On February 1st, some of the biggest food manufacturers in Canada and the largest grocery chain announced that they are experimenting with a new method of packaging products. The new system, called Loop, delivers products in reusable packages, collects them once the consumer is finished, cleans and gives them back to the manufacturer to refill and send out again.

The go-to comparison, for the food manufacturers, including Kraft Heinz Canada and Nestlé Canada, and retailers participating in the pilot project is essentially the revival of the milk man. The service also nudges the Canadian manufacturing sector toward a closed-loop way of managing materials — a so-called circular economy — that many experts believe is key to reining in plastic pollution.

But the players invested in Loop also tend to describe the new system as a challenge to Canadian consumers to do something about plastic waste. Tom Szaky, the founder of Loop and chief executive of its parent company, TerraCycle US Inc., a New Jersey -based waste management company, went as far as saying consumers in Ontario, where the pilot is being done, hold “the fate of Loop” in their hands.

During the test, consumers can go to the Loop website to order select products in reusable packaging from participating manufacturers. The products are delivered, via FedEx, for a $25 flat fee, and arrive in a tote.

The $25 fee is part of what Szaky described as the clunkiness of the test platform, which still has some kinks to work out. “Please know we’re still losing money on every order,” he said. His company has invested US$25 million into Loop, and plans to invest an additional $25 million. “We think we’ll be in it for about US$50 million before it starts making money.”

It’s also less than ideal that a customer can’t do a full shop with Loop. And what happens if the ketchup bottle from Loop is finished, but the ice cream isn’t? Do you send it back and order another shipment, and pay more delivery fees, or go without until the ice cream is done?

But all those issues are only short-term hiccups, Szaky said. The plan is to ramp-up the program and get retailers to sell products in Loop packaging within their stores, which means all the challenges with delivery and fees “go away,” he said.

“It’s important that people support it, because that gives the indication to the brands and retailers that it’s important to scale this up,” he said. “When it scales, because the volume comes in, it should be something that still maintains a good price for the consumer, but starts making money for the brands, the retailers and Loop. But we really have to get the scale to achieve that.”

Previous pilots in the United States, United Kingdom and France have taken roughly a year before transitioning to stores, and shutting down the Loop e-commerce site. Scale is also the main factor in whether a system such as Loop can make any real dent in the plastic problem.

“This is, at least, definitely worth trying, right?” said Edwin Tam, an associate professor of civil and environmental engineering at the University of Windsor, whose work focuses on the push toward a circular economy — essentially a system that recycles materials and energy, and reduces their use, rather than commit them to landfill. “If anything,” he added, “in some ways, we’re returning to the way society may have been a long time ago, where resources were much more scarce.”

Loop is part of an intensifying push for new alternatives to single-use plastics in the manufacturing sector, according to the Food, Health and Consumer Products of Canada trade association. “Companies are looking at every opportunity to provide consumers with good alternatives,” said Michelle Saunders, FHCP’s vice-president of sustainability.

For example, Kraft Heinz Canada is putting its classic glass ketchup bottle into the Loop system for the Ontario pilot, hoping to reach 5,000 consumers. But the plan is to add more Kraft Heinz brands, which include Kraft Dinner and Kraft Peanut Butter.

For pilot participant Loblaw Cos. Ltd., a good test could lead to a scenario, in the near future, where shoppers drop off their dirty containers as they enter a store. But before that happens, consumers need to prove there’s demand for it. “The consumers told us plastic waste, packaging waste, is a concern to them,” said Ian Gordon, Loblaw’s senior vice-president of plastics. “We’re giving them an opportunity to do something about that. And if there is high consumer demand, we absolutely will respond to that.”

Loop has also struck a partnership with Toronto-based Restaurant Brands International Inc., which will test reusable cups and other packaging later this year at some Tim Hortons locations in the Greater Toronto Area, and at Burger King restaurants outside of Canada.

Source: Globe and Mail
Source: Financial Post