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Ep.006 - Reinventing the Milkman - Laure Cucuron
Episode 616th December 2020 • The Spaceship Podcast • Laura Francois & Clement Hochart
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[00:00:00] Laure: We asked ourselves, before facing our waste crisis, how did we used to live? How did we used to consume products? And so we went back to this idea of the milkman, where at the time packaging was an asset for the companies. So it was in their interest to make these assets as durable as possible. Not because of the environment...because at the time in you know, late fifties, sixties, it was not yet an issue, but really because of economics. So the milk bottle had to be durable to be reused many, many times because it was simply an asset that would depreciate over time.

Clement: That's the voice of Laure Cucuron, the general manager for TerraCycle Europe.

She's talking about how TerraCycle looks to the past for inspiration for the future, modeling the e-commerce site Loop after your friendly neighborhood milkman. Loop brings the circular economy to your favorite brands through high quality [00:01:00] re-usable game-changing packaging. Imagine eating Haagen Dazs ice cream out of a durable container that is designed -- not only to combat single-use waste-- but to keep your ice cream cold for longer and allow you to get every last spoonful out of the pint.

You are listening to The Spaceship Podcast where we'll be speaking to entrepreneurs and global thought leaders to highlight the theories we cover in The Spaceship masterclass. If you are set on solving some of the world's biggest problems, check out thespaceship.org. Now let's give the mic to our guest.

Nice to meet you again, Laure and, um, would be nice if you can start by introducing what is TerraCycle that, uh, you have been working on for quite a long time, and describe what you do. And then we'll go and jump into, uh, the Loop and the different questions we have on the Loop concept.

Laure: Okay. Hi guys. So, [00:02:00] thank you so much for having me.

My name is Laure Cucuron. I'm the general manager of TerraCycle Europe and I'm based in London. And so what we do at TerraCycle and Loop, well we have a big mission. We say that we're in business to eliminate the idea of waste. So it's quite an ambitious one. So, uh, more concretely, what we do is that we develop and offer solutions on recycling and reuse mostly to FMCG companies that will enable them, and also enable us as consumers to move towards more sustainable consumption choice.

We've been operating since 2001. We originally were created in US by our CEO and founder, Tom Szaky, who was a student at the time. He developed our activities all across the world. Now we operate in 21 markets, uh, including 11 here in Europe and UK. And we have a lot of exciting projects [00:03:00] happening on the recycling side, but also on the reuse side.

Clement: Okay, thanks a lot for this quick introduction and yes, it's true.

It's a big mission. I'm curious to understand what was the key insight that made TerraCycle think of? "Wow. We need to create something like Loop."

Laure:  Yeah. So I think, so TerraCycle has been around for many years. And as I said, we started by understanding what were the challenges in the recycling industry. And I think at the time, we realized that there was very little innovation in the recycling world.

That's, you know, most of the recycling services were driven by costs. And, you know, we also looked into the economics of recycling and the fact that today, if some things are recyclable or not recyclable depending on the country where we operate, is not necessarily linked to the technicality of it. We think that we can recycle most product and packaging, but, [00:04:00] um, it's related to the economics of recycling, which means that, you know, the cost of collecting recycling, the waste is usually higher compared to the value of the recycled material that we obtain.

 So that's where we started to work on developing new services. We invested into R and D. We created the R and D team. And then we started to find solution for many different type of waste streams from flexible snack packaging, to cigarette waste to used pens.

Today we've developed many solutions, creating partnerships with brands who help us finance this initiative. And over time, you know, we realized that, in order to face the waste problem. It was critical to innovate in the recycling industry to enable more recyclability, but also look at helping brands and partners integrating more recycled contents in product and packaging in the first place.

[00:05:00] So these two aspects, we know that, you know, there's still so much we can do and that's also why TerraCycle is growing. But we also realize at some point, and I would say maybe about now four years ago, that it was not going to be the answer... the only answer.

And I remember at the time, we'd just launched a big project with Procter & Gamble, where we had them replace the plastic in one of their shampoo bottles using ocean plastics. And that was a big project for us. And we had the opportunity to, uh, be, uh, a devos with P&G when they announced this project. And at the time we were already thinking, what can we do next?

Because what we felt was important was to rethink completely the economics of waste and, and try to develop a model that will really help us to move from disposable packaging to reusable packaging. And that's how we created Loop and Loop is really the rebirth [00:06:00] of the milkman. So Loop is not necessarily a new idea.

Actually, we went back in the past, then we asked ourselves, before facing our waste crisis, how did we used to live? How did we used to consume products? And so we went back to this idea of the milkman, where at the time packaging was an asset for the companies. So it was in their interest to make these assets as durable as possible.

Not because of the environment, because at the time in you know, late fifties, sixties, it was not yet an issue, but really because of economics. So the milk bottle had to be durable, to be reused many, many times because it was simply an asset that would depreciate over time.

