TerraCycle: Thinking Outside of the Cardboard Box
July 26,2024
Category: Packaging Development, Sustainability
Episode Summary:
Packaging best practices now encourage sustainability to be integrated into the process right from the beginning. However, the goal of achieving packaging that places just as much importance on the end-of-life as it does on getting to the consumer is not without its challenges. The innovative company TerraCycle aims to solve this issue. In an episode of our Unpacking Excellence podcast, we sit down with Tiffany Threadgould, GVP, Design and Engineering at TerraCycle, and discuss the successes of the Loop packaging system and how this returnable packaging platform is helping to close the circular economy.
In this episode, we cover:
About Our Guest
Tiffany Threadgould
GVP, Design and Engineering, TerraCycle
Tiffany Threadgould is a groundbreaking entrepreneur in the circular economy and sustainable material domains. With over 19 years of experience and commitment to designing sustainably thoughtful packaging solutions for consumers in global industries, she provides a unique style of leadership and objectiveness to each project she collaborates on. She has a strong design background and has been in her current role with TerraCycle for almost six years.
*At the time of recording, Dylan was a packaging design student at Michigan State University.
Listen to the Episode
00:00 - Intro
Powered by Adept Group, this is the Unpacking Excellence podcast. We’re bringing together top packaging professionals to share insights and knowledge on all things packaging. Now, introducing Adept Group.
0:00:17 - Adept
Thank you, Tiffany, for joining us today, and I'm really excited to talk about Loop. I appreciate it.
0:00:23 - Tiffany
Yeah, I'm excited to be here. I love spreading the message about circular economies.
0:00:27 - Adept
We can just jump right in. What is a circular economy, and where does Loop play a role in that?
0:00:32 - Tiffany
A circular economy is, rather than designing things to have an end of life, like in a landfill, designing products so that they loop back around, back into their initial purpose. It's creating a circular rhythm with products that exist, bringing them back to life and giving them another life.
0:00:53 - Adept
So when I first came across Loop it was after the big announcement at Davos. That was about a year ago or even less than that?
0:01:00 - Tiffany
It was January of 2019, so a little less than a year.
0:01:04 - Adept
Awesome. So it sounds like the initial markets were New York and Paris as the initial two?
0:01:10 - Tiffany
Yeah, so we've expanded a little bit beyond New York City, so it's within a day's delivery of New Jersey. It's a lot of the East Coast, so spanning from Boston to D.C. and then also in the Paris area - Paris, France. But we just announced some new plans to expand in the U.K. early next year and then, beyond that, we're going to be expanding to Germany, Japan, Australia and Canada too.
0:01:41 - Adept
Awesome, that's up in Toronto, right, or the Toronto area?
0:01:44 - Tiffany
Yep, up in Toronto. And then, we also have some plans for expansion within the U.S. So we'll be in retail stores on the West Coast and also have the online shipping service available to the West Coast sometime next year.
0:01:59 - Adept
Perfect. So what launched the idea of Loop, and what are you guys trying to accomplish with that?
0:02:05 - Tiffany
Sure. So for those not familiar with TerraCycle, TerraCycle is a global recycling company that figures out solutions for hardware materials. So I've been working for TerraCycle for over 10 years, and TerraCycle has been a company for over 15 years now. TerraCycle focuses on hard-to-recycle waste, like cigarette butts, potato chip bags, chewing gum, dirty diapers and all the weird things that don't have a municipal recycling solution. So it's great that we have things in place where we can solve for all of those weird materials.
But our CEO, Tom, was looking beyond that. It's like OK, so that's the solution for things that already exist, but what about envisioning a world where things don't become waste? So thinking back from the packaging side of things, before you create this packaging, you will need to figure out a way for it to be recycled. What if there was a way to create it so it was reused over and over so it didn't need to be processed at the end of its life and could just get cleaned, refilled and put back into the system? We took a look at reinventing. The milkman is what a lot of people compare this to. I like to think of it now as the milk person or the milk woman and relook at that and figure out how to use online technologies and new things that exist today and make the milkman system better. So that's where we started.
0:03:32 - Adept
I saw something that's interesting about the different ways of thinking and changing the packaging; just a commodity, just from a material into an asset, and if you can switch it over to something that is reusable and can be used over and over. It's a completely different way to think about the packaging process.
0:03:48 - Tiffany
Yeah, exactly. So by rethinking your packaging in this system, where it can be cleaned each time and reused, you can essentially put more money into the package because when you're extrapolating the cost of the packaging, you divide it out over 100 uses versus just one use. So it's shifting the thinking of taking the packaging as the one-time use and the amount of money that goes into it that one time, and it's dividing it out over the course of a lifetime. So if a package is designed to be used 100 times or more, you can spend a whole lot more on that package because the price per use is small.
0:04:24 - Adept
Yeah exactly, and to me, it's interesting how when you look back, especially if you look at beverages, we started out in glass, and it was really heavy and reusable. Over time, in terms of the lightweighting and the different packaging optimization work that gets done, it's gotten into less material. But the recyclability of that and how it affects the environment long-term has gone by the wayside as they just try to make those packages cheaper and cheaper and more optimal to ship to that supply chain.
