and LOOP

June 17, 2022 Cory Connors Season 2 Episode 122
Sustainable Packaging
CEO Tom Szaky / Terracycle and LOOP
Show Notes Transcript

It was a true honor to get to interview Mr. Tom Szaky the CEO and founder of Terracycle and Loop. I've been wanting to interview him since I started this podcast and it was even better than I hoped. Tune in as we discuss what really needs to happen to make packaging more sustainable in the short term and the long term globally.

What is the most common item sent to Terracycle for recycling?
Did you know 70-80% of Loops items get returned for reuse?
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The views and opinions expressed on the "Sustainable Packaging with Cory Connors" podcast are solely those of the author and guests and should not be attributed to any other individual or entity.

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Welcome to sustainable packaging with Cory Connors. Today's guest is an idol of mine, frankly. Mr. Tom, Szaky , the CEO of TerraCycle and loop. Hey Tom, how are you? Thanks for having me pleasure to be here. Oh man. I've looked up to you for years. I'm so excited to have you on the show. We met just a few weeks at Landsberg Orora's. Aurora's sustainable packaging summit. And thank you again for agreeing to be on the. That's my pleasure. Thank you. So I'd love to hear just a little bit about your background to set the scene for everyone. What motivated you to start this? It's amazing what you're doing. Yeah, no, certainly. You know, I got, I got the bug for entrepreneurship at a very young age. Started my first company, which was more like you know, graphic design, web design, that sort of thing at, at 14 years old. So I just, just before the crash occurred, you know, like the early two thousands. And, you know, for me, my, my love of entrepreneurship truly came from selfish reasons. You know, I thought it was my, my clear ticket to fame and fortune, right? Those are both very egotistical things, but nevertheless, and I had this big turning point in my first year at univers. One of the first classes I took was introduction to economics. And the professor gets up on stage and asks, I think actually a quite reasonable opening question, which is what's the point of business? What is the purpose of business? And long story short, the answer she was looking for was maximize profit to shareholders. And like, I get it, you know, I, profit is very vital, but to me where I landed was I don't sort of didn't feel right with that answer. To me. Profit is an indicator of health, right. Critical to be. If you're profitable, you will be healthy, which equals that you'll be stable flourish grow, be around for a while. Well, in the opposite is true if you're not profitable, but maybe that's not the purpose. Like we don't walk this planet to be healthy. You know, our health allows us to walk on the planet, right. And so I think that's the same for business. And so I landed at well, you know, profits and indicator of health. And so then the purpose should be something else and perhaps how it benefits society or the planet or both. And so I was starting to look for this concept of purposeful business, you know, my freshman year. And I landed on the topic of garbage and, you know, even after 20 years it's been an internal fascination because like everything in the world becomes waste one day legal property of a garbage. And yet for how big of a concept that is. It's also the least innovative industry per dollar of revenue. It has, it hasn't evolved since 1950s. It is really uninnovative and which is a playground for innovation. And in fact, not just innovation, but purposeful innovation. And that's been really the Genesis of of what got me fascinated with waste and truly, you know, why I will spend my career in it. You know, since, since now, 20 years, I, I love that and that makes perfect sense. They had it backwards, I think. And I think you're right to take a, a different look at the way business should be done. Yeah. Well done. Yeah. Thank you. Do you wanna tell us about worm poop? Yeah, absolutely. So , you know, the the actually I'm gonna, if you hold the 10 seconds, actually show you a bottle. I have it here. Love it. Oh, I'd love to see that. So had this fascination with garbage, but the honest story of where, where that fascination came from was my friends were growing pot in their basements in Montreal, and like figure out, you know, we couldn't never make the plants work until they did. And they were taking organic waste. Feeding it to worms taking the resulting worm poop and feeding it to the plants. Now, to me, this was like, wow. Any gardener will tell you. Yeah, worm poop is awesome. and so Terracycle's first sort of foray into innovating around waste was quite literally taking worm poop. Here's actually, this is the one of our bottles. That's the worm right there and packaging it and used soda bottles. That's an old Coke bottle. And so this product outside the shrink sleeve. Made and packaged in waste. Organic waste fed to worms is the is the content and it's a use soda bottle. So a different one could be, you know, see a slightly different shape. Yeah. And this is how we began as a consumer product company, effectively making products. Out of garbage. That's how the entire journey of this organization began and it taught us a lot, you know, like what is, what is it like to make products? What is it like to sell them to major retailers like Walmart and home Depot and others, and really