WOW Woolworths Group Limited

By Katie Deighton 

Tom Szaky, the chief executive and founder of TerraCycle, imagines a world where shoppers take their trash with them to the grocery store.

In his vision, people purchase products like ice cream and deodorant in reusable containers. At the cashier, they pay an additional cost: a refundable packaging deposit. They return empty containers to the store, which collects them for cleaning and reuse.

The consumer gets each deposit back and buys another tub of ice cream or stick of deodorant from the shelf. The cycle starts again.

Soon Mr. Szaky is going to find out if his idea can work in the real world.

Retailers including Kroger Co. next year plan to make space in stores for Loop, TerraCycle's refillable packaging platform. Tesco PLC in the U.K. and Carrefour SA in France also are planning to install in-store Loop "corners" -- areas of a store designed for products packaged in Loop's containers -- in the next 12 months. Loblaws Inc. in Canada and Woolworths Group Ltd. in Australia will bring Loop stations to stores sometime in 2022, a Loop representative said.

Aeon Co., Japan's largest supermarket group, plans to introduce Loop corners to 16 stores in the greater Tokyo area next March.

"We want people to come in and fall in love with these really cute, beautiful packages, understand the message and get excited about it," said Satoshi Morikiyo, general manager of convenience goods at Aeon. "Shopping trips are not necessarily something people look forward to, but this is a cool experience that offers something of a discovery -- something new and fun."

TerraCycle, founded by Mr. Szaky in 2001, offers companies services such as programs for hard-to-recycle waste that would otherwise end up in landfill sites.

TerraCycle introduced Loop in May 2019. The division provides brands from consumer packaged goods giants like Procter & Gamble Co. -- also an investor in Loop -- with durable packaging designed for reuse rather than recycling. Other investors include Suez, Aptar and Sky Ocean Ventures.

Household products like Häagen-Dazs ice cream and Seventh Generation detergent, for example, are sold in stainless steel tins designed by Loop to be returned, cleaned and sold again in a "milkman" style system. The refundable packaging deposit customers pay ranges from $1 to $10, depending on the container's size and material.

The company has developed reusable packaging for 400 products, but so far sold them only through the internet to consumers in parts of the U.S., France and the U.K.

As retailers prepare to bring Loop into stores, executives are trying to craft a shopping experience around the products rather than simply stacking them on shelves.

Some chains are moving cautiously. Walgreens Boots Alliance Inc. has been working with Loop on an e-commerce pilot in 15 states and Washington, D.C., since May 2019. It is still monitoring results and gathering feedback, according to Lauren Brindley, group vice president for beauty and personal care at Walgreens. It hasn't set a date for an in-store launch.

"We have to really consider how we make sure customers understand from the beginning what they're purchasing, and how they basically get the deposit back for the product," Ms. Brindley said.

Kroger, another of Loop's founding partners in the U.S., is on track to test a Loop retail experience in a handful of stores in the first quarter of 2021, according to Lisa Zwack, the company's head of sustainability.

The chain is designing a retail experience that is easy to find in store and compels customers to reach out and touch the products, Ms. Zwack said.

In Aeon's first Tokyo stores to introduce the program, a Loop employee will stand at each station to explain the system and field customer questions, Mr. Morikiyo said.

Products will appear on Loop-branded shelving, with packaging that Aeon deems particularly attractive highlighted on pedestals.

"The Japanese customer loves packaging and really pride themselves on beauty, innovation and design," Aeon's Mr. Morikiyo said. "We're envisioning people taking selfies or photos in the Loop corner."

To collect used containers in stores, Loop has developed two types of receptacle: the "smart" bin, which can scan empty containers and refund deposits right away, and the analog "passive" bin, which sends refunds to customers' bank accounts once their deposit has made it to a central Loop cleaning center.

Loop also has deals in place to put stations in a number of smaller locations, such as the boutiques of a cosmetics brand and outlets of a British fast-food chain, Mr. Szaky said. The long-term plan calls for customers to be able to buy Loop products at one store and return the empty packages at another, he said.

Loop will work closely with each retailer on the store experience in the beginning, but plans to give stores more flexibility as its outposts spread, Mr. Szaky said.

"Our goal is to eventually allow these brands and retailers to play in the platform however they want," he said. "But until it's really working perfectly, we want to be involved in sharing knowledge between retailers."

Write to Katie Deighton at katie.deighton@wsj.com

(END) Dow Jones Newswires

August 17, 2020 16:57 ET (20:57 GMT)

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