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TerraCycle

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For the bicycle manufacturer, see TerraCycle (bicycle).
TerraCycle
Company typePrivately held company
IndustryWaste management
FoundedSeptember 2001; 23 years ago (2001-09)[1]
FoundersTom Szaky
Jon Beyer
Headquarters
Trenton, New Jersey
,
U.S.
Number of locations
21 countries
Key people
Tom Szaky (CEO)
ProductsGoods made from recycled products
ServicesRecycling
RevenueIncrease $19.3 million (2016)
Websiteterracycle.com

TerraCycle is a private U.S. recycling business headquartered in Trenton, New Jersey. It primarily runs a volunteer-based recycling platform to collect non-recyclable pre-consumer and post-consumer waste, and then partners with corporate donors or municipalities to turn it into raw material to be used in new products. The company licenses its name to manufacturers of roughly 200 products made using its raw material. TerraCycle also manages Loop, a consumer products shopping service with reusable packaging.

History

2001–03: Founding and investments

TerraCycle was founded by Tom Szaky and Jon Beyer in the fall of 2001.[2][3] In 2002, the company bought a US$20,000 continuous-flow composting system invented by Harry Windle of Gainesville, Florida, to take organic waste and have it processed by worms into fertilizer.[3][4][5] The dining halls of Princeton University were the first sources of waste used.[3][6]

Initial funding came from family and friends of Tom Szaky and Jon Beyer, as well as awards from business plan competitions.[3][7] TerraCycle received media attention when it turned down a one million dollar venture investment opportunity awarded through the Carrot Capital Business Plan because the investors planned to change TerraCycle's business model.[3][7] Further funding came from private investors.[3][7] The first investor was Suman Sinha, who gave $2,000 in exchange for 1% of the company stock.[3][8]

2004–06: Vermicompost

TerraCycle's "plant food" packaged in reused bottles and reject spray bottle tops.

Instead of pure fertilizer, TerraCycle sold its products in liquid form.[6] The company made this decision upon concluding that liquid fertilizer could have better consumer reception, as well as production advantages.[9][specify] The original purpose for packing its liquid fertilizer in used plastic bottles was because the company could not afford new ones.[10][11] Later, the company continued this process and marketed their gardening products as "Waste in Waste".[10][12] Schools and local organizations collected bottles for TerraCycle in exchange for proceeds in what became known as the "Bottle Brigade".[3][13]

Maintaining intellectual property rights, The Coca-Cola Company gave TerraCycle a license to use its bottles in TerraCycle products.[14][15] PepsiCo also gave TerraCycle a license to use its distinctively shaped bottles.[16]

In 2004–5, Home Depot Canada and Wal-Mart Canada began carrying TerraCycle products.[3][17] Other companies followed. During its growth, the company bought an abandoned mansion to house its interns and a warehouse for its fertilizer production and offices.[6]

2007: Scotts Miracle-Gro lawsuit

The Scotts Miracle-Gro Company sued TerraCycle in 2007, claiming false advertising and trade dress violations.[13][18] In response, TerraCycle started a media campaign known as "suedbyscotts.com".[19][20] Scotts claimed that TerraCycle's choice of colors was too similar to its own products.[21] Scotts eventually dropped the case upon an agreement with TerraCycle to alter TerraCycle's product packaging.[19] TerraCycle agreed to recolor its packaging to orange and green as well as remove pictures of fruits and vegetables on its labels.[22] Issues over product comparison claims on TerraCycle's packaging were also resolved.[22] In the settlement, Scotts required TerraCycle to host a copy of the agreement on suedbyscotts.com.[22]

2007–present: Sponsored Waste and Beyond

In 2007, TerraCycle developed waste solutions[buzzword] and Brigade collection programs for Honest Tea, Stonyfield Farm, and Kraft Foods.[2] Seth Goldman, founder and CEO of Honest Tea, asked Szaky for a waste solution[buzzword] to its Honest Kids brand.[10][23] As Tom Szaky himself designed sample products for the aluminum-plastic pouches, including pencil pouches and tote bags, Goldman agreed to sponsor the Drink Pouch Brigade.[10][23] Upon deals with Safeway, Target, and Walgreens to buy the products, TerraCycle acquired approximately 20 million baled juice pouches stored by Encorp in British Columbia, Canada, which contained many Capri-Sun pouches.[10][17][24] Because of intellectual property and trademark rights, TerraCycle sought out permission from Kraft to use Capri-Sun brand pouches in its products.[10][25] They obtained additional sponsorship for the Drink Pouch Brigade as well.[10][25] Programs for other Kraft brands, such as Oreo and Chips Ahoy, soon followed.[10][25] The same year, co-founder Jon Beyer left TerraCycle to work at another company, Princeton Asset Management Group.[26]