got a, you know, a good deep dive into the whole consumer product industry, but taking a very different angle. That's impressive. And, and you actually had to get permission from some of those companies to use their form factor packaging, right? Well funny. Yeah, exactly. Right. Like once we started getting, there was a number of interesting lessons in producing this product. I think the first is that. PA waste is very standardized. Like I take this bottle and I'll take this one. You'll notice the Heights are identical, right? The the everything, in fact, the cap tread is identical. The bottom part is identical. Everything is identical, but the silhouette. And so you can run these through a high speed bottling line without any challenge. And it was actually, I think, one of the first products to do that, right. Where it's all mixed use soda bottles running through high speed bottling. The only thing that would stay is, you know, the neck ring, you could see that, you know, that one was red, the other one was yellow. So that was the first is that garbage is crazy standardized. And that's incredibly important because if you can figure out how to like recycle a toothbrush in. The us, it's the exact same in Japan and Brazil and France and so on now. But the other is that garbage does have intellectual property rights. And in this case, the intellectual property, right, is the shape of that iconic Coke bottle. And it was quite interesting because we got letters from the attorneys at both Coke and Pepsi saying seat Synthes, desist. Now a they had to do that cuz they have to protect their shape. I. B, they were actually empirically correct, even though this was garbage and we're just pulling it outta the garbage stream and using it again. So it's funny how garbage retains. Intellectual property rights. And which is odd though, right? I wonder if it should, it's just a question to ponder on, but nevertheless we brought them here and where I'm sitting was all bottling of worm proof. This whole building was worm proof, bottling and we showed them how purposeful we were. We were collecting soda bottles from schools nearby who didn't have recycling programs. So we so we were creating recycling programs for inner city schools. We're here in Trenton , New Jersey, which is a relat. Tough tough city. We were taking organic waste from nearby restaurants, feeding it to worms, putting it into, you know, like making everything crazy, purposeful. And they very quickly said, you know what? The last thing we should do is shut you down. In fact, we should encourage you. And we, we got the world's first and still only license the package shit in their distinctive. And but it really opened my eyes, you know, to the power of purpose. How incredibly important it is. Just like, if you will, the power of. Which we steward and manage a lot, but purpose is also up there and maybe even gaining more steam you know, especially in the, in the past few years, very good point and very true. I know the Coca-Colas and the Pepsis of the world have taken a lot of heat over the years. During recycling efforts people would say, oh, well, look at all this waste caused by these companies. And to the point now where they're advertising Coca-Cola is at least. Don't buy our product, if you won't recycle it. Right. Right. And I thought, whoa, this is amazing. I can't wait to talk to Tom about this. This is perfect for our show. Yeah, no, absolutely. And I give, you know for full disclosure, both Coke and Pepsi are, are partners of ours, great companies. And Yeah. And, and, you know, look, I, I get it right. If you are a green piece or or anyone, and you're doing cleanups and you see what is the most littered item, you know, Coke pops up there, you know, and most lists even at the very, very top. But I think it's, it's very important to also acknowledge that today there is no laws that force companies to be responsible for their products. You know, right. It's it's at most there's taxes and, you know, maybe deposit laws, but there is no law saying whatever you make, you must also make sure has a proper end of life. Those laws don't exist. You know, again, the closest is if you make a package will tax it and that's E P R send a product responsibility and use those funds to boost recycling, or maybe you have to put a deposit on it. So you encourage people to get the deposit back by returning it. But yeah, really what should be the, you know, what should happen? Manufacturers in an ideal world should have to submit their product for approval to the end of life managers, to say they will be able to manage the end of life of these. Just like if you make the pharmaceutical, you have to get the FDA to say, it's okay to sell inversely. Then the end of life managers should be legally responsible to recycle those things. When today. No garbage companies, legally responsible to recycle anything it collects. So it's only gonna recycle what is profitable. Yeah. That's a big, you know, mismatch, right? And so you have, unfortunately, every stakeholder sort of pointing at the, at the next one, like, you know, manufacturers are frustrated that recyclers. Are not advanced enough and not leaning in on these new package forms, but they're not responsible for it. Right? Manufac recyclers are frustrated that manufacturers are inventing all this new stuff that they don't have. The equipment for consumers are frustrated that like what they put in the recycling bin may not get recycled. And why are, you know, and, and why are