I was recently asked that question by someone at Office Max (as a quick background we just launched a major partnership between TerraCycle and Office Max this week). This is a tough question because one of the conventional methods of maintaining market share is to block competition and to construct numerous barriers to entry -- from IP to exclusive partnerships, etc. This is definitely the case in a mature and stable market where it is challenging to grow the market.

But is this the case in an emerging, niche market like green consumer goods? The best case study I can give is the launch of Clorox's green line. The household cleaning category is a large multi-billion dollar market in the U.S. The green household cleaning segment, however, is at best 3% to 5% of that. Probably less. Prior to Clorox's entry, the segment's leaders were companies like 7th Generation and Ecover. These green companies have strong distribution in places like Whole Foods but almost nonexistent distribution in places like Wal-Mart (actually Jeffrey Hollander, CEO of 7th Generation, writes on his blog that he will not sell to Wal-Mart).

When Clorox entered the green cleaning segment, all major retailers took a second look, and in the end the entire category experienced major growth. This allowed our cleaners to be launched at Office Max, tested at Target, and slated to be launched at a number of other major retailers. So, in other words, bring on the competition within the green segment. It may just be our ticket to truly turning the majority of consumer products green.

Take a simple paradigm: plastic bottles. The cheapest way to make a plastic bottle is to use 100 percent virgin plastic (the worst thing for the environment). If you want a "greener" bottle, you can integrate some recycled content, but with every extra gram of recycled plastic, you will be increasing the price of that bottle (and decreasing its strength). If you wanted to go "uber green," you might use biodegradable plastic -- like Ethos water, which is available at your local Starbucks. That move would result in the most expensive way to make a plastic bottle today.

Continue reading "Will Your Customers Pay to Go Green?"

Businesses across America are facing increased pressure to go green. To face this challenge, many companies are attempting to find some way to do something green. But what does this actually mean? Is it a good thing? Or does it dilute authentic green innovation? What constitutes "green-washing"? And is green-washing a bad thing? Here are some recent examples I've seen:

Elle magazine in its April green issue made a big deal that it was going green by using 10% recycled paper. What about the other 90%, or the fact that a large percentage of every magazine is thrown out and never sold (I wonder what the folks at INC magazine have to say about that)?

Starbucks stopped double-cupping. It now uses a sleeve made from 100% recycled content, and its cup is made with 10% recycled content. But its paper cup is still not recyclable, which means that billions of cups every year end up in our landfills.

Ford launched a "hybrid SUV" -- a title that almost seems oxymoronic.

Green is definitely a major trend that has captured the American consumer and is now being reflected in the products and services that are coming to market. I'm curious as to what you think. If Coca-Cola makes its bottles with .01% more recycled plastic content, should it call them the "new green bottle"? What if they're made with .1%, 1%, or 10%? Where do you draw the line?

When does a company have to qualify why their are calling themselves green? Is it a sin to greenwash one's brand -- or is any movement to a greener economy a good thing?

This is an ironic title since this blog is, in fact, a press hit that will
go into our ever growing press kit. That kit that has more than 1,000
articles in it from the past couple of years (check out:
http://www.terracycle.net/media_coverage.htm), which works out to more than one
article every day! So what's the trick? Well here are five simple tips:

Continue reading "The Secret Formula for Generating Crazy Amounts of PR."

We are used to thinking of waste as a physical thing. For example, and
most typically, what is thrown out in our garbage cans and ends up in
landfills. But what is waste? If we define waste as anything that we are
willing to pay to remove, then the idea of waste can be extended beyond the
physical objects that end up in our garbage can.

Take graffiti, we spend millions of tax dollars every year to remove it
From our walls, train cars, etc. It is seen as a huge negative. Just
type the word "graffiti" into Google News, and you'll see. However, graffiti can also be seen as a trendy art form. I know a number of people in New York City who
have paid big bucks to have a piece thrown up on one of their loft walls.

The economics behind this irony suggest that graffiti in the wrong place = a
big $$$ and social negative, but graffiti in the right place = a big
$$$ and social positive. The first step in discovering this was to talk
with the police in TerraCycle's hometown of Trenton, New Jersey, and see first hand the problems they have keeping the graf crews at bay. On the flip side, the graf crews hate
running from the Police. I had someone show me a monstrous scar on his
leg from pumping a barb wired fence. After seeing all of this, we opened up our
factory and told the graf crews that they can paint anything hey want -- except nudity and gang signs -- whenever they want.

Continue reading "The Happy Economics of Making Products from Waste"

The amazing thing about eco-capitalism is that you can create business
models where everyone truly wins: the environment, the consumer, the big business, the retailer and your business. In other words, all stakeholders (even the environment) can benefit. What's amazing about this kind of solution is that it creates the opposite of a death spiral -- a growth spiral. That is exactly what happened when we launched what we call "sponsored waste."

Let's take one step back. What is waste? The idea doesn't exist in the
natural world -- in other words it is completely man made. It is a
commodity that has negative value, a commodity that most people are willing to pay to get rid of. Or in other words a commodity that people are willing to pay you to take.

Even with a modestly advanced recycling system, most of what is produced in America is not recyclable. Examples range from yogurt containers, to drink pouches to energy bar wrappers to plastic bags, etc. This list is monstrous in size and scope. Within these waste streams, there are a subset that I would call "branded waste" -- that is, waste that has the manufacturers' logo all over it. Let's revisit the examples again with
brands involved: Stonyfield yogurt containers, Honest Tea and Capri Sun
drink pouches, Clif Bar energy bar wrappers, Target plastic bags.

None of these streams of sponsored waste is recyclable today, which means the only option is throwing them into a landfill. The numbers are staggering: more than 10 billion yogurt cups, more than 5 billion drink pouches, more than 20 billion energy bar wrappers, and well more than 100 billion plastic bags. And hese numbers are for the U.S. only!

Continue reading "A Solution for "Sponsored" Waste"

The concept of TerraCycle came up when my friends and I were trying to figure out how to grow "better tomatoes" in our basement and figured out that worm poop did the trick. The fascinating thing for me was that the worm poop itself was made from waste, a commodity that people are willing to pay you to take. Within six months of that serendipitous moment during my fall break (freshman year at Princeton) I left school to corner the market on worm poop. Inc. magazine wrote about us in 2002, giving our business plan a rating of 4 out 10. Little did anyone know that three years later we would be on the cover as The Coolest Little Startup in America.

Since then, our company has grown at Inc. 500 rates, and our products are now available at almost every major retailer in North America (from Wal-Mart to Whole Foods and everything in between). We've been sued by our biggest competitor and survived. We have succeeded in setting up our own factories and making our product in America, in the inner city (Trenton, New Jersey). We've raised more than $10 million without changing our culture.

What started as a company that made worm poop and packaged it in reused soda bottles has led to a paradigm of eco-capitalism that is much bigger than plant food. Today, we are a consumer products company that sells more than 50 products -- including garbage cans made from crushed computers, hand bags made from energy bar wrappers and juice pouches, and the most eco-friendly binders and pencils. All are available in major big-box retailers. If you average out the year, we are launching a national product every two weeks.

Our business plan is based on using stuff that people either don't value or, in many cases, give a negative value to. The result is a brand that has been called the most eco-friendly in America -- all while holding true to three simple brand principles: Better, Greener, and most importantly Cheaper.

Welcome to the Eco-Capitalist.