What Happened To TerraCycle's Loop and Where Are They Today?

TerraCycle’s Loop refillable program launched with plenty of interest, and for good reason.

For large, Fast-Moving Consumer Goods (FMCG) manufacturers like Nestlé, Loop provides a way to lower their use of single-use packaging and offer consumers everyday items and favorites that don’t contribute to the plastic pollution crisis. Plus, Loop provides a refill option with national brands, addressing the increased demand for zero-waste products.

For many consumers alarmed about plastic waste, this felt like the Holy Grail. Order some of your favorite products, whether it's orange juice or shampoo, and when you're all done, ship the container back to Terracyle for cleaning so it gets reused again, and they replace it with a new one—a perfect loop, if you will.

After launching as an online delivery and pick-up service, Loop announced a succession of retail partnerships, making it easier for consumers to access and use the refillable resource. In 2019, Loop launched in-stores with grocers like Kroger in the US, Tesco in the UK, Carrefour in France, and Loblaws in Canada. Giant Foods, an east coast grocer also joined Kroger as a retail partner with Loop, as did Walgreens.

Since then, Kroger, Tesco, Loblaws, and Giant have ended their Loop collaborations. Loop has since partnered with Walmart in the US, the Japan-based Aeon, and wholesaler Metro in France. Regardless, interest in Loop’s promise of waste-free products remains, but as some retailers ended their Loop programs, why didn't others expand?

Timing, of course, may have played a role. As Loop retailer programs started rolling out, COVID-19 wasn’t far behind. Many pilots ran through the thick of the pandemic between 2020 and 2022. Gaining much insight into the resulting global supply chain disruption would be difficult, but the retail landscape was upended overnight, and consumers and businesses were prioritizing managing the spread of COVID instead of zero-waste innovation.

Earlier this year, Clem Schmid, general manager of Loop, described to Waste Dive the transition from a standalone service to retail partnerships as its “next stage.” According to Schmid, it is time for retailers to take ownership of product distribution thanks to Loop's development of reverse supply chains.

Schmid might not be wrong. Despite significant venture capital and multinational brands at launch, Loop was only available in some metropolitan regions along the west coast. Even with brands like Unilever and Coca-Cola, overall product selection was a fraction of what they offer in single-use packaging. The products were more expensive, with no selection of lower-cost alternatives like private label brands. Loop’s standalone service also required customers to hold onto the empties and a large shipping tote—all of which take up space, not to mention the deposit fees on packaging (which you got back if you stopped using one of the products).

Moving away from the standalone to retail partners, especially those with the distribution expertise of Walmart and Carrefour, appears to have saved the Loop experiment for the time being. The service is now easier; customers now shop for Loop-packaged goods from a store that can offer a complete shopping trip. Depending on the retail partner, Loop customers can buy Loop products and return empties at physical stores.

Limited availability, selection, and price premium still all exist, but being able to shop for Loop and non-Loop groceries from a retailer the consumer already has a relationship with can help mitigate those issues until the service can scale successfully or continue raising enough venture capital from the Davos crowd.

It was a move that made tremendous sense. If you have a retail partner that's a grocery store, you've created a centralized hub where consumers can pick up and drop off their reusables. Still, with many of those pilots, they couldn't get consumers to latch on to the service.

Tesco and Kroger made public some insights they learned from the Loop partnership in related ESG reports. Both grocery chains had slightly different conclusions but were overall positive, seeing potential in the reuse concept with some refinement.

Kroger chose 25 Fred Meyer stores in the Portland area and started its Loop pilot in February 2022, ending it in the fall. Overall, three-quarters of shoppers understood the deposit system, and 60% recognized that reuse is better than recycling for the environment. However, only one-fifth of consumers tried Loop, with 25% saying they planned to try it in the future.

Based on the Meyer pilot, Kroger notes that an expanded selection of brands and tie-ins to loyalty programs could potentially increase adoption. Kroger also suggests prominently placing messaging about reusability on pack and highly differentiating reusable packaging against single-use alternatives with new label designs, different materials, and shapes.

UK-based Tesco ran an online order and home delivery Loop pilot between July 2020 to June 2021, starting a ten-store pilot from September 2021 to June 2022. Based on its customer surveys, Tesco learned that the top motivators listed for buying reusable products were a desire to do their part for the environment and to reduce single-use plastic, each cited by half of the respondents.

Other lessons learned cited by Tesco include reducing costs through shared cleaning, distribution, and refilling across different retail food and service businesses to reduce costs and scale up production. Tesco also notes that having in-store pre-fill ambassadors played a critical role in customer adoption. They saw an opportunity for a refill program that, if rolled out across 400 locations, could potentially save millions of pieces of single-use plastic.

The general public has seen their fair share of plastic waste in the news. Bans on single-use plastic items such as plastic bags and drinking straws have impacted all consumers and sparked some backlash. Still, according to a survey by the non-profit Oceana, 8 in 10 American voters support national action to reduce single-use plastic. Seemingly, most consumers are at least willing to vote on less plastic. While they might want to see less of the stuff, that doesn't necessarily translate into action or making better environmental choices. Given the limited availability and rollout of Loop, few consumers will probably have heard of the concept. But, if you have a few in-store ambassadors, you can connect Loop with the desire to consume less plastic and educate them on the benefits of refill.

Cost played a factor in Loop's initial launch, but prices are now starting to at least line up a bit more with their plastic counterparts. In the current Walmart pilot, a 14-ounce bottle of Heinz ketchup lists online at $4.98, with a dollar returnable deposit included. The closest single-use bottle of Heinz is 20 ounces and listed at $3.48. Loop customers pay 10.6 cents more per ounce of ketchup, only available through Walmart’s W+ InHome program, have to return the packaging, and only get to pick one flavor.

Regardless, Loop's mission is an ambitious one.TerraCycle has approached the task from different angles, working with large FMCG brands, offering a direct service, and now through retail stores. Though some partners have ended their Loop pilots, interest remains strong among large grocers like Walmart and Carrefour, though the programs remain limited to a few stores and regions.

Consumer interest and widespread adoption could spell increased investments in the necessary networks and infrastructure to produce, distribute, collect, and refill at a more competitive price to single-use packaged goods. Legislation can also act as an accelerator for refill programs like Loop. Some lawmakers have clarified that reuse is on the table, like the French. EPR targets on plastic can also pressure FMCG manufacturers to broaden their refillable options and distribution. However, until there's mass adoption of these laws and brands are held accountable for the waste they put into the world, it's much more difficult for services like Loop to catch on.

On the positive side, as more brands and retailers experiment and offer refillable products from services like Loop, there is a better understanding of how to make these zero-waste programs viable at scale. One can only hope that more consumers will seek out a new alternative.

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Images courtesy of TerraCycle.