TerraCycle: How To Brand Waste – Tom Szaky, CEO and Co-Founder explains

Tom Szaky, CEO and co-founder of TerraCycle

Tom Szaky tells us that him and fellow student Jon Beyer scratched together a few thousand dollars from friends, family and from winning some business plan competitions to buy a continuous-flow composting system from its inventor in 2002.  The idea was to use worms to process the organic waste from the dining halls at their university – Princeton – and beyond into fertilizer.  They called the company TerraCycle and Tom sketched what he described to us as “a stylized worm eating itself” to serve as a logo. Not having the funds for materials and a packaging line, they re-labeled and re-filled empty soda plastic bottles to sell their ‘Waste-to-Waste’ liquid fertilizer in supermarkets.

Soon they were in the news for paying schools for organizing ‘Bottle Brigades’ to collect the PET trash, for fighting with Scotts Miracle-Gro Company over claims and artwork but also for not only gaining permission by Coca Cola, Pepsico and others to officially use their bottles but actually being asked by them to help organize more ways to recycle the packaging trash they caused. This way of earning media attention and generating industry demand is prototypical of how Tom and TerraCycle generate awareness and adherence to this day. This is how you might have heard about the ‘Drink Pouch Brigades’, seen pencil cases, totes or back-packs made of Capri Sun pouches or Chip Ahoi bags with Tom pictured as their designer wearing a blazer made of Doritos bags. Or maybe you played ‘Trash Tycoon’ on Facebook’ or saw ‘Garbage Moguls’ on the National Geographics channel?  You might see a pattern not only in how the TerraCycle brand attracts attention but also creates a brand myth.

And companies certainly started to pay attention. Packaged goods manufacturers like Kraft and Stony Field Farms and retailers including Walgreens and Target were eager to connect and offload millions of bailed juice pouches to Terra Cycle.  Somewhere along the way – ca. 2007 – Jon left to join a private equity firm and Tom made a pivot to focus the company on up-cycling and re-cycling the seemingly unstoppable avalanche of waste our throw-away society generates rather than the ‘Worm Poop’.  He also chose to no longer own the operations and associated capital but rather own the material- and data flows, the intellectual property associated with them and the hands-on promotion of the platform.

TerraCycle Global HQ in Trenton, NJ

Since then Terra Cycle has been very visible at the forefront of developing platforms to collect and recycle all kinds of consumption waste.  One example is cigarette butts.  Humans throw away some 5 trillion of them a year (and estimated 1.7 billion pounds).  Butts do not bio-degrade but rather leach out toxic chemicals – just one can contaminate over 7 liters of water enough to kill aquatic life in it – and decompose over a 2-10 year period into plastic micro-trash that slowly finds its way into wildlife…. and our food and water stream.  Terra Cycle reportedly spent six months developing a separation process that allows the butts to be recycled into compost (paper and tobacco) and plastic products like benches or shipping pallets.  Other examples: Collecting and up-cycling US Old Postal Service bags, converting used milk jars to flower pots, or fishing plastic from the oceans and recycling them into shampoo bottles are a few more of a growing list of projects Terra Cycle has kicked off around the world.

Tom has preserved a controlling stake in the company which is said to generate about $10-20 million in revenue, a low single digit profit margin but a high double digit growth rate.  The company points out that it is barely scratching the surface of the total market opportunity (TerraCycle is estimated to process far less than 5% of the potential waste material stock it targets in the US).
He certainly is a master marketer. However Tom’s greatest skill – and the requirement to grow the business to a size that makes a dent (in many respects) – might be in bringing together industry partners like Procter & Gamble or Unilever on the sourcing side and worm farmers or Suez Environment on the treatment side to create a market for his ideas and actually make things operationally happen – at scale.

Head and Shoulders advertises its TerraCycle ocean plastic bottle

The occasional critic – and there seem surprisingly few – say that rather than help prevent waste in the first place, TerraCycle absolves manufactures, retailers and consumers alike of their waste sins in exchange for buying the TerraCycle seal for their packaging or throwing their trash into one of the collection boxes the company sells.  They argue that the company’s mission of “Eliminating the Idea of Waste” is too focused on collecting money and a tiny fraction of our garbage in exchange for removing the inconvenient “idea that we are being wasteful.”

In our interview, Tom agrees that “recycling only addresses the symptoms but not the root cause” … and goes on to talk about a latest project he just announced at the World Economic Forum and which might just get at that root of the problem: TerraCycle launched ‘Loop’ a program of re-fillable product containers that are delivered to households, ‘milkman-style’ …

In the interview, we also talk about:

  • Why the legends spun around him and his mission are “critical to get attention and  excitement” – not only by the press.
  • How TerraCycle’s “job is to keep packaged good producers wanting to beat each other”.
  • Who the various TerraCycle target segments and ‘Ueber-Target’ are.
  • How you have to “distinguish between the steak and the sizzle” when it comes to promoting the brand and recruiting people into the industry.
  • and much more

And now, click (below) and enjoy the interview: 

New Zealand kid yogurt brand ‘suckies‘ promotes TerraCycling collection of its pouches

FURTHER READING:

For more insights into what drives the success of purpose-driven brands like TerraCycle read our book “Rethinking Prestige Branding – Secrets of the Ueberbrands,” and other posts on this blog-cast.

If you want us to help you elevate your own brand, then write to us at info@ueberbrands.com.

Here is a link to the TerraCycle and Loop Store websites and some of those accounts of the Garbage Mogul and the ‘garbage as hero’, butts for cash and similar stories that help create attention and add some myth to the material (or rather trash). And here is an early video in which Tom deploys his marketing mastery, explaining to us how worm poop and the re-use of PET bottles starts to ‘eliminate the idea of waste’.

As always, we also want to provide some critical third party perspective.  This was harder than expected.  But here is a critical assessment by The Guardian that also talks about TerraCycle (scroll down towards the middle of the article).

Finally, here is a detailed review of what is known about the Loop program, as of print.

 

 

About JP Kuehlwein

JP Kuehlwein is Co-Founder and Partner at ‘Ueber-Brands’ a New York consulting firm that helps elevate brands in the minds of people and above competition to warrant premium pricing and profits. He previously was Executive Vice President at Frédéric Fekkai & Co, a prestige salon operator and hair care brand and worked at multinational Procter & Gamble as Brand Director and Director of Strategy. JP is a recognized global business leader and brand builder with a 25+ year track record of translating consumer and brand insights into transformational propositions that win in market. His experience spans from developing a global communication strategy for the world’s leading detergent to introducing a new-to-the-world food wrap, disposable diapers as a category in India and a premium skin care brand in China to turning around a luxury lifestyle brand in the US. JP’s latest book is the bestselling “Rethinking Prestige Branding – Secrets of the Ueber-Brands” which he co-authored with Wolfgang Schaefer.
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