manufacturers making what they make? And it's a, I think what, you know, really you know, we need to think about is how do. So do what we can within, you know, the position we're in, we're all consumers, but we may also work at companies and then think about how to solve that really important disconnect. Right. Cause otherwise we're just gonna be in the same position we're in today. Yeah, absolutely. And very well said. It seems like everyone continues to point fingers at each other when there are solutions here and I think you're doing a great job with your companies, identifying some of those solutions long term. Very viable, realistic solutions. And I think you're, you're really setting a, a path of success. So I'm excited to see where that goes. Let's talk about loop a little bit. What, what is the loop Alliance and, and how is that working? Absolutely. So if we look at the way we've progressed the TerraCycle, like from the worm poop days, which we don't do anymore, our first major business, when it became, oh, that's that's shut down. Okay. It, it did, it did it will be pivoted. And the reason we did is when you're making a product. The product is the hero of the business. Yeah. And so when we were making worm poop, yes. Everything is garbage, but you notice how this bottle looks pretty nice. It's UN crushed, right? So we couldn't take crushed or, you know, soda bottles that have been driven over or somehow deformed. Right. That yeah. Happens in the world of recycling. We were taking certain organic waste to feed the worms, but not other organic ways. So we. To make a good product. We're picking the very best of the garbage, and we're never gonna touch cigarette butts, chewing gum, dirty diapers, all of the things that we've done or do today. Yeah. And so we pivoted out of that. It was quite a painful pivot and we started our first business unit, which has the value proposition that we can set up recycling programs for anything that is today. Not municipally or locally recyclable. Of course you should always design into local recycling first, but in many cases like a toothbrush or a, you know or small complex products, it's not possible. So we can set up systems to do that from there. The second division focuses on how do we integrate waste into products? Like here's an example. This is the number one dish soap in Europe, fairy dish soap. This one here is made using some ocean plastic. We're the ocean. But it could be rock and roll festival waste. It could be the waste from the top of Mount Everest, unique inputs. and that got us thinking a lot. Well, is that enough, you know, as a company, you know, facilitating recycling and recycled content, is that really the answer? And we realized it is not recycling is an imperfect solution, a bandaid, you know at best, right? Yeah. And so we said, well, how do we go further? And the answer was, we have to shrink the circle from a recycling based circular economy to a reuse based circular economy. And as we looked at the world of reuse, we first evaluated, what are the ways a consumer product company can ex. Can enable reuse for their consumers. And we landed on three ways. You can do refill stations, which have become a lot of experiments on refill stations, you know, bulk dispensing refills as well. Be sort of you could also concentrate your product and have an example like this is hello, where you got an empty bottle, you got a little pill, you know, a tablet, you put it in and then you dilute it. That would be concentrate, filling or sachet filling, right. Where you get bulk and fill over. And then there's pre. Which is when the container's already full and you just return the empty, like our propane tech in the us. Yeah. Or our beer kegs . Yeah. So the first thing we looked at, oh, exactly, right. Like Clorox , those Clorox swipes that's right. And so the first thing we asked ourselves is in those three modalities, How many products could play in them. And interestingly, only so many products can go through refill stations. For example, you would never do Tylenol in a refill station. You would never do insect repellent and alcohol, and frankly, about 80% of all the products on shelf. Either, technically couldn't go through a refill station. Like frozen Faffel balls would be not so easy or you couldn't safely. I'd like to see that that'd be good. Yeah, right. But you know, or couldn't safely or legally do so. Right, right. So that's, you know, it, it's a very small market, even fewer things can be effectively concentrated. Now you can concentrate hand to very well, but you're not concentrating even tomato, ketchup, you know, let alone latex paint or, you know, all these different things. And we found pre. Frankly, anything in a disposable package can go into a pre-fill because it's all you're doing is changing the durability index of the package. So that was really interesting. So that's a pre-fill we felt was like the place to focus for that reason. Yeah. It is also today the biggest scale we use in the world it's the beer industry of Canada. It's the beverage industry of Germany. It is propane tanks and beer KES here. Yeah. And so the question was, what's the issue, what's stopping it from, you know taking over everything and, you know, we thought like take the beer keg and the propane. Isn't it interesting that when they're both. You can't take the beer ke to where you bought the propane. You can't take the propane tank to where you bought the beer ke right. So they create what you would call mono