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Is your brand LOOP-ready?

July 21, 2020

Despite a temporary setback due to COVID-19, last year’s powerful launch of Terracycle’s LOOP store signals that brands will need to plan to be ready for the age of reusables.

The novel coronavirus has had wide ranging impact on our society and economy, and the effects that will last the longest are yet to be known. We know that to safeguard the health of consumers and shoppers, we’ve witnessed the reintroduction of single-use bags and a temporary pause on many recycling operations.

One of many questions yet to be answered is this: how will this affect the adoption of reusable packaging? This would be a terrible blow, as momentum was just building. Our hope is that despite a temporary setback, the factors that led to the development of viable, large-scale reusable packaging will reassert themselves. Brands should prepare.

LOOP is leading the migration to reusable packaging. Time Magazine called LOOP “one of the greatest inventions of 2019.”  Last year Terracycle began its two pilots for LOOP, a new online grocery shopping system. At the LOOP on-line store, consumers buy products in reusable containers, and then return the empty containers back to LOOP to be used again.

The pilot, launched in May 2019, is off to a robust start. 5000 households in the U.S (partnering with Kroger in the New York area) and 5000 in France (partnering with Carrefour) are participating, and there are 85,000 customers on the waiting list.  New retailer partners are targeting to launch in the next 12 months in Canada and other international partners will soon follow.

As LOOP gains momentum, how can brands think about being part of it, as Unilever and Nestle and 40 other brands have. They will need to work with Terracycle to meet an approved standard. Here are five things that manufacturers need to think about towards becoming LOOP-ready:

100 Uses

The LOOP team doesn’t expect that a package lasts forever, but rather that is has a minimum of 100 uses. ‘Use’ means it can be purchased, used, returned, washed, refilled and sold again. That’s a lot of handing, so durability needs to be considered. What will withstand the dings and dents of 100 uses? What can be perfectly washed and dried that often? Most LOOP packages are in sturdy aluminum containers with screw-on lids and in stackable shapes.

Recyclability

After 100 uses, the package isn’t going into the trash heap. Once the LOOP package can no longer serve in the reusability cycle, the material needs to be recycled and made into something else. Aluminum already has a high rate of recyclability and the Terracycle team manages these streams for maximum compliance.

Beauty

The LOOP team believes that reusability will grow in acceptance faster if products are attractive and consumers are proud to have them in their home.  LOOP packages must have counter appeal and be a well-designed object worthy of display: no loud labels or bold graphics. Most LOOP packages are in home décor neutral colours and have product names and illustrations rendered in elegant etchings. LOOP doesn’t allow wrap-over labels, which means there’s no opportunity for photography. The design requirements for the program challenge brands to re-think how they get recognition for their product.

Transportability

LOOP packages don’t get transported once, but rather 100 times, so the issues about how packages travel best are even more important. While glass containers are very reusable, they are also breakable and heavy. That’s why aluminium is used for LOOP packaging: it is both durable and lightweight. However, brands also have to accept the limitations of a packaging medium that doesn’t show the product.

Cost

LOOP is expensive at first, but if larger economies apply, costs will improve. A single-use plastic container may cost a manufacturer 10 cents, compared to a LOOP aluminum package which may cost 3 dollars. But if the LOOP package is used 100 times, then the packaging cost for each product sale is reduced from 10 cents to 3 cents.

In the pilot, these costs are passed to the consumer: they may pay up to $10 for a package deposit on their first purchase of a product, but this is refunded when they return it. As well LOOP customers will pay a 10 to 15% premium on any LOOP product vs. a single-use item. For example, Kroger – the U.S. retailer partner for the LOOP pilot – lists Haagen Daaz at $6.49 with a $5.00 package deposit, vs. a $4.99 single-use packaged product in store.

Will the mass market accept reusable packaging, such as LOOP? Consumers have already demonstrated that they will pay a premium for organic or ethically sourced products. Will they pay the same for reusability? They will if they believe that it can be safe. And if the continuation of single-use packaging will cost us far more.

Image Credit: Nestle.com

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