Processors looking for an example of the next generation of eco-entrepreneurs seeking inroads into the plastics industry would do well to take note of a small business based in a former New York Times distribution center in Trenton.
From its 2001 startup as the brainchild of two Princeton University students interested in growing better marijuana through home composting, TerraCycle Inc. — which markets an array of consumer products made from recycled (``up-cycled,'' in TerraSpeak) materials — has grown its sales to a projected $10 million in 2008. It employs about 60 in Trenton, Toronto, Atlanta and Stockton, Calif.
The Trenton headquarters is covered with graffiti painted by local teens and commissioned by TerraCycle. The staff — about half collegiate types in their 20s, the rest a mix of 40- and 50-somethings — juggle sales calls, try out new marketing pitches and take part in product development brainstorming sessions. They're frequently interrupted by reporters with national and local news media who in the past three years have fallen in love with the company's eco/urban vibe.
When Plastics News visited TerraCycle's head office Oct. 22, contractors were heaving new ductwork into place for an aged heating system. Meanwhile, Tom Szaky, the 26-year-old Hungarian-born Canadian founder and chief executive officer, bobbed and weaved from desk to desk. He was checking sales pitches, meeting with a National Geographic Channel television crew to hammer out a shooting schedule for an upcoming reality TV show on the company, and frantically trying to resolve a scheduling software problem with his IT manager — so he could send himself a text message about an upcoming speaking engagement.
TerraCycle's rapidly growing stable of plastics-based products includes totes made from reclaimed items such as shopping bags, and shower curtains fashioned out of scrap film originally destined for cookie bag wrappers. The company's goods are sold at Home Depot, Wal-Mart, Office Max and Walgreens stores, among others. Big sellers recently have been school backpacks and pencil cases made from plastic-foil laminate Capri Sun drink pouches. Another back-to-school product in development involves plastic yogurt cups from Stonyfield Farm that will be repackaged as crayon tubs, complete with crayons.
``A year ago, ago, we didn't have any of these programs. Drink pouches, flexible packaging, yogurt cups — we weren't doing any of those at all. We really created the programs for the sponsors,'' said public relations director Albe Zakes.
TerraCycle's business model relies on food producers like Kraft Foods Inc. and retailers like Target Corp., which have provided locations and funding for some of firm's 19,000 waste collection points, where local schools and nonprofits can trade plastics for pennies. And it also relies on OEMs' industrial castaways.
``We'll run these [collection] programs and they're incredible PR; we'll get good coverage in local papers and national media and it gives [brand owners] a really good corporate social responsibility piece to take to their consumers,'' Zakes said.
``There's an incredible amount of post-industrial waste — your misprints, your end runs, your kickoffs. We now take all of those as well, so we're reducing the [environmental] footprint for these companies in the public eye and on the back end as well.''
In January, TerraCycle will add Frito-Lay North America and Johnson & Johnson to its list of partners.
``With Johnson & Johnson, one of the things we're looking at is a material we've never considered before: face tubes — face wash and body wash and shampoo. As those come in, we're trying to find ways to manipulate them,'' Zakes said.
``When we work with these big parents, they'll send us their packaging. They'll send us a pallet or two of all the packaging that they have out there and we'll come back two weeks later with mocked-up products.''
That's about how quickly TerraCycle, Target and Newsweek worked to get a special Earth Day promotion together last spring. The magazine's April 14 issue, which hit newsstands April 7, had a special cover that could be folded into an envelope, packed with a used red-and-white Target polyethylene shopping bag and mailed free of charge to TerraCycle's local post office. The company took the resulting 125,000 bags, heat-fused them together, sewed the seams with batting and attached cloth handles and shipped them to Target stores, where they are sold as Retotes.
``Target challenged us to come up with a solution to the plastic bags, which we did. Today we've diverted something like 5 million plastic bags to be made into this product,'' Szaky said during an Oct. 28 telephone interview.
TerraCycle has seven different streams of materials recovery through its programs, known as brigades. ``In the drink pouch program, this year we collected half a million drink pouches from consumers and we collected 50 million from the factories. We've saved 50 million wrappers just on cookie bags,'' Szaky said.
The fuse-and-sew operation has grown beyond the United States; TerraCycle now subcontracts much of the work to factories in Mexico. Durable-goods recycler MBA Polymers Inc. of Richmond, Calif., is TerraCycle's injection molding contact: It supplies flower pots made from a mixture of plastics found in discarded electronic equipment and 28-quart garbage and recycling cans molded out of recycled polypropylene.
In an Oct. 27 e-mail, MBA Polymers spokesman Darren Arola said his company co-owns tooling and subcontracts the injection molding.
``As the project grows, we'd work with molders closer to both our plants and where the materials are marketed. Post-consumer plastic, let alone mixed plastic, is not what many production managers get excited about running in their shop. However, we think that stereotype is changing as post-consumer and green marketing has become prevalent,'' Arola said.
As it has since Day One, TerraCycle uses recycled PET and milk jugs for its signature product — liquefied worm excrement fertilizer — as well as its organic deer repellent, potting mix and a line of earth-friendly cleaners.
Szaky's take on the need for corporate responsibility — as opposed to more consumer education — in boosting recycling rates likely won't win him many friends among established companies, particularly in the United States.
``Canada has the equivalent of a bottle bill for drink pouches in half the provinces. I think charging a tax on all the packaging companies on the end-of-life of the product is prudent. I would wholeheartedly support that,'' he said. ``In a way, what [partner] companies are doing is paying [TerraCycle] to perform that function. If suddenly there was a 3 or 4 cent tax on every packaging form where there wasn't recycling, we would see some fantastic innovation pretty fast.''
He's sensitive to criticism that TerraCycle's products lack the virgin quality of some of their counterparts in the marketplace. ``We have a strong belief … that we will only produce products that are greener, better and not expensive. We do not believe in premium pricing eco-friendly goods and I believe that especially resonates with consumers in a down economy,'' Szaky said.
The green movement has been, to put it mildly, good for TerraCycle's bottom line and the company markets pens made with Mater-Bi, a corn-based bioresin from Novamont SpA of Novara, Italy. But Szaky isn't sold on bioplastics such as PLA as the best solution to environmental concerns.
``I have a big problem with bioplastics. Bioplastics are not the solution at the end for a couple of reasons. One, there is no infrastructure to take it and hardly anyone composts at home ... nothing biodegrades in a landfill. So if you throw bioplastics into a garbage can, it won't biodegrade at all; it'll still be a plastic bottle years and years later. The other problem is that there's not enough corn in America to sustain it. That's why you'll never get America on biodiesel,'' he said.
TerraCycle's future plans include gathering more partners and expanding the number of up-cycling locations. Zakes has a more succinct way of putting the corporate philosophy:
``We want to turn TerraCycle into one of those nouns, like Google. You don't search for something [on the World Wide Web], you google it. You won't recycle something; you'll terracycle it.''