In 2008, TerraCycle partnered with Target to sell recycled Target plastic shopping bags fused together as reusable bags named "reTotes".[10] At the end of the year, TerraCycle lost $4.5 million.[23] As a result, the company changed its manufacturing processes to use pre-consumer extra and misprinted packaging labels from other companies in its upcycled products.[23][27] TerraCycle changed to use the majority of its collected post-consumer waste for recycling into plastic molding pellets.[23] Around 2008, it ended its Bottle Brigade program.[28]

2009: Launch to the European market

TerraCycle launched in the UK in September 2009 (its first market in Europe) and today operates in 12 European markets (UK, Republic of Ireland, France, Germany, Netherlands, Belgium, Spain, Switzerland, Austria, Norway, Sweden and Denmark).

In the UK, TerraCycle currently runs collection programmes for cracker biscuit and cake wrappers, crisp, nuts, pretzels and popcorn packets, baby food pouches, Pringles cans, writing instruments, air and home care waste, toothbrushes and toothpaste tubes, Aqua Optima water filters, pet food packaging, contact lenses, personal care and beauty products / packaging, Tassimo & L’OR coffee pod / TDISC waste and cigarette waste.

To date in the UK, TerraCycle's programmes have diverted over 57 million items of packaging waste from landfill (around the weight of a jumbo jet) while earning over £744,000 for schools, charities and non-profit organisations[29]

By 2009, TerraCycle moved away from manufacturing to licensing all of its products.[23][30] As of the same year, it outsourced its vermicompost production to worm farmers in North Carolina.[31]

From 2012, TerraCycle and various tobacco companies partnered to launch a widespread collection and recycling system for cigarette butts.[32] The cigarette filters, generally made from cellulose acetate, are refined into pellets that are then used in the production of plastic items such as shipping pallets, benches, and ashtrays.[33] The company promises that the recycled plastic from cigarette filters will only be used in industrial products and not in household plastics, due to exposure to nicotine.[33] The recycled cellulose acetate is mixed with other recycled plastics to create usable industrial products.[33] Tobacco and paper are composted in this program.[32][34] It took six months for the development of the process required to recycle cigarette butts.[33]

On January 29, 2014, Progressive Waste Solutions announced a 19.99% interest acquisition in TerraCycle Canada to cooperate on recycling initiatives in Canada.[35]

In October 2016, TerraCycle and Suez Environment announced that Suez acquired 30% of TerraCycle's European operations to develop collection and recycling programs in Europe.[36] At the World Economic Forum in January 2017, TerraCycle, Procter & Gamble and Suez announced production of the world's first recyclable shampoo bottle made from plastic recovered from beaches, rivers and waterways for the Head & Shoulders brand. The first bottles went on sale in France in June 2017 and in October the project was recognized by the United Nations as a winner of a Momentum For Change Lighthouse Activities Award.

Products and services

TerraCycle has created approximately 200 products, all of which are licensed to manufacturers, instead of being manufactured by TerraCycle itself.[23]

TerraCycle began with the production of fertilizer made from vermicompost, which is produced by feeding organic waste to worms. The worms' excrement was then liquefied into "compost tea" by mixing it with air and warm water in large vats.[37] It was packaged in reused plastic water bottles.[3][13] The spray bottle tops were rejects from other companies.[3][7] Residue left over from the vats was used in potting soil and seed starter products.[37][38]

File:DrinkPouch Backpack (14292644375).jpg
A TerraCycle backpack made from Capri-Sun juice pouches.

The company diversified its production into upcycling around 2007 and began creating products from other waste items.[2] For example, it makes coin pouches and tablet cases from retired U.S. Postal Service bags.[31] Various products are produced from pre-consumer waste and post-consumer waste, including messenger and tote bags.[28][31]

Plastic packaging waste, that is not upcycled, is recycled into a raw material that can be used in plastic products, including playgrounds, plastic lumber, plastic pavers, bike racks, park benches, and garbage and recycling cans.[39][40]

TerraCycle's recycling programs enable individuals or groups to collect specified waste materials in exchange for donations to a selected cause or school.[2][25] Users sign up over the Internet,[25] and shipping and donation costs are generally covered by a sponsoring company related to the specified recycling program.[23][31] The waste materials, typically non-recyclable, are either refurbished, upcycled, or recycled.[41][42]

At the World Economic Forum in 2019, TerraCycle unveiled Loop, a closed-loop reusable packaging platform for consumer packaged goods companies.[43] The system ships via UPS a variety of food, household cleaning, personal care products in a reusable padded container. The products are dispensed from reusable metal and plastic containers, which are returned in the same container when empty.[44]

Criticism

TerraCycle keeps its branding prominent on its partner's recycled products.[45] This has raised concern that consumers could think of the brands themselves as "green" or "eco-friendly" while the product is probably only "upcyclable", not fully recyclable. TerraCycle products are not recyclable any further.