0:04:52 - Tiffany
Yeah, and there are a lot of benefits to lightweighting. I think the statistics that I've read have said one or two in 10 soda bottles get recycled, and they’re easy to recycle. So by lightweighting, you're actually creating less material that ends up in landfills. But for the long-term effect, we all know plastics don't necessarily break down, and they get into our waterways, so rethinking that and figuring out a way to bring it back to the initial glass that it was packaged in can create a lot of benefits. I think it's a much nicer use to drink a beverage out of a glass container than out of pouches that we have now. And you can also add features to containers when you can spend more money on them.
0:05:42 - Adept
Yeah, absolutely. Personally, I always think everything tastes better in a glass as well, so it's kind of funny. You mentioned that we actually do some consumer testing around that and delighting the consumer; that glass does seem to be a preferred mechanism for that.
So I think a lot of our audience is packaging engineers or people in a packaging function. You guys talk about how it fundamentally changes the ownership of packaging. Can you talk a little bit about what that means to the brand and, as a packaging engineer, what that looks like?
0:06:10 - Tiffany
Sure. So you’re switching the ownership of the package. The consumer doesn’t really want the package most of the time. They want the product that's inside. The package just needs to be a way to deliver it to the consumer safely. As you know, you need to get your shampoo. It can't just be like a goopy liquid, but they don't really want that container, and then, they have to figure out what to do with it at the end.
So in the Loop system, you actually have this package that the consumer just puts a deposit down on. They don't own it, they use the product inside, and then they deliver it back to us to have it cleaned and then sent back to the initial company that filled the package. So in the example of shampoo, we'll use Pantene, which is on the Loop system from Procter & Gamble. Pantene essentially had to shift its thought process to rethinking what it meant to have these disposable containers, and it took buy-in at a very high level in order to make this work. We partnered with some of the biggest companies out there, from Procter & Gamble to Pepsi to Unilever and a number of others as well.
0:07:18 - Adept
And that's really what's going to make the Loop system work. Having a lot of different types of one-stop shops for this refillable service really impressed me the most. Even during the Davos announcement, there was a large amount of media placement, impressions and coverage that this had gotten. And obviously, there were a ton of different locations and a ton of different clients that we were talking to. Loop, and certainly this type of packaging, is not new, but it's definitely new to the discussion. It's a pretty impressive amount of engagement that you guys have been able to drive.
0:07:52 - Tiffany
Yeah, thanks. We're excited that the message is getting out there, and I think it really shows that this is the time for Loop. I think that 15 years ago when TerraCycle started, we needed to start with the low-hanging fruit at that time, which was the garbage issue and what were things we could do to solve the current situation? But now that we have some experience and TerraCycle has grown as a company, we can incubate this Loop concept, and we're a company that's grown quite a bit since then. I think when I started, we had about 25 people who worked here in Trenton, and now, we've expanded globally, and I think we have over 300 employees now, so tenfold. And I think that shows, too, how these large conglomerates have realized that by buying into this TerraCycle and Loop idea, it really shows that in 10, 20 years, they can't really be a business if they're continuing to package things in these disposable packages. We really need to think about the future and figure out how to solve this waste.
0:08:55 - Adept
Yeah, absolutely. So it's interesting on our part, from Adept’s point of view, we get brought in as consultants quite a bit on projects, and for a while, we get brought in just for sustainability, and the last few conversations that I've had with clients and prospective clients is that sustainability isn't necessarily a thing; it's just a way of doing business now.
So it used to sort of be stand-alone, like hey, we need to think about sustainability or sustainable projects. Now, in any new product development or packaging innovation, sustainability is just becoming part of the process. So it's shifted from the outside into a standard operating procedure of we need to be thinking about how we can be sustainable and be more sustainable in our packaging choices.
0:09:32 - Tiffany
Yeah. Ten years ago when I started, we didn't have a director of sustainability position at a lot of companies, and now, that's the norm. And yeah, I know packaging companies like Adept are starting to make that instrumental in the decisions that you're making.
0:09:53 - Adept
So my understanding on Loop is that there are two different models that customers can use, or clients can use the stand-alone and the integrated model. Can you talk a little bit more about those models and what the actual process looks like?
0:10:04 - Tiffany
Yeah, absolutely. So the stand-alone model is the online system, so anybody who's within the region of delivery. You fill up your shopping cart online, and then you check out and get a shipping tote along with whatever products you ordered shipped to you. You put a deposit down on each of the products, and then, there's a small deposit on the durable, reusable shipping tote as well. You have this at home. You use your product, you put the empties back in the shipping tote, flip the label over and send it back.
We check in all the packages, you get all the deposits credited back to your account and all the packages get cleaned, sent back to the manufacturer, refilled and go back into the loop. So that's how the stand-alone model works right now, and, as I mentioned, we're on the East Coast, in the U.S. and then in France, and then, we'll be expanding to the West Coast sometime in 2020. So that's the stand-alone model. On the integrated or in-store model, we don't have any open locations right now, but we have plans to have store locations sometime in 2020. And we already have partnerships announced with Kroger and Walgreens in the U.S., and then we have Carrefour and Tesco over in Europe.
0:11:20 - Adept
Can you talk a little bit more about the in-store model? So to me, I think that's the missing piece. I think that's been really crucial in seeing the scale, as a consumer. Can I walk into a store and see the products side by side? My understanding is it'd be relatively cost-effective, minus the deposit. I really see that driving consumer engagement. So is that the way that any store will take those returns back, or how does the process of returning back to a store like Kroger work?