supply chains. Now in a asset value item, that's high, like a propane tank and you get whatever 25 bucks back. Okay. You're gonna schlep it to the place and it'll be fine. Beer keg is probably even more., but what if it's a 50 cent item, 25 cent item, you know, like like a Coca-Cola or a, or a, You know, a tomato ketchup or a Nuella, you know, and it's also problematic. If you have to remember where to return it, we mix items all the time at home. Like I may shop somewhere and my wife may shop somewhere and someone, they give things to me and it all becomes a big sort of combined. And so, as we thought about that, we said, well, prefill is where, where one should focus, but we have to solve that issue. And so loop is a platform for reuse and the platform works in two stages. We first work with consumer product companies you know, like you showed Clorox or like CA that's cascade, you know, with factor and gamble. Beautiful. They have to, yeah, it's right. Nice. Right. They have to develop reusable versions of their products, our formal role. Is to approve what's in your hand that it's durable and cleanable. And our informal role is to ensure that the company can actually get that across the finish line, helping connect them to packaging suppliers like that. I think Kohler makes that particular product for Clorox, which is interesting. It's beautiful, very well designed. Yeah, but, and something we'd like to keep on our counter. Right. Yeah. Right, right. And so that's the first step right now. There's many ways to achieve it. Right? One is you can use, in some cases, existing packaging is conducive to reuse think like a glass peanut butter container. It's actually made durably enough that it could be reusables that's you know, or the iconic craft Heights tomato ketchup bottle, or you know, many other examples stubs, barbecue sauce, you know, totally conducive in the way it is already. So you can do a lot of existing packaging, just maybe change, right? The label adhesive technology. So it can come off a bit quicker and that sort of stuff and cleaning, then there's a lot of opportu use stock packaging. Stock would be. This container, this is tied laundry detergent, beautiful container, but this is a package that they repurposed from a different container use. Right. And made it into, you know, it's not, it's not a custom mold in other words. Right. Okay. There's a lot of opportunity there just in Google, put in the word container instead of the word package, right. There's a huge industry of containers. Massive think like 50% of Americans decant their hand soap. How many of us decant coffee and other things into containers. Yeah. Or like spices. Do we think about the huge industry of amazing spice containers, right. Like, yeah. Do you know if you're in McCormick and you're working with loop as they are, you don't have to invent a new spice container pick from the 10,000 existing ones. Yeah. And off you go and we'll reuse. Yeah. Yeah. And, and then you have what you showed, which are truly the magic, the bespoke designs, like really custom amazing. Beautiful. And you can do some phenomenal things with that like Aina Moto in Japan, a big food companies integrating realtime OT into the package, sensing its temperature and humidity. So you can log into the package and see a variable expiration date depending on how you store it. wow. And consumers get into these products for three reasons. Sustainability, certainly it's reusable, not disposable. It's also way more beautiful, way more counter worthy as they say. And third. In topic in topicals and ingestibles, there's a perception of an increase of health. And I use choice for the word perception, cuz I don't actually know the data on, you know, what's healthier getting your ketchup up from a plastic squeeze bottle or a, or a glass bottle, but, but people will project that the glass one is healthier. Right. We just don't know, we don't have that sense. And so that's the first step. And then the second step is we work with retailers. You know, from Kroger and Walgreens to car four and Tesco even eon out in Japan who then create sections of their stores. So like an organic section, but for reuse for all these top brands, like we're not talking, you know, like just niche brands, like all. Top tier brands, put their reusable products there and we've seen like consumers love it. You know, they, yeah, they they will have, they have an 80% chance of shifting brands to get the reusable 80%. Wow. Shift preference. So it's very much incremental non cannibalistic really, really good sales rates. 80 to 70 to 80% of the packaging comes back which is three times is the rate of recycling in the us, which is quite high. There's some really, really nice sort pieces. So we're in loop is now is we're live in UK, France, Japan Canada, us, and really over the next few years, it's all about scaling, you know and Portland, Oregon, and, yeah, exactly right. Yeah. Portland. That's where I got off. Yeah. Yeah. And that's the first place to go to go live was Oregon with Kroger. And then we have three major retailers launching in Q3 in various parts of the us. I was so excited to go to Fred Meyer, which is owned by Kroger and, and to see your shelf. Full of, I, I stood there for like a half hour looking at all this stuff, taking videos, taking pictures to the, to the point where people are looking at me like, who is this guy? What's he , I'm like, this is what I live for. I love this stuff, you know? Yeah. Just, just leave me alone. I'll buy