Startup Aims to Reduce Plastic With Refillable Packaging

After a successful pilot, Loop’s “milkman model” program is set to roll out nationwide by July 1.

June 18, 2020

ALEXANDRIA, Va.—When the coronavirus pandemic hit, U.S. governments and businesses changed their tune on reducing single-use plastics. Instead, they embraced disposables as a safer, more hygienic option. That could have been a problem for Loop, a new shopping service that sells everything from ice cream to laundry detergent in reusable containers, but according to CNN, that effort has reported sudden sales increases and is about to expand in a big way.

Loop launched as a pilot last year in the Northeastern U.S. (and Paris) and expects to expand to the rest of the 48 contiguous states by July 1. This move could take Loop from a small experiment serving 10,000 customers to a huge initiative, and it will test how committed Americans are to ditching single-use plastics. Kroger and Walgreens have announced plans to eventually carry Loop’s products on store shelves.

“What we’re not seeing is any consumers concerned about reuse in light of the virus, which is incredible," said Tom Szaky, CEO of TerraCycle, a recycling company based in Trenton, New Jersey, and the driving force behind Loop. “I’m very, very happy about that.”

In 2017, Szaky first pitched the idea of Loop, which he describes as a “milkman model” operation, to the world’s largest consumer goods companies at the World Economic Forum in Davos. He convinced many major brands that Loop would allow them to cut down on waste. Last year, Loop became a reality, offering a small selection of products from Procter & Gamble, Unilever, Nestlé, PepsiCo and Clorox, among others.

Here’s how Loop works. Customers create an account and fill up a basket on LoopStore.com. In addition to the regular cost of the products, customers must put down a fully refundable deposit for each package, usually $2 to $5 per item. In the U.S., the merchandise arrives via UPS in a Loop tote bag. There’s a $20 flat shipping rate.

Dozens of products are available, from branded shampoos and foods to no-name staples like coffee and oats. As customers use up those products, they fill up the totes with the empty containers, which they’re not required to wash. Then, they just drop them back into the Loop tote, which is picked up by a UPS driver and shipped to an industrial cleaning facility in Pennsylvania. After the containers are cleaned, they’re refilled and sent out again. Customers can keep repeating the cycle or opt out and recover their deposits.

Shopping through Loop does require consumers to change certain behaviors and mindsets. Rather than order from established e-commerce platforms, such as Amazon, they must trust an upstart, shell out the deposit and commit to sending back the empty containers. That was a challenge before the pandemic, and the crisis could have easily delivered a death blow to the service, especially now that customers are also hyperconcerned about hygiene. But people weren’t scared off, and Loop’s sales have surged.

“March, April, May have all set records,” said Szaky, who believes that the quick shift to online grocery shopping gave the business a boost.

Customers have come to trust Loop’s cleaning process, which takes place in industrial clean rooms, where workers wear protective gear, he said. “Health and safety protocols and industrial cleaning processes are in place in our reuse system,” he said.

Like other essential businesses during the COVID-19 pandemic, Loop has had to deal with supply chain challenges. In some cases, the unanticipated demand for a certain product, such as Clorox wipes, caused Loop to run out of stock more quickly than expected.

The pandemic has also slowed the growth of Loop’s portfolio of products. Some companies that recently committed to joining Loop are waiting until the pandemic passes. Still, Szaky is confident that Loop will be able to meet the explosion in demand he anticipates. Of Loop’s initial 10,000 users in its pilot program, only about 100 people have abandoned the project, he said, and there are about 100,000 people on a waitlist.

Note: The content in this story is part of a "Risk Takers" TV special. It airs on CNN on Saturday, June 20 at 2:30 pm ET.

Loop is included in NACS Magazine’s look at “Sustainable—and Safe” packaging in the June issue. Read it now at NACSMagazine.com.

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