0:11:46 - Tiffany
That's a great question. So the in-store model is going to be similar to the online model. The same products will be available. They'll be on a shelf, in a store, probably in a designated Loop section, so consumers can go in the store and take whatever products they want. At checkout, they'll be charged their deposit and then, once they get their products home, they'll use up the product and then bring their empties back to the store to get their deposit returned to them. So in states that have things like a bottle bill, a lot of consumers are already familiar with return kiosks, so it'll be some combination of areas where you can return your container and get a credit for every container that you bring back.
0:12:29 - Adept
So Adept is a certified Loop partner, so we actually have quite a bit of the packaging here, and I've seen some of the packages that are really, really interesting and attractive. Is it the way it's set up now? As a consumer, there are some of these packages that I would just literally keep and not put back into the system. So how does that work? Is it just covered in the deposit?
0:12:49 - Tiffany
Yeah, so the deposit basically covers the cost of the package. So if it doesn't get returned and just gets reused around the house, then that's fine too. So the cost of the package is covered in that so people can reuse them. We're just glad to see it get reused in any way it can. But the intent is really to deliver it back so we can refill it, clean it and have it go back in the system.
0:13:14 - Adept
Absolutely. So let’s talk a little bit about the test-and-learn process of creating durable packaging, and walk us through that side of it.
0:13:23 - Tiffany
Sure. So on the design side, my team is responsible for all of the assets and in guiding our brand partners on the packaging side of things. So that's where we create strategic partnerships, like with Adept, so we can help refer our brand partners. They might not have an in-house packaging department, so they're looking for an agency to help them. So we create strategic partners, like with Adept and others, to help guide that. And then on anything that we need to make the system work, like the shipping tote, any little small-items bag so your stuff doesn't roll around in there like an internal grid system pool chambers, my team takes a look at that and figures out new designs. So in the case of the Loop shipping tote, that's the biggest order we had to place in order to get the system working. We came up with a number of criteria of what the shipping tote had to do in order to deliver these products and break it down. On the shipping tote, we had to make some that basically replaced the carton box up to at least 30 shipping cycles. All the components had to be reusable and easy to clean and repair. It protected the contents inside. We didn't want to have any additional packaging, bubble wrap or anything else inside. We wanted to use recycled content wherever possible, and then all of the packaging needed to be recyclable at the end of the life. So that's where we started, and we went through a lot of integration there.
But we looked at different colors and a lot of different sizes, and a lot of it dictated itself. Some people have said that the size is a little big, and I'm actually a Loop customer too, and I don't disagree with that, but the size was actually dictated because we needed to put a cooling chamber inside for all of our frozen and chilled products. So, for our Häagen-Dazs and our Tropicana orange juice, we needed to be able to deliver those products cold or frozen, depending on what product it is, to the customer. So we needed a durable, reusable cooling chamber to go inside. So it’s dictated by the wall thickness of the cooling chamber and the reusable, frozen plates, called eutectic plates, that go inside.
So we didn't want gel packs that were single-use. We wanted the whole system to be durable. That's where we started and then figured out what colors worked, what kind of features we wanted to build into the packaging and how we wanted it to look. Loop has a little bit of a playful style, and of course, we have the arrows that we always play with on there, so that's how the look and feel came about with the Loop shipping tote.
0:16:12 - Adept
Yeah, and as you mentioned a little bit, you can do the cold chain side of it. Häagen-Dazs is obviously a big partner. I think that was one of the first ones that I saw around the ice cream package, which is also one of the ones that I would steal from the system as well. It's a really, really interesting package.
If you can, talk about a little bit of the packaging development, specifically for ice cream, which I think is a unique category.
0:16:35 - Tiffany
Yeah, I agree with you that the ice cream package is one of the coolest. I also like puns around the office, so it's cool, not just in the design but in the temperature. So basically, that designed itself in a way for Häagen-Dazs, the way they fill their package. They need to flash-freeze it. So they fill it in the filling line, and then, they have to make it cold right away. So they were looking at double-walled thermoses essentially.
But the problem was that when it's double-walled, you can't flash-freeze it. It doesn't get cold enough. Once it's cold, it doesn't heat up at room temperature as fast, so they like that benefit. But they needed to figure out a way to find this balance between the flash-frozen product and how to make it work with the packaging and adding the feature to the customer that it stays cold for longer in this package. What they did is they came up with this double-threaded container with an outer shell, the inner shell and then the lid. So it's basically a three-part package, and they had to go through a lot of processes as well. I think in one of the first samples we received, the thread went in the same direction. We ended up unscrewing the outer piece, which consumers shouldn't actually take off.
We were doing some consumer insight testing, and somebody got one, and it took them around an hour to let it cool to a cold-enough room temperature so that they could unscrew it. It was almost doing too good of a job. So in their next iterations, they reversed the threads, so the outer shell threads go one way and then the inner, where you just unscrew the cap, goes the way that it typically does. So that was really neat, and they had to go through a couple of other iterations. For instance, they tried some different textures on the container, but in the end, the bottom of the container is always the same style, and the lid is what has the flavor on it, so the body. They can swap that out as much as they want, but the lid is unique to what gets packaged inside. I thought there’s a really clever design.
0:18:43 - Adept
It was thought out. With the initial Loop launch, there was a good amount of stock packaging. I think that, as the brands were trying to figure it out and we're seeing more and more products come out, there was definitely much more thought and energy to be put into customized packaging, specifically for this channel.