a bunch of things, you know? Yeah. Yeah. But it's, , it's exciting. You know, I think we're at the very beginning of where this can go, but like for us, I think it's, it's the, the range. I don't think we use this for everything mind you, but it can really hit a lot, like with with the big retailer in the UK. We're launching clothing later this year, we've already launched cloth diapers. So even beyond your traditional consumables, right. And think anything like. Caulking to latex pain, you know, to insect rep propel in the hardware category. Right. All the way to you know automotive consumables. I mean, there's so many areas where where app applicability can go. And then as you go to hard goods, I mean, I know technically clothing would be called the soft good, but I mean like more non-consumables right. Like from games to clothing, it, you can play the same model. It's just what you're sharing is not the package, but the actual object. Yeah, absolutely brilliant. I haven't thought about that. I know there's a big issue in the fashion industry with what they call fast fashion and clothes that, that wear out too fast. I read a really great book about that called rubbish where they talked about the. How all, most of our clothing ends up in Vietnam or these you know, countries that will even literally pick the hair out of it to be used to make wigs out of I thought that was fascinating. like, yeah. Wow. You're absolutely right. I mean, can give you the numbers on clothing. Like there's such an amount of fast fashion or, you know, clothing that and usually, you know, today, the average person in a Western market, Only wears clothing three times before disposal on average three wears before disposal. I mean, just to put into perspective and we buy 10 times more clothing. Oh, sorry. I, I apologize. Someone alive a hundred years ago bought two apparel items per year. Today. It's 66. wow. 66 per year. And so now, now think about it, right. We go down to our church and, or Goodwill and put it in the bin and we, what is the perception? Oh, it's all gonna be resold in a vintage store here in the us. Yeah. 3% is what's resold. Yeah, 97% is bailed and sold by kilo, into emerging markets. The name of it they give is dead white. Man's clothing is the, you know, the, what you would call it in like Northern Africa. Yeah. But then when someone buys it by the kilo there, you know, only one third is resold locally, and this is the problem. Two thirds are dumped. Yeah. Yeah, it's, it's really tough. So in loop, for example, the way we look at it is, think about the business objective, right in fast fashion. The goal is to make the price of the clothing as low as possible, and the retailer makes money on volume, right? And the way we're launching it with loop is instead of buying the item, you pay a deposit. And you pay a use fee. That's not like a rental. You could hold it for years, you know, whatever you want and you can keep it if you want. And then you just never get your deposit back. And you're out the use fee, no matter what, but if you return it right, you get your deposit back. Now, check it out for the consumer. The consumer will get a higher quality item, cuz the item is made to be dur. At like half the price if they return it and they don't have any garbage think for baby clothes where we're starting, where you go through items very quickly. Yeah. But that's perfect for the retailer. You make more money on the sec. On the item, going around than ordering a new one, the cost of cleaning it, putting it on a hangar is cheaper than buying a new item. So the retail margin goes. And the only thing that happens there is a loser here. The loser is the manufacturer makes less sure. Yeah. Well, but frankly they can't keep up with demand anyways. So that's that certainly, and they may probably will help higher quality items. Right. So they can do a higher price point item, but lower volume. And I think that's the big mega sort of, I mean the big wide elephant in the room, if you will. Our volume is way too high. Yeah. Right. As people. And when I say volume, our volume of consumption is wildly over indexed, just wildly over indexed. And doesn't matter how you know, sustainable you know, those products are in their creation. It's way too much net stuff. So what we're gonna have to, you know, resolve to as people is to bring down our volume. Now you can bring down volume you know typically people will hear that as sacrifice, but a way to maintain the same amount of, you know, spending, if you want to like, you know fuel the economy is as you bring down volume, bring up quality. Right. Right. Yeah. And then you may be spending the same amount, but on fewer items, Buy one nicer shirt instead of exactly. Three less quality. Yeah. That makes perfect sense. Yeah, yeah, yeah, exactly. And the, the deposit on this was, was$10, but I was happy to pay it cuz I knew I'd get it right back, you know, the next it what's interesting about that one. So yeah, we talk about deposit theory, right? That's the highest deposit in the ecosystem, right? The average deposit's like, you know, 50 cents, 75 cents, the lowest, I think is 10 cents. Right. But that particular one is the highest, but here's the cool part. That exact container you can buy empty today. And it will retail depending on the retailer between 22 and 29 99 So you're getting a discount buy. You can buy it filled with wipe. Cheaper than the thing empty substantially cheaper. Oh. And whenever you're done, you can get your money back