Tom Szaky, the founder and CEO of TerraCycle, is known for recycling the unrecyclable—cigarette butts, chewing gum, diapers—but last year, as he watched the business model for recycling crater (in part because it’s not profitable to recycle many of the new, lighter, more flexible plastics), he had an epiphany.
Recycling was a way to manage the ongoing garbage crisis, but it isn’t the solution to it, he said, speaking at the Fortune CEO Initiative on Tuesday morning. Szaky wanted to get at the waste crisis’ root cause—which he says is the prevailing culture of disposability (i.e. the fact that we throw many things away after a single use, from coffee cups to ice cream containers, and feel no sense of ownership towards them).
The problem, he realized, was largely packaging. Over the years, companies have designed for disposability—focusing on ways to make the containers, wrappers, cups, and other thing-holders as cheap and convenient as possible. That’s why food and drink and packaged goods companies, according to Greenpeace, are the biggest creators of plastic waste.
Szaky’s solution to all this is a platform called Loop, which turns the current model on its head. Working with partners that run from Kroger and Walgreens to P&G and Colgate, the new venture incentivizes companies to create the most durable and valuable packaging they can. (Loop members buy their Haagen-Dazs ice cream, Tide detergent, and other goods in stainless steel containers, which they return, and are cleaned by Loop.) Szaky said another megabrand signs on as a partner every two days.
“We’re shifting ownership back to the producer,” noted Szaky, who added that while the model is an old-fashioned one (think milkman), the shift has led companies to be far more innovative in their package design to better serve customers. Soon, said Szaky, Loop will notify its customers when their goods like pasta sauce are about to expire. Its brand partners gain from the data they’re able to gather about what products are sold and which containers come back.
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