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TerraCycle – Getting Inspiration from Garbage

Fri, Aug 14, 2009

Green Business

If you are looking for a way to innovatively market your products and services, TerraCycle is a company worth learning about. The unique way they capitalize on waste has inspired me to view garbage in a whole new light. Their approach to waste has set them apart and I think other companies can benefit from applying a similar outlook toward waste. TerraCycle produces and packages their products entirely from waste and they have become pioneers in the world of eco-capitalism. Their unique story has been written about countless times and you can read all about it here. Padosa recently took a site visit to their Trenton, NJ headquarters.

TerraCycle Tour

Albe Zakes, VP, Media relations was our gracious and charismatic tour guide. TerraCycle’s initial product is fertilizer made from worm poop. We started our tour in the brew pit, learning all about worm poop and how it brews into fertilizer, similar to how one brew’s a tea bag. Luckily I am a coffee drinker. Then we moved on to my favorite spot – a colorful room filled entirely with reams of candy bag wrappers, boxes of used juice pouches and empty yogurt containers. Graffiti graces the walls. The folks at TerraCycle are really into graffiti. The outside of their Trenton warehouse is covered with it, as well as some of the inside walls. They bring in graffiti artists from all over the world and do interesting community oriented events with graffiti as one of the activities. Color and whimsy is a theme at TerraCycle.

Upcycling – Turning Garbage into Cool Stuff

What I liked about this vibrant waste room so much was learning about the amount of opportunity that we can create from garbage. This process of turning garbage into product is called upcycling and TerraCycle has revolutionized it. The company runs several “brigade” programs where they collect used drink pouches, candy wrappers, chip bags and yogurt containers from schools, churches and non-profits and they pay the organizations 2 cents per item. This “post-consumer” waste gets upcycled to produce pencil cases, messenger bags, tote bags, planters and countless other items that are sold at major retailers such as Target, Walmart and Home Depot.

The company is collecting 1.5 million post consumer non-recyclable drink pouches per month. As we were sifting through the large box filled with juice pouches, we saw several that had children’s names written in permanent marker. That made the whole process feel really authentic. I am definitely going to sign up my son’s grammar school to participate in the juice pouch brigade – it is such an effective way to raise money for schools, educate kids, and to reduce waste that would otherwise go to landfills and incinerators. By the end of this year, TerraCycle will have donated $250,000 to schools and non-profits. About that big box filled with drink pouches – it is a repurposed box. What that means is that TerraCycle purchased that box from a company that was going to throw it away for some reason. Everything from the large bins that house the worm poop to the boxes that contain the sorted post-consumer waste are throw aways from larger companies. There is just about nothing in that warehouse that doesn’t come from waste.

Post Industrial Waste

The reams and reams of candy wrappers, cookie and chip bag wrappers are considered post-industrial waste. They look perfectly fine to the average person but they are not acceptable to the manufacturer.There are numerous trivial sounding reasons for why the manufacturer discards their rolls of product packaging. If just one ingredient is changed or if the FDA amends their labeling requirements, the packaging is considered garbage. The slightest typo or graphic design anomaly will preclude the company from using the packaging. Or when the factory is at the end of printing a roll, that quality is considered inferior and is thus sent to the landfill. Albe said the staff rolled out a few of the reams and that one was over a mile long!

Garbage as a Commodity

The post-consumer waste gets sorted into separate bins – there is a drink pouch bin, a yogurt container bin, a candy wrapper/chip bag bin. As Albe was showing us the bin contents he shared a great quote from Tom Szaky, the founder and owner of Terracycle. Tom said that the only difference between TerraCycle and a landfill is that TerraCycle separates their garbage. When it’s grouped together it’s considered garbage but when it’s separated, it’s a commodity. That really resonated with me and provided me with a clear illustration for what they are all about.

Confetti Garbage

Some of the post-consumer waste they collect can’t be turned into products. There are three reasons:

  • They have more supply than demand. They collect garbage from over 35,000 locations and are not currently set up to handle this much waste.
  • Many of the items they receive can’t be used as they often receive wrappers from brands they don’t have licensing agreements with.
  • It takes a ton of time and labor to clean all these items and they are not equipped for the volume.

What they do with that unusable garbage is amazingly resourceful. Albe showed us a bin full of what looks like confetti. They take this discarded waste and grind it up into colorful pieces that is the basis of a new line of products. They are in the midst of researching and testing these new products which will open up a huge field of business for them. We tested one such product in their offices without even realizing it. When you first walk into the office section of their warehouse there is a floor mat which says, “Step on this.” Hoping it wasn’t a trap door, I stepped on this rubber like material and later learned that it was made from Frito-Lay chip bags, among other known brand wrappers. This flooring material is one of many items they are looking to develop for the green building industry. It’s really exciting to think about what this innovation means for TerraCycle but this is all in the development stage so more about that at a later date…

Partnering with Name Brands

One of their latest items is a backpack made from billboards. They are partnering with Yak Pak, a major manufacturer of backpacks to turn wasted billboard material into extremely sturdy backpacks. Each item carries both the TerraCycle and the Yak Pak moniker. Each one is unique. Considering how much waste is generated from a billboard, I was struck by how much garbage they are reducing by turning this raw material into a commodity. Partnering with successful brands through sub-licensing arrangements, such as with Yak Pak, is a new path they are pursuing with various companies in different industries.

Learning from TerraCycle

Visiting TerraCycle and learning about the myriad of opportunities that we can create from garbage was truly inspiring. Aside from the benefits to the environment, producing and packaging their products in waste enables TerraCycle to keep their pricing competitive and to reduce their fiscal bottom line. While a lot of what they do may seem to apply to the manufacturing business, no matter what business you are in, you can capitalize on waste. Take a look at your existing products and services and think about ways you can creatively market your business by helping the environment. Getting your customers involved, similar to how TerraCycle galvanizes their brigade participants is one way to set your organization apart and to build a community. Are the packages that house your products discarded after use? Perhaps there is a way for your customers to save them and turn them into something else? That is just one small example.There are so many ways to be inventive and resourceful. We’d love to hear your ideas for how you think your company can benefit from garbage. So please share with us in the comments section below or send us a note at info@padosa.com.

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