if you so wish. Right. And then this is the interesting part about depository theory. It actually still costs in that example, Clorox less to acquire that pack than the deposit. So if you choose to keep it, they're making a profit on the package. EV like you said, there there's, there's so many ways to win at this and it all makes sense for the environment. Yeah. I had an awesome conversation with a couple recycling people a few weeks ago. One from the United can. A manufacturer's Institute and one from bottles glass bottles, and they were talking about recycling rates and P states like Oregon that have bottle deposits, have a double factor recycling rates states that don't do you feel like that will go nationally and internationally eventually? So the biggest types of legislation one can do within this whole circular economy space is zoom out, right? Is one end is banning things. Seattle ban this straw, New Jersey ban the plastic bag. Examples. Those are good. But they're very symbolic, right? To sort of nip at the heels of disposability. Yeah. Within recycling, there's two primary legislation forms. Well, really three, if you will, one is DRS or deposit return schemes which would be here in the us called bottle bills, which is exactly what you're describing. And they always, always, always increase rates, but they're lobbied, you know, around the, the lobby who will try to push them away. Pushes uses the argument. It increases prices, but net net, the more DRS or bottle bills, the better. Right. And it's straight up. You also have EPR, which is finally coming to the United States. You know, states have now started passing it more liberal states, but hopefully this will, you know, roll out across the country. And that is extended product responsibility, which like a packaging tax that tax everyone pays and it goes into funding recycling. So. Things that are profitable to recycle more of it will be recycled. And then some things that are maybe just on the edge may fall over. It doesn't mean everything will be recycled, but more investment will occur into recycling. And it's a wonderful thing. You also have truth in advertising like Senate bill 3 43 in California is a really good example of this. And there's many of those many states are doing copycat legislation. This is a wonderful legislation, which is moving from just the ability to claim recycling. By having access, which is how the FTC governs it to also showing that it is actually being recycled. And that's gonna mean a lot of package forms, like many polypropylene package forms that today have the recycling logo will not be able to have it later. Yeah. But that's good stimulus because it's gonna move them to innovate. And so those are the ones within recycling and there's a lot of pro reuse legislation coming as well. Like Vancouver just passed the tax on disposable cups where you have to pay 25 cents more. If you get your beverage in a disposable cup, but no tax, if it's reusable, those would be like pro reuse legislations and like Vancouver or BC. Yeah, British Columbia. Yeah. Yeah. France, for example, passed it even more aggressively where they said, if you're a restaurant and your customer eats in or drinks in, it must be in a reusable container. Now, if you think about a normal restaurant experience, you probably say like, that's pretty normal, but think if you're a McDonald's or Starbucks, that's not normal. that now that's a big change and we should talk about burger king and Tim Hortons and yeah, your, and I believe McDonald's is gonna be part of that too. Let's talk about that, that, that packaging system for loop is incredible. Yeah. So, so we are, we've talked a lot about the FMCG category you know, fast moving consumer goods. And there, we have, you know, a lot of home care, personal care beverage, packaged food, you know, all, all those players, but we're also working with brands like McDonald's, this is their, you know, loop vest. This is live in the UK. So you can get this at select restaurants, of course, with burger king sodas and sandwich containers and the important part about all this is today in the UK, you can go to a McDonald's buy your coffee in a reusable vessel, but drop it off at a Testco . Then at the Tesco , go buy your laundry detergent and tomato, ketchup up and reusable vessel and drop it off at burger king. And you see that and mix it all together and so on. And that's the it's gotta be convenient. It has to, and that was my biggest learning in all of this is it's not about, will someone pay more for the organic product? Right? It's is it convenient first and foremost? And if it's convenient enough, then tell me about the features and benefits. And then if I like those, then tell me about the price. then yeah. Price doesn't matter because you've saved me., your service level ands convenience level is so high. It's 10 bucks who cares? I'll get it back well, and you get it back anyway, right? Yeah. I mean, that's the thing with reusable packaging is as it scales, it is as competitive economically in most cases to disposable. And there's a lot of very interesting stimuli that pop out, you know, the package becomes an asset there's profit on package loss, and there's also these interesting new theories that don't play in disposable goods. Incredible. Absolutely incredible. So back to TerraCycle for a minute I'm amazed that you can recycle cigarette butts. And diapers and chewing gum. How long did that process take to figure out? And frankly, how many people did it