Calling on the `wisdom of the milkman model'

Some of the biggest brands in the country are testing a new packaging and retrieval system to help rein in plastic pollution

TORONTO • A New Jersey-based waste management firm announced it is testing its new packaging system in Canada, backed by some of the biggest brands in the country as well as the biggest grocery chain, Loblaw Cos. Ltd.

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 and retailers involved in this pilot project announced Monday, is essentially the revival of the milk man, and 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.

“Loop hearkens to the wisdom of the milkman model, but where it's different is that the milkman was for just milk,” said Tom Szaky, the Toronto-born founder of Loop and chief executive of its New Jersey parent company, TerraCycle US Inc.

Szaky was quick with other comparisons, such as the beer bottle return system in many parts of Canada, “but instead of just for beer, imagine it meets everything — like, really everything,” he said.

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. Szaky went as far as saying consumers in Ontario, where the pilot is based, hold “the fate of Loop” in their hands.

During the Ontario test, consumers can go to the Loop website to order select products in reusable packaging from participating manufacturers, including Kraft Heinz Canada and Nestlé Canada. 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.

“Then everyone’s role normalizes, right? The brand sells to the retailer, the retailer sells to the consumer, and then we act as effectively the waste management function of the ecosystem,” Szaky said.

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.

“If we manage to succeed in all of this, I do see this increasing over time,” said Bruno Keller, president of Kraft Heinz Canada. “I’m sure that many Canadians will embrace the opportunity, knowing that they’re reducing the footprint to the new generations.”

That appears to be the main question behind the whole test. For Loblaw, 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.”