Thinking Differently About Waste

TerraCycle

12. Responsible Consumption and Production

Overview

TerraCycle manages to eliminate an extraordinary amount of waste through their Zero Waste Boxes. The Zero Waste Boxes are a main driver of TerraCycles' innovation; however, the company itself has a culture and mission that aligns with their values of sustainability. They have every intention of expanding their business to reach wider and ultimately change the very way consumers perceive waste.

Authors

Courtney McLeary

Courtney McLeary

Mark Gencer

Mark Gencer

varinder Singh

varinder Singh

Pedro Rolim

Pedro Rolim

WILL UJUETA

WILL UJUETA

School

Rutgers Business School

Rutgers Business School

Professor

Carmen L Bonilla

Carmen L Bonilla

Innovation

TerraCycle’s innovation is in their collaboration with communities, corporations, and individual consumers to incentivize the collection of waste products that are then either upcycled or recycled by TerraCycle itself. TerraCycle is unique in that it offers a multitude of platforms that help eliminate waste. One of their most innovative programs is their Zero Waste Box™ platform which provides customers with a sustainable way to dispose of their waste streams. Customers can either purchase a Zero Waste Box™ for specific forms of waste ranging from but not limited to things such as coffee capsules and markers or they can select to buy the all-in-one box which enables the recycling of nearly any product or item they wish to discard. According to Zach Fayer, TerraCycle’s brand manager, the most requested item customers are seeking to recycle are chip bags and then coffee capsules.

Once filled with garbage, these boxes are shipped back to TerraCycle who then manage the waste through either upcycling or recycling it - a solution that diverts billions of units of waste from landfills and incinerators. Fayer said that “99.9% of the materials [collected from the Zero Waste Boxes™] are recycled.” The other 0.1% of waste received is upcycled, meaning that all of the waste received is ultimately given new life by either being incorporated into new products or turned into raw recycled material.TerraCycle also provides solutions to other businesses who reach out in hopes of disposing of their waste in an eco-conscious manner. This system is enabled by TerraCycle’s “closed-loop solutions” platform which features an R&D team that works closely with business partners in order to figure out ways to use their waste materials to manufacture applications used by the business or to even turn the waste back into the original product.

For example, TerraCycle’s scientists can take industrial waste and separate it based on its different substances and from there, they can pelletize plastics which the business partner can reintroduce to their respective supply chain. This serves to reduce the need for raw materials extraction and promotes efficient and sustainable supply chain operations. Ultimately, TerraCycle’s entire business model is highly innovative as they are the only US firm to offer such unique and specialized solutions to waste. Not only do they collect waste, but they employ circular waste management processes that transform this waste into raw materials for corporations to use in the creation of their new products. TerraCycle stimulates the responsible production of the corporations it partners with which not only mitigates environmental damage by increasing sustainability but also reduces costs and thereby strengthens partner business models.

Thinking Differently About Waste

Inspiration

TerraCycle was founded in the fall of 2001 by then Princeton students Tom Szaky and Jon Beyer. Szaky was inspired by friends who fed food waste to red worms and then used their fertilizer to nourish house plants. From this, Szaky committed to making fertilizer from scraps - embedded in this, however, was the motivation that underlies TerraCycle’s business to this day: solving the problem of waste by helping consumers think differently about garbage. CEO Szaky highlights the fact that waste is a rather modern concept and does not exist in the natural world - rather, our conception of waste is a result of the increasing material complexity of consumer products whose externalities are compounded by society’s increasing rate of consumption.

Pivotal to TerraCycle’s mission is the fact that sustainable solutions exist for all waste products. The distinction between a recyclable and ‘non-recyclable’ product is not one of technical specifications, but rather of economics and money. Everything can be recycled, an idea exemplified by the fact that TerraCycle’s offices are furnished almost entirely by upcycled and recycled products; however, only items whose value exceeds the cost of collecting and processing are actually recycled because they can be later sold for a profit. This is where TerraCycle enters the equation by offering innovative solutions to waste streams that are traditionally thought of as non-recyclable through offering circular methods of waste management which view waste as a valuable resource that can be utilized to create further value rather than something to be disposed.

