Reaching the waste streams others can't reach
By targeting the residual waste stream, TerraCycle has created a clever business model for consumer goods packaging that people love. Maxine Perella finds out more
Dirty nappies, cigarette butts, even chewing gum stuck to pavements - these are the kinds of items that occupy the days of the R&D team at TerraCycle, who claims it has developed recycling solutions for all of them - it's just a matter of working out how best to collect the materials and making their recovery commercially viable.
TerraCycle was founded by US eco-entrepreneur Tom Szarky in 2001. It initially starting out upcycling used packaging from large consumer brands such as Kenco and Tassimo, transforming their waste into new products such as bags, kites and pencil cases.
The upcycling programmes - run through collection 'brigades' where consumers are encouraged to send back their used packaging free-of-charge to TerraCycle in return for points they can swap for charitable donations - still run strong to this day. Currently in the UK, there are nearly 160,000 people participating in seven collection brigades with over 6M units of waste diverted to date.
However where the company now sees real growth is in recycling this packaging - mainly mixed plastics - into raw materials that can then be used in remanufacture. "You can divert much higher volumes in this way," explains Chris Baker, general manager for TerraCycle's european operations. "In the US for instance, we are producing rubbish bins made from crisp packets."
Baker has been instrumental in helping the company expand its reach outside of the US. He set up the UK operation in 2009 and has since ventured into several EU countries including Sweden, France, Germany, Ireland and Spain. What Baker brings to the business is his knowledge and expertise in sustainable packaging - he used to work for Kraft Foods, TerraCycle's largest partner, as a packaging technologist.
"I thought rather than create the waste, I'd like to switch across and find solutions for dealing with it," he explains. "One of the first Kraft brands we worked with in the UK was Kenco. That was very timely as they were moving from using glass jars, which could be easily recycled, to a foil laminate bag, which while 97% lighter, was still being sent to landfill."
Recycling foil laminate packaging is a complex process, but TerraCycle has achieved it by working with Express Recycling & Plastics in Dagenham, East London, where its main collection depot is. While Express mainly recycles rigid plastics, TerraCycle have adapted some of the processes to enable the plastics, foils, and organic tea or coffee to be separated out.
"It requires more specialist technology, but that's what our R&D team do - they develop the solution first in theory, then trial that process, and then we work with our reprocessing partners to modify their processes. What we've found, of all the waste streams we've evaluated so far, is that there isn't one you can't find a solution for," says Baker.
TerraCycle's approach, quite uniquely, is to look at where the biggest problems are in the waste stream and focus in on those materials most challenging - either to recycle or to separate out. Those packaging streams or product waste still going to landfill in huge volumes is where the company sees the most opportunity.
Any raw materials produced from the process, such as pelletised plastics, are sold onto manufacturers, mainly for use as a substitute for virgin material. "With these recycled materials, they can be very competitive on cost. So as we build up scale with our partners, they can buy the raw material from us for less than their existing raw materials," Baker explains.
All post-consumer waste, which is where the volume is, is now treated in this way and represents the vast majority of TerraCycle's UK production. Upcycled products meanwhile generally are made from pre-consumer waste as the materials are far cleaner and cheaper to process. According to Baker, in the UK the company is currently collecting at a ratio of 80% post-consumer and 20% pre-consumer.
For the consumer goods partners TerraCycle works with across the 16 countries it operates in, such as Kraft Foods, Mars, L'Oreal and Danone, the benefits are obvious. "They sponsor our collection brigades and for them, they're setting up a new industry for that particular waste stream. The benefits to the brand come as secondary, but are significant - they get recognised as being more sustainable." says Baker.
TerraCycle is now working globally with over 50 different waste streams - it's latest asthma inhaler recycling trial in the UK was such a success, it has been extended to over 200 Co-operative pharmacies, with a view to taking it national next year.
And even when reprocessing technology catches up on a wider scale, Baker still thinks there will always be tricky materials to go after. "I see emerging waste streams all the time - we love convenience, but this convenience is the enemy of reducing packaging. The whole time the consumer is driving that waste, somebody needs to find innovative solutions to deal with it."
Baker adds that the company's ultimate goal is to match the recycling and recovery levels of other, simpler materials like glass and metals. The company is about to extend its reach into Europe even further, proving that its unique business model is a surefire recipe for success.
Maxine Perella is editor of edieWaste
© Faversham House Group Ltd 2011. edie news articles may be copied or forwarded for individual use only. No other reproduction or distribution is permitted without prior written consent.