So there's really this idea. And we're thinking about rethinking the economics of packaging, that really motivated us to look into it and say, Could we use this model, but really, um, uh, you know, have a rebirth of it and make [00:07:00] sure that it could be modeled to answer the consumption needs as well of people today, because obviously a lot of things have changed since this time.

So that was really the initial idea in the moment where we thought we would have to create a reuse platform.

Laura: That's so interesting. I love this idea of going back in time and modeling yourself after, you know, a system that did work quite well in the past. I do have a question: do you feel as though... you said it yourself, you know, the recycling economy is one that depletes a lot of resources itself. Have you kind of given up on recycling by focusing, you know, Loop focuses on a completely different part of the system where there is no waste because you're keeping things in circulation, you're keeping it in the Loop. So have you given up on recycling?

Laure: That's a good question, we haven't. Um, we haven't, I think we see the development of, of Loop and reuse model in parallel of [continuing to innovate] [00:08:00] in the recycling industry.

And we do believe that the answer is probably, there's not going to be one answer, right? There's going to be different answers in order to face the waste crisis and develop a solution. And so no, it's not giving up. That said, who knows what's going to happen? Right. Once again, you know, we are a social enterprise, so we are a mission-driven enterprise and it's really to eliminate waste.

And today we do that by promoting developing recycling solutions and developing reuse solutions, but reuse is very new, right? And it's complex because we have to rethink completely the way we, uh, as consumers, when we use products and packaging, the retailers have to rethink the way they distribute this product and packaging.

 And brands have to rethink the packaging itself and the economics of packaging. So, you know, it might be that at some point we move to reuse completely, and that would be [00:09:00] great, but it's very early to know. And at this point we just think that we need to work on everything in parallel and then see where we'll have success.

Because it might be that in some categories it will work really well and in some others, it won't. I take an example, for example, dirty nappies is a good one. There's been brands that offer reusable nappies but... you know, I'm not a parent myself, but we also know that there could be some difficulties when it comes to the convenience of using them.

And that many parents have tried to switch and they went back to disposable because it was actually too much work for them to use reusable ones. So on some stream, you kind of feel that maybe reuse might not be the answer because what is important is to keep the convenience, right. I think that's where the challenge is.

And that's the same challenge for Loop is: How can we create a strong reuse platform that is [00:10:00] better for the environment than disposable models that we have today, but that creates an equivalent convenience and that's as affordable as single use. I think that's really. That's really the key question is, if we want to have a change at the big scales and convince many people to make this change, we need to find a way to make it convenient and affordable.

Laura: I'm so, so glad that you're bringing up this, the big C word, "convenience." Because I mean, a lot of the time I think to myself, well, if we constantly are striving for more and more convenient solutions, will we end up in a worse off place? And, this is a question I don't have an answer to, and I don't think anybody does, but it's so interesting that you bring this up because half of my brain thinks we need better design solutions that are convenient.

Everyone would jump on the bandwagon much more quickly, and we'll probably, you know, be able to reduce our [00:11:00] footprint much more quickly if it was efficient, but at the same time at, at a certain point, I wonder, you know, if it's all designed with this human centered design in mind and not environmental centered design in mind, are we, are we digging ourselves a bigger hole?

And I'd love to just put this out to you. Um, You know, maybe on a personal level, do you feel like the strive for convenience is still one of the most important things to consider as a startup in the environmental space?

Laure: Yeah, that's, that's such a good question. I think the easy answer would be, uh, It would be well, let's stop consuming and let's completely change our habits.

And, uh, let's make sure that everyone is able to do it. But the reality is that... that takes too much time. When you know, we've seen big changes over the past few years in consumption trends and reading again something in the UK around the war against plastics. And so there is a strong consumer awareness and the desire [00:12:00] from consumers and citizens to see a change.

But then at the same time, you need to have options out there that are affordable. And I think the convenience is still a key part of it. If you think about, for example, a bulk system in the retail environment. We hear a lot about supermarkets who are offering now bulk systems where you can buy different type of products without any packaging.

And that's great. And that's actually a train that's evolving and is evolving rapidly, but it's still a very tiny percentage of all the, uh, the purchasing today. And the reason why is that it's still asking too much of people, um. Because you have to bring your packaging, you have to carry your packaging. You have to then clean them at home.

And we're not even sure sometimes that it's actually the best solution for the environment. So I think it's, uh, For me, it's finding the balance. It's trying to design better services at better [00:13:00] offer, to convince people, to make a change without asking them to make too many efforts. Because I do believe that if we manage to do that, then we can try to go towards a change at the big scales.

But then I'm not saying that education and just rethinking our consumption model is not as important, right. Because that should be... for me, that should play a really big part of it as well. But I don't see one or the other, I really see both working together.