TerraCycle has also been criticized by some people for the relatively small volume of material it collects for recycling in comparison to the total amount of such packaging that is produced by manufacturers each year,[46] while noting that in the US, after over 40 years of regulations requiring recycling of materials (glass, paper, rigid plastic and certain metals), recycling rates are under 35% where recycling is economically viable.[47]

Corporate identity

According to Tom Szaky, the name TerraCycle "came up at the beginning [as] the idea of 'earth' and 'cycle'."[11] Szaky thought up the name with another Princeton University student during a road trip from New Jersey to Florida.[48] The TerraCycle company logo is a green infinity symbol with two arrows pointed toward one another. Szaky designed the logo during a lecture at Princeton.[30]

Television show

TerraCycle was the subject of a National Geographic reality television series named Garbage Moguls.[49] The pilot premiered on Earth Day, April 22, 2009.[10] The show featured the TerraCycle team searching for solutions to various waste streams.[10][31]

In 2014,[50] now defunct Pivot launched Human Resources, a reality TV series providing a behind-the-scenes look at day-to-day operations at TerraCycle's headquarters.[51]

Web game

See also: Trash Tycoon

TerraCycle partnered with game developer Guerillapps to make a Facebook-based flash game known as Trash Tycoon.[52] The game was launched in 2011,[12] and it mimics TerraCycle's actual business model.[52] Major sponsors for the game include Carbonfund.org and Treehugger.com.[52] Revenue is generated through the inclusion of brand logos within the game and the use of virtual currency.[53] TerraCycle receives 25% of the advertising revenue but none of the virtual currency revenue.[54] The game donates 10% of its revenues to Carbonfund.org.[52]

In the game, players take on the roles of recycling entrepreneurs who perform actions, such as upcycling and composting.[52] Avatars collect litter from the streets, completing missions to earn points.[55][56] The game features synchronized multiplayer play.[52]

Corporate affairs

The front of TerraCycle's headquarters.
An inside view of the TerraCycle office in Trenton, New Jersey.

Headquarters

TerraCycle's main headquarters are located in Trenton, New Jersey. The office was originally a 20,000 square feet (1,900 m2) abandoned warehouse for a newspaper distribution facility.[21][57] The headquarters were purchased by TerraCycle in the summer of 2004.[58] Its renovations were done by TerraCycle's internal design team, led by employee Tiffany Threadgould,[49] and its walls are painted annually by local graffiti artists at "Graffiti Jams".[3][23][25]

Finances

As of 2013, TerraCycle maintains a one percent profit margin.[42] Tom Szaky reported TerraCycle sales in 2004 as $77,000; 2005 as $500,000; 2006 as $1.6 million; 2007 as $3.3 million; 2008 as $6.6 million; 2009 as $7.3 million; and 2010 as $13.5 million. The company hit $19.3 million in 2016 and expects to surpass $20 million in 2017. In fall 2017, TerraCycle US Inc., the U.S. subsidiary of TerraCycle, Inc., announced it has filed for a Regulation A offering with the U.S. Securities and Exchange Commission (SEC) that allows anyone the opportunity to invest in the recycling company's U.S. subsidiary.[59]