take? How many scientists did it take to figure out how to recycle those things? Absolutely. So each waste stream is like a different animal. And now what it has in common is you have to figure out how to collect it. You have to figure out how to process it, and you have to figure out the business model that funds that to occur. So we zoom out the first thing to notice more or less, everything in the world is technically recyclable with enough science and process. You can recycle just about anything. What makes something practically recyclable as if a garbage company can make money? What like an aluminum can't yeah. What makes something practically not recyclable? Like a cigarette butt is if a garbage company can't make money. Right. There are garbage companies are for-profit enterprises. They have no legal responsibility to recycle anything. So they're only gonna recycle what they can make money on. It'd be like the difference between littering on the street. Gold. Everyone's gonna pick it up or littering on the street poop. Everyone's gonna avoid it. Right. and so very true. The the first and most important thing is actually the business model, getting an actor to fund it which could be the producer, could be the retailer, could be the city that all this happens and it could be the place of consumption. It could be the consumer in all cases, figuring out why someone's gonna bother paying and funding and then getting them to fund more. That's the first, then we have to figure out how do we collect it in a way that is affordable to the funder safe for the consumer, you know, in some waste streams like razor blades, diapers, you know, there's major safety questions. Yeah. You know, a pharmaceutical packaging and so on how to do that in a way as well. That is not just safe and affordable. But exciting and you know, where people are consuming that. So it's, you know, when you think collection, it's not just the box, but about all these different things that come around and how we collect cigarette butts, which is typically in in, on city streets you know, with little receptacles is very different than how we collect dirty diapers. But that's more of like an operational innovation and sort of human insights. And then you have the part that you're asking about, which is then how do you process it? Right? And so we have a team of scientists we're about 600 people here at TerraCycle doing, you know, work like you see me and folks that are walking around and a good number of scientists at both chemical and mechanical processes. And they first figure out the technical solution. Then we have an operations team who finds vendors and processors who then implement those technical solutions to create the practical solutions. And that makes a supply chain up and running. And then from there, it's about constantly making it, tightening the screws and making the quality of the outputs better and more higher end. Amazing. So what does a cigarette, but for example, turn into as a, on the, on the other side as a reusable or as a consumed. Absolutely. So something like a cigarette butt is shreded and we separate the organic bits, which is the Ash tobacco paper, which goes to composting mm-hmm and then the really cool technology we developed was getting the paper off the filter. Right. And getting those things separated. Yeah. The filter is made from cellulose acetate, which is the same polymer as your eyeglass frames, if those happen to be plastic. Oh yeah, yeah. Yeah. I didn't know that. And so cellulose acetate can then be made into a plastic granule or a, or a powder. Or app pate, those would be the raw material outputs. And then those can be integrated into new products. Ash trays, pallets eyeglass frames could be, but probably wouldn't be appropriate for a cigarette, but but nevertheless, it's those sort of outputs is what you get. Well, that's amazing. And I think we're gonna see, I, I'm always thrilled to see in like a Disneyland or someplace like that, where they have. Trash receptacle that's made out of recycled bottles. Yes. Or, you know, I was at San Diego zoo you know, 800 bottles took to make this trash can like, well, that's perfect. You know, that's a, just a, that makes a lot of sense. Right? Well, I've got lots more questions, but let, let's see which one's most important here. Oh what's the number one item that TerraCycle gets back for recycling. That's a good, good question. I don't know what the number one is, but some of the very popular ones would be cosmetics PPE now, you know, with the pandemic. Yeah. Although that's, that's going to hopefully go down flexible food packaging you know, things like contact lenses. Those would just be some examples of some of the more high volumes outputs, like the actual lens you can. The lens and the packaging, certainly. Yeah. Wow. That's incredible. Yeah. That's incredible. Well what I know, this is a big question, but what's the future of sustainable packaging? Is it, is it reuse? Is it recycling? Is it all these things together? Yeah, I think, look, there's not one silver bullet. We live in a very complex world with lots of, you know, like lots of different need cases. And, and you know, even a certain product may have on the go needs, portion control, vault, you name it, right? Yeah. So I think. In the short term, recycling is what we have to really focus on because everything is disposable more or less. I mean, that's a broad statement, but more or less, right? Yeah. And so we need to really think through how to get