July 14, 2024

You’re the Boss: What If We Just Tell Everyone to Send us Their Waste?

Sustainable Profits

The challenges of a waste-recycling business.

I started TerraCycle almost a decade ago with a goal of making a profit by eliminating waste, and today our company offers free collection programs for more than 45 waste streams in the United States, along with similar programs in 15 other countries. The premise is simple: sign up on our Web site, fill a box with a specific type of waste, send it TerraCycle and we’ll donate 2 cents (or the foreign equivalent) for every unit of waste to the charity or school of your choice.

We have been able to demonstrate that we can handle major volumes of waste and that there is strong consumer demand for such a program. We collect, for example, about a million juice pouches from consumers every two days in America alone. The challenge is that our business model relies on brands, such as Capri Sun, to sponsor those programs — including paying for the shipping. As a result, our growth has been directly proportional to the appetite of these brands to build the programs. While our growth has been strong, both domestically and abroad, I have been looking for a way to increase the amount of waste we collect without having to rely on the brands. The fact is, we’d like to collect all nonrecyclable waste — we’ve identified 300 categories — instead of just the ones for which we’ve found sponsors.

There are other companies that will accept specific waste streams if you, the consumer, pays the bill. Most have focused on hazardous waste that shouldn’t be put into the trash, like batteries and compact fluorescent light bulbs. Battery Solutions, for example, will sell you a box to send in five pounds of batteries for $24.95. Basically this is the same business model TerraCycle has used — except that in this case, the consumer pays for the shipping instead of a big brand like Duracell or Energizer.

And that’s what got me thinking: what if TerraCycle were to offer a solution for every waste stream — regardless of whether we’ve secured a sponsor. If we don’t have a sponsor, consumers who are willing to pay can finance the program themselves. For example, we don’t yet have a sponsor to collect frozen food bags, so until we do, consumers can pay the fee we would otherwise ask a brand to cover. If and when a brand decides to sponsor that category, the program would become free to consumers.

My assumption is this: of the more than 22 million people collecting waste for TerraCycle now, many are doing so for  environmental reasons and not for the two cents per unit of waste that is donated to their favorite school or charity. That suggests that there may be a market for folks who are willing to pay to recycle or to upcycle waste. That said, I am not sure how many people will pay to recycle more waste — but with this experiment I am willing to bet that many will.

The project started last year when our research and development team began to identify and develop solutions for every consumer waste stream we could think of, from dirty diapers (they turn into park benches) to batteries (smelted for metal recovery). After a great deal of research by our scientists, we concluded that there was no type of consumer waste that we could not turn into a new product or material, removing the need to extract virgin material from the planet. Bottom line: if people send us their waste, we know we can recycle and/or upcycle it sustainably. So, over the last year, we evaluated costs associated with each waste stream and carefully developed the program.

We didn’t do market research to determine whether consumers will be willing to take the time and foot the bill for the costs. But then, we didn’t do market research to see if people would collect waste in our brigade programs, and we were pleased to find great receptivity in this country and abroad. Also, we’re not going to spend any money on marketing until we’re convinced that there is some minimal level of demand to build on,

The program is now two weeks from Phase One introduction -– I say “Phase One” because we expect the program will require lots and lots of tweaking. We have no idea what types of waste people will send — but if the program works, it will create a business unit and it will help us lessen our dependence on the big brands to sponsor what we do and greatly expand the waste collection services we offer.

Even at this late date, we’re not sure what to call this thing. We started with “World of Waste” — but it turns out that it’s trademarked. So for now, our working title is “TerraCycle for Hire.” But I’m not sold. Any suggestions?

Tom Szaky is the chief executive of TerraCycle, which is based in Trenton.

Article source: http://feeds.nytimes.com/click.phdo?i=30b4da27ddaf49b54d7fa9b3b3cfdd13

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