0:18:59 - Tiffany
Right. A lot of our brand partners did a lot of custom packs. Some of them launched in stock packs, like things that they found off the shelf, and just customized the graphics on the outside because that was what was easiest to get them to launch. And now that we've gotten them into launch, they're all looking at their version 2.0 of packaging and really revving up the different types of features that they could add into the packaging and increase consumer delight.
0:19:30 - Adept
Yeah, so we're talking to packaging engineers here, and there are certain requirements and things that the packaging needs to do to make it through the process. The two big things are cleaning and labeling. So what are some of those requirements, or what are some of the limitations around what the package needs to be?
0:19:48 - Tiffany
On the cleaning side of things, our team came up with some specifics, and we worked with the FDA to find out what the regulations are in order to have a safe product in a system. It's similar to what you have in a lot of industrial restaurant settings where the containers have to withstand a cleaning temperature of at least 180 degrees without deformation. So that ruled out a lot of the plastics that we would use. I remember we knew PET wasn't going to be good for the system, but we put it through some wash tests, and it came back looking like a cylindrical container, almost soda bottle-like, but it came back looking like a pickle with how it had been all deformed.
So early on, we'd been working on Loop, about two years prior to our launch in Davos, so we had a lot of learnings from our system and figuring things out and figuring out the rules and regulations behind it. Also, in our cleaning system, we have some other requirements, like the mouth opening needs to be at least three-quarters of an inch in diameter so that the spray nozzles can get up in there and fully clean out the insides. We've done a lot of testing on inks and labelings, and for permanent labels, like the lid of the Häagen-Dazs container, the inks need to be set with a curing process, such as heat or a UV process, so that it doesn't come off in our wash cycles. And then, as far as the labeling goes, we recommend a BOPP label that goes on the outside, and our partners can decide whether they want that label to be removed each time or if they want it permanently adhered, and we can recommend adhesives that go along with that.
0:21:32 - Adept
So what Loop does, and with the value that Loop brings into this chain, you guys are doing the initial cleaning of the packaging. So the brand owner would get back a clean product, and prior to putting it in line, they would sterilize that in their current equipment. But you're doing the initial clean, which is a part that Loop is doing, correct?
0:21:49 - Tiffany
Yeah, in order to minimize water waste, we do all of our cleaning in an airtight room or a cleanroom, and it goes back into a package that will be sealed and secured. It gets packaged in that cleanroom so it can go back to the brand partner and get refilled straight from that packaging.
0:22:12 - Adept
Perfect, well, one of the other design topics are the actual aesthetics of it. What I found interesting as well was “aging gracefully.” I think that's a totally different mindset of typical packaging designed to look good once. So what are the different ideas you've seen, or what are some of the suggestions you have for aging gracefully in packaging design?
0:22:36 - Tiffany
Aging gracefully is a lot of what our brand partners are considering for the next version of their pack. So one of the cool things L’OR, one of our coffee partners over in Europe, is doing is coming out with a glass bottle. Some areas are exposed where it'll actually hit up against some of the other glass bottles and wear away, and where it's implanted with a logo, the logo will actually become more visible over use, and I think that's a lot of what's really cool about the character of these Loop containers. They're going to have dents, but that adds to the beauty of the packaging. I have a water bottle that's been with me through a lot of hikes and adventures, and I can remember times when I dropped it on a trail or something like that, and it got some dents and scrapes on it, and that's the history of that container that tells a story. So I think that's some of the benefits that our brand partners are starting to explore. Some idea starters that we give them as they're designing their next packages is to look at some materials that do wear over time, and it goes along with that aging gracefully idea that you mentioned.
So, patinas on copper and bronze, we found an example of something that has coffee in it. It stains the inside of the package, and you print a matte and shiny coating. The coffee absorbs into the matte finish, and it actually becomes more clear. Whatever is printed on there becomes more clear over time. Some of the early prototypes of our Loop shipping tote we put like a wax canvas. We put the Loop logo in a wax canvas imprint, and the idea was that it would wear more over time. So we're experimenting with that as we come out with our next Loop package. But right now, we just have the logo printed on the front, and we're exploring different ways to include them aging gracefully over time.
0:24:42 - Adept
Yes, it all sounds great. So, as a packaging engineer or a brand, how do they get in touch, or how do they get integrated into the Loop program?
0:24:50 - Tiffany
Oh, sure. If there are brand partners out there, getting in touch with our business development team is a great place to start, and for any packaging engineers looking to get involved with us, I think we have quite a few partnerships there, but we're always open to looking at new and innovative companies, and they could get in touch with us through the Loop website.
0:25:16 - Adept
That's great. Well, thank you again for joining us.
About Adept Group
Adept Group is a premier packaging partner for some of the most iconic brands in the food & beverage, CPG, pharmaceutical, medical device and industrial industries. Our team has expertise in over 60 specialized areas of focus and is the go-to for packaging needs, from cost optimization to regulatory compliance to design and engineering services. We work with clients to help them maximize the value of their packaging with personalized strategies specific to their industry and goals. Throughout the years, we’ve helped clients save hundreds of millions of dollars through cost-saving approaches to packaging that also coincide with sustainability efforts, helping build trust and credibility with consumers. If you have a packaging challenge, we’re up for it. Get in touch with our team of packaging engineering experts today to get started.
