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The Next Wave: The Brilliance of LOOP

July 10, 2019

In January 2019, the innovative and international recycling leader TerraCycle announced in January a ‘first of its kind’ shopping system called LOOP.

According to their press release “the initiative was designed to change the world’s reliance on single-use packaging, offer a convenient and enhanced circular solution to consumers, while securing meaningful environmental benefits. Loop will enable consumers to responsibly consume a variety of products in customized, brand-specific durable packaging that is collected, cleaned, refilled and reused.”

With a plastic island floating in the Pacific the size of Texas, a consumer supply chain of reusable packaging is an idea whose time has come.

Here are 5 reasons why:

Recycling isn’t working

According to National Geographic, about only 10% of plastic gets recycled, and we are drowning in what’s left.

A new value proposition is a powerful disruptor

The idea behind Loop is to solve for the reasons that consumers buy single-use products, which is disposability and affordability. According to Tom Szaky, CEO of TerraCycle and co-founder of LOOP: “How do we solve for the negatives for disposability while maintaining its positives? We realized it came down to ownership. One of the strange things about the products we buy, anything from our coffee cup to our shampoo, is that we really want the content, but we end up also owning the package…If the manufacturer could own the package forever, they would be motivated to make it long lasting and durable. Suddenly, everything clicks.”

 This shift in ownership will change the value proposition of every product when package durability becomes a sought-after proof point. Category leaders could change lanes.

Brands will have new accountabilities

Brands will now need to create packaging that is convenient, safe and now also durable.  Durability means making something strong, but also something that will last. So a brand manager will have to grapple with a new P&L statement and get their head around the fact that the package will be used over and over again. This means packaging revenue cannot be counted on in the product revenue every time a unit is sold.

Consumers will have starker choices

The first time a consumer buys a product in ‘LOOP approved packaging’, there will be a healthy premium on the cost for the reusable package which they can’t help but notice. The stakes will be higher for consumers who want to participate in changing their ecosystem. And for those who want to share and show their sustainability with pride, their reusable packages will be on full display in their homes.

Improvement will come through competition

As part of LOOP’s January announcement, twenty-four CPG partners were announced and two European retailers: Carrefour and Tesco. The initiative is starting with the full participation of leading multi-national brands and large retailers. Pilots are scheduled in Europe, US, and Canada throughout 2019 and 2020. If these are successful, and consumers begin to switch from disposable packaging to brands with LOOP reusable packaging, other brands and retailers will likely fight each other to be next on board. Competition often brings system improvements and lower costs that will benefit everyone – and most importantly, our planet.

 

 

 

 

 

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