Clement:  And if I can add on this, I feel that, um, maybe on a personal level, I like the fact that probably there is a big gap to bridge in term of convenience of the circular economy today, but maybe in a later stage, we, as companies should not push towards more conveniency when we reach the level of expectation from the consumer today. And this gap has to be bridged, but maybe later on [00:14:00] as a consumer, we should not push for more convenience, but as a business, we should at least match what are the expectations of the consumers. But when you say you rethink the economics behind recycling and beyond waste, do you see the reuse as one answer to the economics and to making sure the, the economics behind reuse are more kind of affordable for the end consumer. And how did you discover it, or how did you make this, this kind of calculation?

Laure: Mm. Yeah. So if you take an example, if you'd like, the comparison between, uh, a disposable packaging or for example, um, a can of deodorant today.

And, you know, I don't know if we say for as an example, that today it costs 10 cents to the brand, and now you ask this brand to redesign that packaging for reuse. And, you know, you imagine that packaging can [00:15:00] be reused at least 10 times, but ideally could be designed to be reused 50 or a hundred times. So obviously the costs in the first place will be higher.

So you might have a packaging that's instead of costing 10 pounds will cost three pounds or three euros. And, but then obviously the cost per use will be, uh, much lower because this new packaging can be reused maybe fifty times, maybe more if it's designed for more uses. So then what you'll have to do is to add in the cost of cleaning.

Which is the key step, the new step within the supply chain. And then have the most optimized logistics that you can in order to make this work on the packaging side. On the brand side, you also have to think about the refill and that's also something that can make a big difference for some of the partners we work with because some of them have to rethink completely.

 For them, it's a new activity, you know, if you take like, uh, some of the beverage brands, [00:16:00] sometimes they kept refill system for their B2B offer for restaurants and so on. But, um, if you talk about some cosmetic brands, most of them have never done refills before. So these are like the cost you have to take into consideration more, uh, on the frontend.

And so the big goal for Loop is that, you know, we know that for this model to work and for the, uh, the business model to really work, we need scale. Uh, so we need, you know, a minimum number of packaging in circulation at the same time to create the economy of scale that then will make sure that we can have price parity between Loop products and just disposable products today.

And so that's why for us, it was so important to make partnerships with brands from the start and more particularly, really focusing our efforts on partnerships with retailers. So Loop can only work with the partnership of retailers [00:17:00] because Loop is not a platform that is aimed at becoming a, a retailer. That's not, that's not what we do.

We, we don't define ourselves as a retailer. If during the experience, we become a retailer, why not? But that's not what we're good at. What we're good at is really organizing the supply chain, creating this new supply chain, connecting the dots across the supply chain. But we need retailers for them to integrate this new, reusable supply chain within their existing model in order to get to scale, because then we can obviously access their existing database of users and consumers and offer the Loop solution to as many people as possible.

 And that's why in France, we started with Carrefour, that's why in the UK, we work with Tesco and, uh, you and many others around the world to really crack this integration, both online and then in physical store. So we can rapidly give the Loop service to as many people as possible and start, you know, building [00:18:00] volume and creating, uh, economies of scale.

Laura: Yeah. What I love about Loop, and one of the reasons why I was really excited tospeak to you is, is this idea of scale. Because in our typical generic startup consumerist society, when we talk about scale and scalability, and everybody wants to scale... it's typically not associated with the fact that, you know, in your situation, the more you scale, the more waste is avoided, which is so interesting.

Instead of thinking of scale as the more you scale, the more products will be out in the world or the more waste you might produce, or the much bigger of a carbon footprint you'll have. Like, it's such an interesting thing that, you know, for you, scalability, both in profitability and in waste reduction, go hand in hand. Which is such a great and interesting model.

And I guess as a follow up question to that, I think when you design these innovative models or when, you know, you draft out on paper and you're sketching out new ways that you can integrate a new solution, it never ends up [00:19:00] resulting in the same way that you might've hoped it did on paper. It's always like... plans never survive first contact with reality.

And so I'm wondering was the design of Loop and the concept of Loop, did it change when you first actually tested it out and, and you first modeled this out with, you know, the companies, the first group of companies that you worked with and the first supply chains that you tested this out with. Were there any big learnings when it comes to thinking of the model and thinking of the idea and then actually executing it and going, Whoa, Whoa, Whoa.

There's so much more than we need to learn, or so many things that we hadn't thought of.

Laure: Yes, completely. I think that we have as a company, we're all about piloting new ideas. We're all about launching something and learning from it. And that's really, you know, launching pilots and sometimes completely failing as well and then having to rethink the entire model.

And that's also why, you know, when we hire uh, new people, especially ones that are going to work on new [00:20:00] projects we're like, are you ready to fail? Because we know how this is going to go, right? And I think it's, it's, it's part of our culture as well. You know, entrepreneurship is one of our values and we will always try to have this agiligity of really adjusting the model if after piloting, itt's basically actually not the best way to do it. So, yes, for Loop... actually, there was a backstory I remember that, at some point, Loop was called phase two internally. That was the nickname we had for it, before it became Loop. And I remember that we were thinking about the positioning of it, and... Uh, at the very beginning, while not necessarily, thinking that we were going to do that for all the fast...

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