Packaging best practices now encourage sustainability to be integrated into the process right from the beginning. However, the goal of achieving packaging that places just as much importance on the end-of-life as it does on getting to the consumer is not without its challenges. The innovative company TerraCycle aims to solve this issue. In an episode of our Unpacking Excellence podcast, we sit down with Tiffany Threadgould, GVP, Design and Engineering at TerraCycle, and discuss the successes of the Loop packaging system and how this returnable packaging platform is helping to close the circular economy.
In this episode, we cover:
- Extrapolating packaging components that account for single- versus multi-use packaging
- How the Loop system has expanded to brands around the world with examples
- TerraCycle’s test-and-learn process of creating durable packaging
- The stand-alone and in-store Loop models
- What cleaning and labeling looks like in the Loop system
- Considerations for packaging design with the idea of “aging gracefully”
About Our Guest
Tiffany Threadgould
GVP, Design and Engineering, TerraCycle
Tiffany Threadgould is a groundbreaking entrepreneur in the circular economy and sustainable material domains. With over 19 years of experience and commitment to designing sustainably thoughtful packaging solutions for consumers in global industries, she provides a unique style of leadership and objectiveness to each project she collaborates on. She has a strong design background and has been in her current role with TerraCycle for almost six years.
*At the time of recording, Dylan was a packaging design student at Michigan State University.
Listen to the Episode
00:00 - Intro
Powered by Adept Group, this is the Unpacking Excellence podcast. We’re bringing together top packaging professionals to share insights and knowledge on all things packaging. Now, introducing Adept Group.
0:00:17 - Adept
Thank you, Tiffany, for joining us today, and I'm really excited to talk about Loop. I appreciate it.
0:00:23 - Tiffany
Yeah, I'm excited to be here. I love spreading the message about circular economies.
0:00:27 - Adept
We can just jump right in. What is a circular economy, and where does Loop play a role in that?
0:00:32 - Tiffany
A circular economy is, rather than designing things to have an end of life, like in a landfill, designing products so that they loop back around, back into their initial purpose. It's creating a circular rhythm with products that exist, bringing them back to life and giving them another life.
0:00:53 - Adept
So when I first came across Loop it was after the big announcement at Davos. That was about a year ago or even less than that?
0:01:00 - Tiffany
It was January of 2019, so a little less than a year.
0:01:04 - Adept
Awesome. So it sounds like the initial markets were New York and Paris as the initial two?
0:01:10 - Tiffany
Yeah, so we've expanded a little bit beyond New York City, so it's within a day's delivery of New Jersey. It's a lot of the East Coast, so spanning from Boston to D.C. and then also in the Paris area - Paris, France. But we just announced some new plans to expand in the U.K. early next year and then, beyond that, we're going to be expanding to Germany, Japan, Australia and Canada too.
0:01:41 - Adept
Awesome, that's up in Toronto, right, or the Toronto area?
0:01:44 - Tiffany
Yep, up in Toronto. And then, we also have some plans for expansion within the U.S. So we'll be in retail stores on the West Coast and also have the online shipping service available to the West Coast sometime next year.
0:01:59 - Adept
Perfect. So what launched the idea of Loop, and what are you guys trying to accomplish with that?
0:02:05 - Tiffany
Sure. So for those not familiar with TerraCycle, TerraCycle is a global recycling company that figures out solutions for hardware materials. So I've been working for TerraCycle for over 10 years, and TerraCycle has been a company for over 15 years now. TerraCycle focuses on hard-to-recycle waste, like cigarette butts, potato chip bags, chewing gum, dirty diapers and all the weird things that don't have a municipal recycling solution. So it's great that we have things in place where we can solve for all of those weird materials.
But our CEO, Tom, was looking beyond that. It's like OK, so that's the solution for things that already exist, but what about envisioning a world where things don't become waste? So thinking back from the packaging side of things, before you create this packaging, you will need to figure out a way for it to be recycled. What if there was a way to create it so it was reused over and over so it didn't need to be processed at the end of its life and could just get cleaned, refilled and put back into the system? We took a look at reinventing. The milkman is what a lot of people compare this to. I like to think of it now as the milk person or the milk woman and relook at that and figure out how to use online technologies and new things that exist today and make the milkman system better. So that's where we started.
0:03:32 - Adept
I saw something that's interesting about the different ways of thinking and changing the packaging; just a commodity, just from a material into an asset, and if you can switch it over to something that is reusable and can be used over and over. It's a completely different way to think about the packaging process.
0:03:48 - Tiffany
Yeah, exactly. So by rethinking your packaging in this system, where it can be cleaned each time and reused, you can essentially put more money into the package because when you're extrapolating the cost of the packaging, you divide it out over 100 uses versus just one use. So it's shifting the thinking of taking the packaging as the one-time use and the amount of money that goes into it that one time, and it's dividing it out over the course of a lifetime. So if a package is designed to be used 100 times or more, you can spend a whole lot more on that package because the price per use is small.
0:04:24 - Adept
Yeah exactly, and to me, it's interesting how when you look back, especially if you look at beverages, we started out in glass, and it was really heavy and reusable. Over time, in terms of the lightweighting and the different packaging optimization work that gets done, it's gotten into less material. But the recyclability of that and how it affects the environment long-term has gone by the wayside as they just try to make those packages cheaper and cheaper and more optimal to ship to that supply chain.
