This article was originally published in the September 2018 Trenton Downtowner.
Tom Szaky, CEO of Terracycle, has built the entire business on recycling. Now he’s ready to move past it.
That’s not to say that the company has abandoned its ambitious stated mission of “eliminating all waste.” Rather, it has found a way to do that while cutting out the “throwing things away” part completely.
Trenton-based Terracycle’s latest line of business is a “loop” system for replacing single-use product containers with durable ones that can be easily cleaned and replaced — waste eliminated with no recycling required. Szaky says Terracycle is partnering with major brands to do this with hundreds of products that typically come in throwaway bags and bottles that end up in landfills.
For example, instead of buying a plastic bottle of shampoo, you would buy a high-quality, durable aluminum one, paying a $2 or $3 deposit to the retailer. When it’s time for a new bottle, you return the empty bottle to the store and pick up a new one.
It’s no more expensive for the consumer but cuts down on waste. Szaky says it also means a more attractive home, since the higher quality containers are more esthetically appealing than the plastic and cardboard trash they are replacing. Szaky showed a reporter pictures from the home of an employee who was trying an experimental version of the program. The worker’s pantry had gone from a typical mess to a magazine photoshoot-worthy collection of metal containers.
Over the years, Terracycle has thrived on its ability to overhaul its business model. Back when it was founded in 2001, its only product was a fertilizer spray made from worm poop. Today the only place you can find the “worm tea” product is the Terracycle headquarters, where they keep a few old bottles of the stuff around.
Szaky says worm poop fertilizer was abandoned not because it was a bad seller, but because he wanted to take the company in a different direction.
“This grew from $70,000 to $3 million,” Szaky says. “It was growing nicely, but we realized we were making the product the hero. We wanted to make the garbage the hero.”
Garbage is certainly the hero at the Terracycle headquarters, a former newspaper distribution center on New York Avenue where the furniture consists of miscellaneous castoffs from God knows where. Dividers are made of old vinyl records or plastic soda bottles, and the floor is artfully mismatched linoleum tiles. No two chairs are alike. In fact, almost every furnishing and piece of decor is a castoff from somewhere else.
The Thunderdome esthetic of the office though, isn’t as jury-rigged as it might appear. Behind the scenes, a team of designers is building the furnishings and decorations that are used in Terracycle’s Trenton headquarters and its outposts in London, Toronto, Sao Paolo, and Monterrey, Mexico.
‘People tend to think of recycling as boring, But it’s not boring. It’s innovative.’
Terracycle’s Trenton headquarters includes an outbuilding as well as the main building where the offices are located. Both are intentionally covered in graffiti by area artists. (Bringing in local street artists is a Terracylce tradition, and the spray-can artwork is now four or five layers deep.)
The smaller building is a workshop for Tiffany Theragould and her team of makers, who make everything from Pepsi bottle catapults to Dorito bag dresses. Some of these are product prototypes, others are one-off set pieces for the offices. Theragould has been working at Terracycle since she graduated from the Pratt Institute with a master’s in industrial design.
“My graduate thesis was actually called ‘trash nouveau,’” she says.
Theragould has had plenty of work over the past year or so as the company has expanded rapidly. In March it acquired Air Cycle, a waste recycling company in Chicago that specializes in fluorescent bulbs.
Over the past 18 months it has increased its staff from 130 to 210 and is in the midst of a $20 million stock offering to fuel further growth (U.S. 1, November 1, 2017). This stock offering is a “Regulation A” offering, a relatively new invention that allows the general public, not just the mega-rich, to take part in the investment. The minimum stock buy is only $700. (Most IPOs typically start at $50,000 and go up from there.)
Interviewed in April, CEO Szaky said the company has raised about $1 million so far, mainly from small stock purchases.
There have been a few bumps along the road, however. Last year Terracycle entered into an ill-fated partnership with Juicero, a Silicon Valley startup that made a $700 machine that made juice by squeezing pulpy packets into a cup. Terracycle agreed to accept and recycle discarded juice packets. Juicero collapsed after a reporter discovered the proprietary packets could be squeezed nearly as well by hand, rendering the expensive machine nearly pointless.
Szaky says that in retrospect, he saw Juicero as an opportunity to keep its products out of the landfill, even though Juicero ultimately was not a success. “We’re here to plug into any company that has a recycling problem,” he says.
“People tend to think of recycling as boring,” Szaky says. “But it’s not boring. It’s innovative. We constantly find new ways to recycle things that used to belong to landfills.”
Indeed, Terracycle has its own R&D department that figures out new ways to recycle various kinds of products. For example, Terracycle has a line of business recycling cigarettes by taking the filters and melting the plastic down into pellets that can be re-used in other products.
Terracylce has not patented this process or any of its other recycling methods. Instead, Szaky says, it relies on non-disclosure agreements with its partners.
“If a patent is out, competitors could download the patent,” he says. “Then we would have to spend money suing them. Or they could change it a little bit and circumvent the patent.”
Rick Zultner, director of process and product development at Terracycle, leads a team that has helped find ways to recycle K-cups, chewing gum, drink pouches, and diapers.
“We’re reverse engineering products,” Zultner says.
Typically, plastics are recycled by finding a way to melt them down and then reconstitute them into a different kind of product. Terracycle is exploring different ways of using 3D printing as part of this process.
But despite his success in tackling difficult-to-recycle products, Zultner is fighting what may be a losing battle. Consumer products companies are inventing ever more complex packaging that is more and more difficult to melt down and re-use. For example, Zultner says, something as simple as a potato chip bag actually contains three different materials: two kinds of plastic, plus a metal inner layer laminated together.
That’s one reason for Terracycle’s new “loop” program.
“The concept of ‘waste’ is gone,” Szaky says. “There’s nothing to recycle, nothing to dispose.”
Terracycle, 121 York Avenue, Trenton 08638. 609-393-4252. Tom Szaky, CEO. terracycle.com.