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TerraCycle's Tom Szaky on Green Entrepreneurship

Since 2001, TerraCycle products have received a host of green awards for products ranging from plant fertilizer to school supplies to food packaging - all made using trash. In this interview with Green Business Innovators blogger Amie Vaccaro, CEO and founder Tom Szaky discusses how it all began, what has been most challenging, what he loves about his job, and his views on greenwashing.



Amie Vaccaro: How did you come up with this idea for TerraCycle while at Princeton?

Tom Szaky: My friends and I were trying to grow better pot and it turned out worm poop did the trick. It was also inspiring in that it was using garbage.

AV: What are some of your favorite products or projects?

TS: I love the Target plastic bag project. And we make world s first bag that is made entirely from recycled plastic bags. Over 40,000 people sent in bags through an ad we ran on the cover of Newsweek which doubled as an envelope and we requested people return it with their plastic bags. It was a win-win. A really fun product too. I really enjoy our TerraCycle juice pouch products using Capri Sun and Honest Tea packaging as well.

AV: What is your favorite part of your job?

TS: Creation of big partnerships. Seeing your creations on the shelves of Target, Home Depot etc. I was grocery shopping this weekend and picked up a Capri Sun [juice] and saw that my logo was on the side of the package. That gets me.

AV: What has been biggest surprise about the job?

TS: The realization of what you can do with waste. Fundamentally there is almost no waste that cannot be upcycled and no product that can t be made from upcycling. We can create a solution.

AV: What have been consumer reactions? Business reactions? Has it been hard to get retailers to carry your products? Hard to get consumers to buy your products?

TS: People are really into green products right now. So they are much more receptive. The education piece is critical. A lot of sponsors are really into that piece as well. Once people are educated they will do a huge amount of other things.

AV: Do you see Kraft or other partners making changes to their packaging based on your work together? (It seems to me a big piece of the answer is reducing packaging and rethinking it for easier re-use.)

TS: We can take it all. We work with world s biggest retailers and collect crazy volumes. We will collect 50 M drink pouches this year. Which is not enough. We don t see the issue of not being able to use the waste. They should use more reusable stuff. But people aren t great at recycling. Across the country we see low recycling rates. It is better to have lighter packaging that is not recyclable. At the end of the day the argument environmentally is to package juice in a pouch that s lighter than a bottle.

AV: Where do you see TerraCycle going? What sort of growth do you envision?

TS: We will keep doubling every year. At least. I think this is very manageable.

AV: What challenges have you come across?

TS: The volume of work is the hardest part of my job.

AV: How many employees do you have?

TS: Over 60 employees. Most of our work is outsourced with partners.

AV: Do you have any concerns about the process of changing plastic into a usable product regarding energy use, waste, toxicity?

TS: Upcycling never takes more energy than making something out of virgin materials.

AV: What about Recycline?

TS: Recycline - great line, they do recycling not upcycling and make new products.

AV: Has Terracycle been profitable?

TS: TerraCycle had revenues of $70,000, up to $0.5M in 2005, $1.5M in 2006, $3.3M in 2007 and projected sales of $7.5M in 2008. Most of our money is invested in growth. It is definitely profitable. We are backed by a venture fund.

AV: When collecting trash for your products, who do you work with?

TS: Sometimes we work with recycling and disposal companies, but we typically create our own models to collect trash.

AV: Discuss some of your partner relationships - how did they come about, any concerns on your side about being used to help greenwash a large company?

TS: They are absolutely trying to greenwash. Like when you claim something is 96% natural, when it s just water, or claiming that packaging is recyclable, which all of it is. That is greenwashing. Or BP ads, about kids swimming near oil rigs with dolphins. But the Kraft thing is a serious step. If that is perceived as greenwashing, then everything is. What these companies are doing should be encouraged.

AV: What are your current projects?

TS: Exciting launch of trim and packaging line made out of garbage. Like bows, gift wrap.

AV: How do you come up with ideas?

TS: We have a design team that comes up with ideas. We also work with stores to think about what products they want.

AV: Any other interesting stories like the pot growing one?

TS: We packaged the worm poop used soda bottles, which crystallized the made and packaged with waste idea. We used soda bottles because we had no money. This was the central lever behind one of our biggest innovations. We realized that this was actually the best way to do it. I was not a big environmentalist, I just wanted to use waste as an economic driver.

AV: Are there other companies in this field I should be aware of?

TS: We are the leaders. No one has quite the scale we do.

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This article has been reprinted courtesy of Green Business Innovators, a website dedicated to helping green businesses be more successful.

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