0:04:52 - Tiffany
Yeah, and there are a lot of benefits to lightweighting. I think the statistics that I've read have said one or two in 10 soda bottles get recycled, and they’re easy to recycle. So by lightweighting, you're actually creating less material that ends up in landfills. But for the long-term effect, we all know plastics don't necessarily break down, and they get into our waterways, so rethinking that and figuring out a way to bring it back to the initial glass that it was packaged in can create a lot of benefits. I think it's a much nicer use to drink a beverage out of a glass container than out of pouches that we have now. And you can also add features to containers when you can spend more money on them.
0:05:42 - Adept
Yeah, absolutely. Personally, I always think everything tastes better in a glass as well, so it's kind of funny. You mentioned that we actually do some consumer testing around that and delighting the consumer; that glass does seem to be a preferred mechanism for that.
So I think a lot of our audience is packaging engineers or people in a packaging function. You guys talk about how it fundamentally changes the ownership of packaging. Can you talk a little bit about what that means to the brand and, as a packaging engineer, what that looks like?
0:06:10 - Tiffany
Sure. So you’re switching the ownership of the package. The consumer doesn’t really want the package most of the time. They want the product that's inside. The package just needs to be a way to deliver it to the consumer safely. As you know, you need to get your shampoo. It can't just be like a goopy liquid, but they don't really want that container, and then, they have to figure out what to do with it at the end.
So in the Loop system, you actually have this package that the consumer just puts a deposit down on. They don't own it, they use the product inside, and then they deliver it back to us to have it cleaned and then sent back to the initial company that filled the package. So in the example of shampoo, we'll use Pantene, which is on the Loop system from Procter & Gamble. Pantene essentially had to shift its thought process to rethinking what it meant to have these disposable containers, and it took buy-in at a very high level in order to make this work. We partnered with some of the biggest companies out there, from Procter & Gamble to Pepsi to Unilever and a number of others as well.
0:07:18 - Adept
And that's really what's going to make the Loop system work. Having a lot of different types of one-stop shops for this refillable service really impressed me the most. Even during the Davos announcement, there was a large amount of media placement, impressions and coverage that this had gotten. And obviously, there were a ton of different locations and a ton of different clients that we were talking to. Loop, and certainly this type of packaging, is not new, but it's definitely new to the discussion. It's a pretty impressive amount of engagement that you guys have been able to drive.
0:07:52 - Tiffany
Yeah, thanks. We're excited that the message is getting out there, and I think it really shows that this is the time for Loop. I think that 15 years ago when TerraCycle started, we needed to start with the low-hanging fruit at that time, which was the garbage issue and what were things we could do to solve the current situation? But now that we have some experience and TerraCycle has grown as a company, we can incubate this Loop concept, and we're a company that's grown quite a bit since then. I think when I started, we had about 25 people who worked here in Trenton, and now, we've expanded globally, and I think we have over 300 employees now, so tenfold. And I think that shows, too, how these large conglomerates have realized that by buying into this TerraCycle and Loop idea, it really shows that in 10, 20 years, they can't really be a business if they're continuing to package things in these disposable packages. We really need to think about the future and figure out how to solve this waste.
0:08:55 - Adept
Yeah, absolutely. So it's interesting on our part, from Adept’s point of view, we get brought in as consultants quite a bit on projects, and for a while, we get brought in just for sustainability, and the last few conversations that I've had with clients and prospective clients is that sustainability isn't necessarily a thing; it's just a way of doing business now.
So it used to sort of be stand-alone, like hey, we need to think about sustainability or sustainable projects. Now, in any new product development or packaging innovation, sustainability is just becoming part of the process. So it's shifted from the outside into a standard operating procedure of we need to be thinking about how we can be sustainable and be more sustainable in our packaging choices.
0:09:32 - Tiffany
Yeah. Ten years ago when I started, we didn't have a director of sustainability position at a lot of companies, and now, that's the norm. And yeah, I know packaging companies like Adept are starting to make that instrumental in the decisions that you're making.
0:09:53 - Adept
So my understanding on Loop is that there are two different models that customers can use, or clients can use the stand-alone and the integrated model. Can you talk a little bit more about those models and what the actual process looks like?
0:10:04 - Tiffany
Yeah, absolutely. So the stand-alone model is the online system, so anybody who's within the region of delivery. You fill up your shopping cart online, and then you check out and get a shipping tote along with whatever products you ordered shipped to you. You put a deposit down on each of the products, and then, there's a small deposit on the durable, reusable shipping tote as well. You have this at home. You use your product, you put the empties back in the shipping tote, flip the label over and send it back.
We check in all the packages, you get all the deposits credited back to your account and all the packages get cleaned, sent back to the manufacturer, refilled and go back into the loop. So that's how the stand-alone model works right now, and, as I mentioned, we're on the East Coast, in the U.S. and then in France, and then, we'll be expanding to the West Coast sometime in 2020. So that's the stand-alone model. On the integrated or in-store model, we don't have any open locations right now, but we have plans to have store locations sometime in 2020. And we already have partnerships announced with Kroger and Walgreens in the U.S., and then we have Carrefour and Tesco over in Europe.
0:11:20 - Adept
Can you talk a little bit more about the in-store model? So to me, I think that's the missing piece. I think that's been really crucial in seeing the scale, as a consumer. Can I walk into a store and see the products side by side? My understanding is it'd be relatively cost-effective, minus the deposit. I really see that driving consumer engagement. So is that the way that any store will take those returns back, or how does the process of returning back to a store like Kroger work?
