Loop expands beyond e-commerce to US stores - The Entrepreneurial Way with A.I.


Wednesday, September 29, 2021

Loop expands beyond e-commerce to US stores


Dive Brief:

  • Loop, a reusable packaging program from TerraCycle, has announced it will soon offer some of its products in select U.S. and Canadian retail stores. The program offers products from well-known brands in specialized returnable containers.
  • Loop will roll out the program "in the coming weeks" at some Fred Meyer stores in Oregon, and will follow up with pilots at several Burger King and Tim Hortons locations later this year. Walgreens, Ulta Beauty and other retailers are expected to join the program early next year, said CEO Tom Szaky during a presentation last week. Woolworths in Australia will also join.
  • The expansion pivots Loop from an e-commerce site to also having a presence in brick-and-mortar retailers with a "buy anywhere, return anywhere" model. Pilots have already started at Tesco and McDonald's in the United Kingdom, Aeon in Japan and Carrefour in France. Worldwide, the Loop portfolio includes about 500 products from over 150 companies, Szaky said.

Dive Insight:

Loop is among many businesses attempting to infuse the consumer goods market with more reusable packaging in an effort to reduce virgin plastic and divert packaging from disposal. More and more packaged goods companies are working on implementing reuse pilots, according to the Ellen MacArthur Foundation, a proponent of reusable packaging options. Yet the share of reusable packaging has not increased much from 2019 and made up less than 2% of the market by weight in its 2020 progress report

Szaky sees consumers as a critical force in expanding reuse systems by "voting every day" with their dollars to tell major brands they want reusable alternatives to single-use packaging. However, reuse systems need to be convenient in order to attract a bigger influx of users, he said, and Loop's retail venture is meant to entice more shoppers to buy reusable versions of products they already purchase.

"Customer acceptance will determine how fast we can scale this across the company, so we'll be looking closely at customer engagement: How products perform, how they show up on the shelf, and and then ultimately sales will be a really important aspect," said Keith Dailey, vice president of corporate affairs at Kroger, which will begin offering products in Loop containers later this year at some of its Fred Meyer stores.

TerraCycle first introduced the Loop concept in 2019 during the World Economic Forum, first as a home delivery service where customers purchased products in reusable containers online and returned empty containers in a mailable bag. With the new in-store model, Loop products will be grouped together in the same aisle, along with the bin for returns. Customers pay a refundable deposit on the packaging and get the deposit back via the Loop app when they return the container.

Szaky believes the retail portion of the Loop model will help the concept go from a mere pilot to a larger, more sustainable part of the global reuse infrastructure. Consumers are already familiar with reuse programs like those for propane tanks and beer kegs, Szaky said, but he believes those types of programs don't see major use because "you're not able to take the propane tank to the beer store or vice versa." Shoppers of Loop-packaged products could buy ketchup in a reusable bottle from Tesco, then return the empty container to a McDonald's, he said. 

Convenience is critical to any sustainable, successful reusable container system, said Elizabeth Balkan, director of Reloop Americas, a nonprofit that works on circular economy and packaging design issues. "It needs to be as easy to use as the conventional packaging," she said. "You're not just asking the early adopters, the environmentally conscious consumer to take part. You need to make it easy to use for everyone."

McDonald's has been monitoring its reusable cup pilot to see if customers are returning the containers as often as they had hoped. "Even in the early stages of this partnership with Loop, we've been learning that our customers don't want to compromise between a sustainable choice and the convenient one," said Jenny McColloch, chief sustainability officer, during the announcement event. 

Return rates for specific stores or pilots weren't immediately available, but during the launch announcement, Szaky said consumers return about 80% of Loop's packaging within 60 days of purchase, and some consumers may keep the containers to use again at home. 

Though many reusable container programs get initial hype for creating innovative packaging, Balkan said the true metric of a program's success is whether consumers actually return the containers. "The functional metric is how many reusable containers are being put back into the system. If it's not a very high number, the scalability is called into question," she said. Loop wants its branded containers to last for at least 10 cycles to get the full environmental benefit compared to single-use packaging.

In order to get a clearer picture of how well reuse systems around the world are doing, and to spur further action in the reuse space, "the recycling rate and reuse rate should be measurable and fully transparent at every stage of the lifecycle," she said. 

Retailers can also leverage their brand recognition to ratchet up reuse options for consumers, Balkan added. "We're hoping to see retailers acknowledge and embrace the role they stand to play in this," she said, suggesting that retailers could make public commitments to offer reusable packaging in stores or commit to selling a certain percentage of products in reusable containers. 

At the state and local level, Balkan said, legislation that supports reuse initiatives could also help amplify the cause, alleviating the burden on consumers to lead the charge. Others hope to see reuse integrated into extended producer responsibility or deposit return systems. 

Some industry players have also shared concern over whether some reuse programs are accessible enough. When Loop first launched its e-commerce concept, some users expressed surprise at how much they had to pay, with deposits for items available through Loop's retail venture ranging from 15 cents for a Coca-Cola bottle to $10 for a Clorox wipes package, Reuters reported

In a recent report on corporate initiatives to reduce plastic pollution, the Break Free From Plastic coalition said Loop "gets a lot of positive press and is a pioneer of the concept, yet this targets mid- to high-end consumers with disposable incomes and is therefore not very accessible or inclusive of those on lower incomes."

via https://www.aiupnow.com

Megan Quinn, Khareem Sudlow