bigger, better recycling services. And there's no one answer. I mean, TerraCycle is not, you know in a vacuum the answer it's a whole ecosystem of solutions. Yeah. Then while we shore that up in the short term, We need to think about, I believe alternative methods of delivery and consumption, which is where reuse comes, but it may not be limited to one modality of reuse or even three modalities. There may be many ways to think about, and there you're not just editing the package. But you're also editing the business model in which the package flows, which is quite interesting, cuz you can only innovate and object so much, but then when you innovate the business model, you can have even more potential outputs cuz you're adding another multiplier or another variable to it. I think though, you know, so that would be what I'd say in the short term and the medium term in the long term though. The most important thing that we have to think through is reducing consumption. Right. That is really going to be the most important use use less, right? Yeah. So I would say like, you know, if you are doing package innovation and product innovation. The first thing is how do we eliminate the need of the product altogether? And then how do we make the product , as less stuff as humanly possible dehydrating like shampoo, bars concentrating package free, you know, those sort of things. Then how do we create short term solutions like recycling and then long term innovations, like reuse and then keep pushing. But I think those are the key sort of questions reduction both in personal consumption and how products exist and then about how to circular, we can make it. Excellent. Do you have any advice for, for those of us? Most of my listeners are in the packaging industry. Yeah. Uh, I think, could you give us a few words? Yeah, absolutely. The biggest breakthrough I have seen and this came from loop, but I think it's, there's a good learning here, which is. Usually designers are really stuck in the object design, right. That thing, you know, that, that, that three dimensional object and what material how cheaply can I make it? You know, what cost can I make it for? What function does it have? Can it squeeze? Can it drop, can it do this? Can it do that?, that's where we're stuck and there are limits to how much we can do there. Right there really are. It's just like if you are a graphic designer doing the labeling, the two dimensional. There is. So there's many limits on what you can do on the art. You can only design into the shape and you may only be able to use a certain number of colors and list that. And the other, the biggest place. I think the future of package innovation will not be the two dimensional or the three dimensional, but it will be the business model in which the package flows. And that can be. Fundamentally magical what you can do. You know, by changing the package from being a cost to an asset, you can suddenly invest orders, magnitude more into it, you know T all sorts of different things. And so that's a really unexplored area. And I think there's a lot of richness in, in thinking through the next dimension, which in this case is the model, the business model, the model of owner. The way it flows. How does it lead the consumer versus just going into a, a landfill or a recycling output. I love that. I think that the first time I saw the, I think it's I think it's hound, Doss, brand ice cream. The first time I saw that aluminum container and it was described on your website as this keeps it colder longer. Yes, that's right. I thought. Okay. We can make packaging better. Yeah. Yeah. We can go the other way for so long. We've been going, how can we make this lighter? How can we lightweight this? How can we make it last? We're robust, right? Yes. Yeah. Yeah. Cheaper, cheaper, cheaper, cheaper. Yes. And now you you've flipped the switch and said, no, let's go the other way. Let's reuse it a thousand times and amortize that cost over that many and save us all a fortune and, and save the. Yeah, so it still can go cheaper. It's just, you have to buckle it the other way in a way. and I think this is some of the sort of interesting places to play. And luckily there's a lot of tailwind from, you know, the consumers retailers, you know, there's a lot of leaning in on this type of thinking. Yeah. And from the, the businesses manufacturing product you know, I, I live in Portland, Oregon. We've always been very green city. Yes. And town. 20 years ago, people said we wanna go green, but then I would say, well, it costs 15% more. They'd say, mm, maybe next year now they don't care. Let's do it. Yes. We need to do it. We have to do it. Here's why, yes. Our customers won't buy our product if we're not, if we're not sustainable. So, and it's more and more, I think you're gonna see more and more consumers saying that you're also gonna see legislation making it easier to do that, you know, making it more costly to be linear and more affordable to be circular. Totally agree. Yeah. Well, thank you, sir. How, how can we, I appreciate your time. Oh, how can we sign up to help? What is it? Check out We actually just relaunched it and look at all the free programs and you can learn about loop. You can learn about all sorts of things, even diagnostics from our from our platform. Well, thank you so much and hope to have you on again someday and, Really appreciate it. Let's do it. I look forward to hanging out again. This was a really fun convers. Thank you, Tom. Thank you. See you later.