The Food Journal and Food, Nutrition & Science

An alliance between The Lempert Report and The Center for Food Integrity

TerraCycle

TerraCycle

Sustainability

July 26, 2009

In 2001, Princeton University students Tom Szaky and Jon Beyer formed TerraCycle, a company that takes materials that are challenging to recycle and turns them into high quality goods. Their first product, an organic fertilizer made from organic waste composted by worms and packaged in used soda bottles, was the world’s first mass-merchandise product entirely made from and packaged in waste. We talked to co-founder Szaky about the importance of creating a space where environmentalism and capitalism can not only co-exist, but also help each other thrive.

How did TerraCycle become a reality?

While a freshman at Princeton University, I was struck by the tremendous amount of waste I saw in dorms and cafeterias. The environmental outrage was overpowered by entrepreneurial opportunity – if you could make products from waste you would have zero, or potentially negative, cost materials! 

To help source the bottles and drive positive PR and brand awareness for our first product – the one I dropped out of Princeton to sell – we launched a fundraising program called the Bottle Brigade, in which we paid schools and non-profits to collect used bottles. We quickly realized the almost endless opportunity in reclaiming and reusing non-recyclable materials, especially in light of the staggering amount of packaging waste created in our CPG driven economy.

How have you been able to merge commerce with sustainable business practices?

TerraCycle is a triple bottom line company. We measure and build our business and measure our success with three goals in mind: People, Planet, Profit. However, we have discovered along the way that these three ideals are NOT mutually exclusive. On the contrary, TerraCycle’s eco-capitalist model creates opportunities to be more profitable by being more sustainable. 

For example, packaging our fertilizer and cleaner lines in used soda bottles versus virgin or even recycled plastic bottles is far less expensive and has a far smaller carbon footprint. Making tote bags and backpacks from waste food wrappers or pre-consumer waste (unusable flexible film) again has a fraction of the cost or carbon emissions of a similar traditional product. It’s good for the environment, it’s good for our fiscal bottom line. 

Finally it allows TerraCycle to offer environmentally and socially responsible products without charging the typical premium of “green” items. This makes sustainable products available to a much wider population, regardless of economic class. Especially with the country mired in one of its worst recessions in history, if sustainable products can’t offer their benefits at the same cost as their traditional competitors, they will struggle achieve their potential (and very important) impact on our society and economy.

What are the benefits of upcycling?

The benefits of upcycling are tremendous in both economic and environmental ways. It allows TerraCycle to work with non-recyclable waste, helping to fill a very large need in our society as most packaging and other materials are non-recyclable. It is also more energy and cost effective than the traditional recycling process. Finally, I like to believe it helps engage and inspire younger generations to make a difference in our future and look at waste and business in a new way. Many of our upcycled products still have the look and feel of the source materials, right down to the brand, and kids seem so excited and intrigued when they see the finished products and immediately understand what we’ve done with anyone having to explain!

How does the theory of eco-capitalism factor into your business?

I am very intrigued by the concept that being more sustainable is an easy way to be more profitable. From the used packaging we upcycle to the used furniture and phones we use to the converted factory we call home in Trenton, NJ, we try to make sure that everything we do is good for both business and the environment. For too long, sustainably has been viewed as a cost instead of a potential asset. 

How is your business unique from other “green” operations?

Well, a few things. First, too many “green” companies shy away from growth and working and partnering with larger corporations or especially retailers. They seem to have a fetish for being small. Yet to make the biggest impact and reach the most people it makes the most sense to work with the world’s largest companies. Whether it is right or not a vast majority of Americans shop at big box retailers.

Second is the pricing. “Green” companies seem to want to charge more and play up green products as luxury items. I think that is very counter productive to the advancement of the sustainable model. I think the big win is for “green” to go “mainstream” and larger corporations will have no choice but to adapt to react to consumer demand.

What can retailers learn from your success?

I had my big break through thanks very much to The Home Depot and Walmart taking a big chance on my then completely unknown fertilizer. Without their willingness to test a risky product, TerraCycle would never be where it is today. Hopefully, retailers will start to take more chances on unknown or nontraditional products! I hope that the success of TerraCycle and other green products will encourage retailers to carry more and more responsible, sustainable products.


In upcoming issues, we will feature interviews with companies that are taking innovative steps toward the creation of sustainable products and services. If you are interested in telling us more about what your company is doing please contact Allison Bloom at allison@foodnutritionscience.com.