0:11:46 - Tiffany
That's a great question. So the in-store model is going to be similar to the online model. The same products will be available. They'll be on a shelf, in a store, probably in a designated Loop section, so consumers can go in the store and take whatever products they want. At checkout, they'll be charged their deposit and then, once they get their products home, they'll use up the product and then bring their empties back to the store to get their deposit returned to them. So in states that have things like a bottle bill, a lot of consumers are already familiar with return kiosks, so it'll be some combination of areas where you can return your container and get a credit for every container that you bring back.
0:12:29 - Adept
So Adept is a certified Loop partner, so we actually have quite a bit of the packaging here, and I've seen some of the packages that are really, really interesting and attractive. Is it the way it's set up now? As a consumer, there are some of these packages that I would just literally keep and not put back into the system. So how does that work? Is it just covered in the deposit?
0:12:49 - Tiffany
Yeah, so the deposit basically covers the cost of the package. So if it doesn't get returned and just gets reused around the house, then that's fine too. So the cost of the package is covered in that so people can reuse them. We're just glad to see it get reused in any way it can. But the intent is really to deliver it back so we can refill it, clean it and have it go back in the system.
0:13:14 - Adept
Absolutely. So let’s talk a little bit about the test-and-learn process of creating durable packaging, and walk us through that side of it.
0:13:23 - Tiffany
Sure. So on the design side, my team is responsible for all of the assets and in guiding our brand partners on the packaging side of things. So that's where we create strategic partnerships, like with Adept, so we can help refer our brand partners. They might not have an in-house packaging department, so they're looking for an agency to help them. So we create strategic partners, like with Adept and others, to help guide that. And then on anything that we need to make the system work, like the shipping tote, any little small-items bag so your stuff doesn't roll around in there like an internal grid system pool chambers, my team takes a look at that and figures out new designs. So in the case of the Loop shipping tote, that's the biggest order we had to place in order to get the system working. We came up with a number of criteria of what the shipping tote had to do in order to deliver these products and break it down. On the shipping tote, we had to make some that basically replaced the carton box up to at least 30 shipping cycles. All the components had to be reusable and easy to clean and repair. It protected the contents inside. We didn't want to have any additional packaging, bubble wrap or anything else inside. We wanted to use recycled content wherever possible, and then all of the packaging needed to be recyclable at the end of the life. So that's where we started, and we went through a lot of integration there.
But we looked at different colors and a lot of different sizes, and a lot of it dictated itself. Some people have said that the size is a little big, and I'm actually a Loop customer too, and I don't disagree with that, but the size was actually dictated because we needed to put a cooling chamber inside for all of our frozen and chilled products. So, for our Häagen-Dazs and our Tropicana orange juice, we needed to be able to deliver those products cold or frozen, depending on what product it is, to the customer. So we needed a durable, reusable cooling chamber to go inside. So it’s dictated by the wall thickness of the cooling chamber and the reusable, frozen plates, called eutectic plates, that go inside.
So we didn't want gel packs that were single-use. We wanted the whole system to be durable. That's where we started and then figured out what colors worked, what kind of features we wanted to build into the packaging and how we wanted it to look. Loop has a little bit of a playful style, and of course, we have the arrows that we always play with on there, so that's how the look and feel came about with the Loop shipping tote.
0:16:12 - Adept
Yeah, and as you mentioned a little bit, you can do the cold chain side of it. Häagen-Dazs is obviously a big partner. I think that was one of the first ones that I saw around the ice cream package, which is also one of the ones that I would steal from the system as well. It's a really, really interesting package.
If you can, talk about a little bit of the packaging development, specifically for ice cream, which I think is a unique category.
0:16:35 - Tiffany
Yeah, I agree with you that the ice cream package is one of the coolest. I also like puns around the office, so it's cool, not just in the design but in the temperature. So basically, that designed itself in a way for Häagen-Dazs, the way they fill their package. They need to flash-freeze it. So they fill it in the filling line, and then, they have to make it cold right away. So they were looking at double-walled thermoses essentially.
But the problem was that when it's double-walled, you can't flash-freeze it. It doesn't get cold enough. Once it's cold, it doesn't heat up at room temperature as fast, so they like that benefit. But they needed to figure out a way to find this balance between the flash-frozen product and how to make it work with the packaging and adding the feature to the customer that it stays cold for longer in this package. What they did is they came up with this double-threaded container with an outer shell, the inner shell and then the lid. So it's basically a three-part package, and they had to go through a lot of processes as well. I think in one of the first samples we received, the thread went in the same direction. We ended up unscrewing the outer piece, which consumers shouldn't actually take off.
We were doing some consumer insight testing, and somebody got one, and it took them around an hour to let it cool to a cold-enough room temperature so that they could unscrew it. It was almost doing too good of a job. So in their next iterations, they reversed the threads, so the outer shell threads go one way and then the inner, where you just unscrew the cap, goes the way that it typically does. So that was really neat, and they had to go through a couple of other iterations. For instance, they tried some different textures on the container, but in the end, the bottom of the container is always the same style, and the lid is what has the flavor on it, so the body. They can swap that out as much as they want, but the lid is unique to what gets packaged inside. I thought there’s a really clever design.
0:18:43 - Adept
It was thought out. With the initial Loop launch, there was a good amount of stock packaging. I think that, as the brands were trying to figure it out and we're seeing more and more products come out, there was definitely much more thought and energy to be put into customized packaging, specifically for this channel.