See also

References

  1. ^ "Company Overview of TerraCycle Inc". Bloomberg Businessweek. Retrieved 25 July 2013.
  2. ^ a b c d Shambora, Jessica (13 May 2011). "One man's rubbish is Terracycle's bounty". Inner City 100. CNN Money (Cable News Network). Retrieved 6 April 2014.
  3. ^ a b c d e f g h i j k l Burlingham, Bo. "The Coolest Little Start-Up in America". Inc. Magazine. Retrieved 30 March 2014.
  4. ^ Jo Piazza (July 28, 2002). "Garbage In, Garbage Out. A Princeton Success Story". New York Times. Retrieved 14 April 2010. By October Thomas Szaky, a sophomore from Canada who is majoring in economics, hopes to have his worm-based waste management business, Terracycle International Inc., meet a goal of disposing of 15 tons to 30 tons of organic waste a day in Princeton Township. {{cite news}}: Cite has empty unknown parameter: |coauthors= (help)
  5. ^ Read, Stuart; Wiltbank, Robert (3 September 2010). "Where there's muck there's brass". Ideas. Business Life (British Airways). Retrieved 10 April 2014.
  6. ^ a b c Szaky, Tom (2013). Revolution in a Bottle: How TerraCycle is Eliminating the Idea of Waste. New York, New York, USA: Penguin Group. ISBN 978-1-59184-595-9.
  7. ^ a b c d Strauss, Robert (10 April 2005). "But the Employees Are Really Spineless". The New York Times Company. Retrieved 7 April 2014.
  8. ^ Field, Anne. "Where There's Muck, There's Brass". Immpreneur.com (F. Peacock Enterprises, LLC). Retrieved 10 April 2014.
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  10. ^ a b c d e f g h i j k Feldman, Loren (2009). "Garbage mogul makes millions from trash". CNN Money. Cable News Network. Retrieved 7 April 2014.
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  12. ^ a b Allen, Natalie; Knight, Matthew. "Recycling the world's trash into cash". CNN. Retrieved 10 April 2014.
  13. ^ a b c Rob Walker (May 20, 2007). "The Worm Turns". New York Times. Retrieved 2010-04-14. {{cite news}}: Cite has empty unknown parameter: |coauthors= (help)
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  26. ^ Beyer, Jon. "Jon Beyer on LinkedIn". Retrieved 6 April 2014{{inconsistent citations}}{{cite web}}: CS1 maint: postscript (link)
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  29. ^ says, Robert Johnston (2019-04-03). "Eliminating the Idea of Waste: Interview with Stephen Clarke (TerraCycle)". eco-. Retrieved 2019-09-03.
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  34. ^ Smith, Bridie (4 March 2014). "Australia gets cigarette butt recycle scheme with TerraCycle". Brisbanetimes.com.au. Fairfax Media. Retrieved 7 April 2014.
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  39. ^ Green, Penelope (10 August 2011). "Making Design Out of Rubbish". The New York Times. Retrieved 10 April 2014.
  40. ^ Dwass, Emily (2 November 2012). "It's A Wrap: TerraCycle and Mars Co-Produce Plan to Stop Flow of Candy Packaging Into Landfills". LA Weekly, LP. Retrieved 10 April 2014.
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  43. ^ Marie Mohan, Anne (17 July 2018). "TerraCycle to unveil 'Loop'". Greener Package. Retrieved 28 July 2018.
  44. ^ Loop Store
  45. ^ "My issues with TerraCycle". minimizingentropy.com (Blog). 22 July 2010.
  46. ^ "Yoyo, Reco, TerraCycle… Complimentary or competitors?". Dechets info. Retrieved 15 February 2017.
  47. ^ "Advancing Sustainable Materials Management: Facts and Figures". www.epa.gov. Retrieved 18 May 2018.
  48. ^ Szaky, Tom (2013). Revolution in a Bottle: How TerraCycle is Eliminating the Idea of Waste. New York, New York, USA: Penguin Group. p. 28. ISBN 978-1-59184-595-9.
  49. ^ a b Bhasin, Kim (25 August 2011). "PHOTOS: Inside TerraCycle's Incredible 99% Recycled Office". Business Insider.com. Retrieved 6 April 2014.
  50. ^ https://www.imdb.com/title/tt3833240/?ref_=ttfc_fc_tt
  51. ^ http://www.takepart.com/pivot/human-resources
  52. ^ a b c d e f Lombardi, Candace (7 September 2011). "TerraCycle launches waste-to-profit Facebook game". CNET. Retrieved 10 April 2014.
  53. ^ Empson, Rip (8 June 2011). "Multiplayer Facebook Game Trash Tycoon Trains You To Be Green (But In A Fun Way)". Tech Crunch. Retrieved 10 April 2014.
  54. ^ "Terracycle taps Facebook game to encourage connection with consumers". NJ Biz (Journal Multimedia). 13 July 2011. Retrieved 10 April 2014.
  55. ^ Dumitrache, Alina (16 September 2011). "Trash Tycoon Upcycling Game Launches on Facebook". Softpedia. Retrieved 10 April 2014.
  56. ^ Green, Penelope (11 August 2011). "A Facebook Game Teaches 'Upcycling'". NY Times Green Blogs. The New York Times Company. Retrieved 10 April 2014.
  57. ^ Szaky, Tom (10 October 2011). "A Recycling Company's New Office Reflects Its Ethic". You're the Boss Small Business Blogs. The New York Times Company. Retrieved 6 April 2014.
  58. ^ Szaky, Tom (2013). Revolution in a Bottle: How TerraCycle is Eliminating the Idea of Waste. New York, New York, USA: Penguin Group. p. 81. ISBN 978-1-59184-595-9.
  59. ^ Szaky, Tom (27 June 2011). "Why I Tend to Project a Little High". You're the Boss Small Business Blogs. The New York Times Company. Retrieved 7 April 2014. Our sales have grown from $77,000 in 2004 to $500,000 in 2005 to $1.6 million in 2006 to $3.3 million in 2007 to $6.6 million in 2008 to $7.3 million in 2009 and to $13.5 million in 2010.
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