Overall impact

TerraCycle’s innovative solutions have proven to be instrumental in realizing Szaky’s vision to “eliminate the idea of waste.” TerraCycle’s Zero Waste Box™ platform provides individual consumers with a method to properly manage their waste that would have otherwise been unsustainably dealt with through linear solution channels. Also, through partnering with consumer product corporations, TerraCycle enables waste to be reused through their closed-loop solutions, significantly reducing the need for undeveloped resource extraction and usage. Eco-conscious customers are more inclined to support these types of companies and this serves to set a new precedent within the company’s respective industry that competitors must match if they wish to capture a similar level of value.

This serves to effectively “green” numerous supply chains indirectly. For example, P&G who makes Head and Shoulders, partnered with TerraCycle to reveal their first plastic shampoo bottle made entirely from recycled waste collected from European beaches. These initiatives will not only reverse and prevent environmental degradation, but will serve to propel other corporations within the industry to adopt a similar campaign in order to stay competitive which will amplify positive impacts. Although Szaky himself acknowledges that these initiatives will not completely solve the problem of waste on their own, they mark a significant step towards building a more sustainable future. For this reason, TerraCycle’s mission is heavily aligned with UN Global Goal 12 which seeks to produce and consume responsibly as TerraCycle facilitates the efficient usage of resources while tackling environmental issues that will aid in reducing future environmental costs.

Business benefit

Due to the uniqueness of its position and its highly innovative business model, TerraCycle has been steadily increasing its profits. In 2004, TerraCycle generated $77,000 in sales. In 2016, TerraCycle reported $19.3 million in revenue and these revenues are expected to increase. TerraCycle unveiled their new project at the World Economic Forum in Davos in January 2019. Called Loop, the program is a circular shopping platform that allows customers to purchase products in durable, reusable packaging and send the containers back when finished to be replenished. The program will further realize Szaky’s vision of eliminating the idea of waste.

One example that came up during our interview with Lauren Taylor, TerraCycle’s Global Director of Communications, was the question of shampoo. Taylor mentioned that “When you go to buy shampoo, you want what’s inside but not necessarily the packaging.” TerraCycle’s new initiative will seek to tackle the problem of excess waste from packaging by changing the way individuals consume. Along with this, TerraCycle has plans to go public in the near future which will present new investment possibilities. Also, by partnering with other businesses and greening their supply chains, TerraCycle enables these companies to promote and market themselves towards environmentally conscious consumers which is becoming ever more crucial as consumer preferences shift to environmentally sustainable and socially responsible businesses and products.

Social and environmental benefit

Through its various recycling platforms, TerraCycle has over 80 million people currently recycling and has raised over $21 million for charity. Along with this, TerraCycle has recycled over 4 billion units of waste and continues to process and collect hundreds of millions of pieces of waste per year. Through its involvement with 177 thousand waste collection centers in the US alone and its hundreds of partnerships with a variety of corporations and retailers, TerraCycle’s contribution and commitment to environmental sustainability is undeniable.

TerraCycle is also committed to motivating consumers to think about their consumption differently by enabling them to be conscious of their purchases and strive to either buy durable or used products or forego buying more products altogether. Furthermore, TerraCycle’s collection programs with schools helps raise awareness and educate children on the importance of recycling. This type of education is highly conducive to advancing UN SDG 12 as younger generations will heavily contribute towards development plans that will reduce pollution and environmental degradation by leading more sustainable lives.

Interviews

Lauren Taylor, Global Vice President of Communications

Zachary Fayer, Business Development Associate - Brand Management

Keep this story going! Share below!

TerraCycle

TerraCycle

Trenton, NJ, US

Business Website: www.terracycle.com

Year Founded: 2001

Number of Employees: 201 to 500

TerraCycle is a revolutionary waste management company that aims to eliminate all waste. They often work in conjunction with large companies such as Procter & Gamble in order to get their mission and brand out and to build buzz around recycling for environmentally conscious consumers.