0:18:59 - Tiffany
Right. A lot of our brand partners did a lot of custom packs. Some of them launched in stock packs, like things that they found off the shelf, and just customized the graphics on the outside because that was what was easiest to get them to launch. And now that we've gotten them into launch, they're all looking at their version 2.0 of packaging and really revving up the different types of features that they could add into the packaging and increase consumer delight.
0:19:30 - Adept
Yeah, so we're talking to packaging engineers here, and there are certain requirements and things that the packaging needs to do to make it through the process. The two big things are cleaning and labeling. So what are some of those requirements, or what are some of the limitations around what the package needs to be?
0:19:48 - Tiffany
On the cleaning side of things, our team came up with some specifics, and we worked with the FDA to find out what the regulations are in order to have a safe product in a system. It's similar to what you have in a lot of industrial restaurant settings where the containers have to withstand a cleaning temperature of at least 180 degrees without deformation. So that ruled out a lot of the plastics that we would use. I remember we knew PET wasn't going to be good for the system, but we put it through some wash tests, and it came back looking like a cylindrical container, almost soda bottle-like, but it came back looking like a pickle with how it had been all deformed.
So early on, we'd been working on Loop, about two years prior to our launch in Davos, so we had a lot of learnings from our system and figuring things out and figuring out the rules and regulations behind it. Also, in our cleaning system, we have some other requirements, like the mouth opening needs to be at least three-quarters of an inch in diameter so that the spray nozzles can get up in there and fully clean out the insides. We've done a lot of testing on inks and labelings, and for permanent labels, like the lid of the Häagen-Dazs container, the inks need to be set with a curing process, such as heat or a UV process, so that it doesn't come off in our wash cycles. And then, as far as the labeling goes, we recommend a BOPP label that goes on the outside, and our partners can decide whether they want that label to be removed each time or if they want it permanently adhered, and we can recommend adhesives that go along with that.
0:21:32 - Adept
So what Loop does, and with the value that Loop brings into this chain, you guys are doing the initial cleaning of the packaging. So the brand owner would get back a clean product, and prior to putting it in line, they would sterilize that in their current equipment. But you're doing the initial clean, which is a part that Loop is doing, correct?
0:21:49 - Tiffany
Yeah, in order to minimize water waste, we do all of our cleaning in an airtight room or a cleanroom, and it goes back into a package that will be sealed and secured. It gets packaged in that cleanroom so it can go back to the brand partner and get refilled straight from that packaging.
0:22:12 - Adept
Perfect, well, one of the other design topics are the actual aesthetics of it. What I found interesting as well was “aging gracefully.” I think that's a totally different mindset of typical packaging designed to look good once. So what are the different ideas you've seen, or what are some of the suggestions you have for aging gracefully in packaging design?
0:22:36 - Tiffany
Aging gracefully is a lot of what our brand partners are considering for the next version of their pack. So one of the cool things L’OR, one of our coffee partners over in Europe, is doing is coming out with a glass bottle. Some areas are exposed where it'll actually hit up against some of the other glass bottles and wear away, and where it's implanted with a logo, the logo will actually become more visible over use, and I think that's a lot of what's really cool about the character of these Loop containers. They're going to have dents, but that adds to the beauty of the packaging. I have a water bottle that's been with me through a lot of hikes and adventures, and I can remember times when I dropped it on a trail or something like that, and it got some dents and scrapes on it, and that's the history of that container that tells a story. So I think that's some of the benefits that our brand partners are starting to explore. Some idea starters that we give them as they're designing their next packages is to look at some materials that do wear over time, and it goes along with that aging gracefully idea that you mentioned.
So, patinas on copper and bronze, we found an example of something that has coffee in it. It stains the inside of the package, and you print a matte and shiny coating. The coffee absorbs into the matte finish, and it actually becomes more clear. Whatever is printed on there becomes more clear over time. Some of the early prototypes of our Loop shipping tote we put like a wax canvas. We put the Loop logo in a wax canvas imprint, and the idea was that it would wear more over time. So we're experimenting with that as we come out with our next Loop package. But right now, we just have the logo printed on the front, and we're exploring different ways to include them aging gracefully over time.
0:24:42 - Adept
Yes, it all sounds great. So, as a packaging engineer or a brand, how do they get in touch, or how do they get integrated into the Loop program?
0:24:50 - Tiffany
Oh, sure. If there are brand partners out there, getting in touch with our business development team is a great place to start, and for any packaging engineers looking to get involved with us, I think we have quite a few partnerships there, but we're always open to looking at new and innovative companies, and they could get in touch with us through the Loop website.
0:25:16 - Adept
That's great. Well, thank you again for joining us.
About Adept Group
Adept Group is a premier packaging partner for some of the most iconic brands in the food & beverage, CPG, pharmaceutical, medical device and industrial industries. Our team has expertise in over 60 specialized areas of focus and is the go-to for packaging needs, from cost optimization to regulatory compliance to design and engineering services. We work with clients to help them maximize the value of their packaging with personalized strategies specific to their industry and goals. Throughout the years, we’ve helped clients save hundreds of millions of dollars through cost-saving approaches to packaging that also coincide with sustainability efforts, helping build trust and credibility with consumers. If you have a packaging challenge, we’re up for it. Get in touch with our team of packaging engineering experts today to get started.