For Loop, a shopping service that sells items from Häagen-Dazs ice cream to Tide laundry detergent in reusable packages rather than the single-use containers that normally hold the products, consumer fears around reuse could pose an existential threat. But instead of retreating during the pandemic, the project has reported sudden increases in sales and is about to expand in a big way. Loop, which launched as a pilot last year in the Northeastern US and Paris, is planning to expand to the 48 contiguous states by July 1.
The broader launch has the potential to take Loop from a small experiment serving 10,000 customers to a much larger initiative — and it will test how committed Americans are to ditching single-use plastics. “What we’re not seeing is any consumers concerned about reuse in light of the virus, which is incredible,” said Tom Szaky, CEO of TerraCycle, a recycling company based in Trenton, New Jersey, and the driving force behind Loop. “I’m very, very happy about that.”
Here’s how it works:
Dozens of products are available through the service, ranging from shampoos and food made by popular brands to no-name staples like coffee and oats. As customers go through products — use all the shampoo, eat all the ice cream — they fill up the totes with the empty containers. Unlike traditional recyclables, customers don’t have to wash the packages. They just drop them back into the Loop tote, which a UPS driver picks up. The empties are shipped to an industrial cleaning facility in Pennsylvania before being refilled and sent out again. Customers can keep repeating the cycle or opt out and recover their deposits.
But people weren’t scared off by the service’s business model. In fact, Loop’s sales surged.
“March, April, May have all set records,” Szaky said.
He has a few ideas why. First, Loop benefited from the sudden shift to online grocery shopping during the pandemic.
“We definitely have seen a benefit for eComm because of Covid,” Szaky said.
That doesn’t mean it’s been smooth sailing for the project.
Like other essential businesses that have stayed open during the pandemic, Loop has had to deal with kinks in its supply chain. In some cases, unexpected demand for a certain product — like Clorox wipes — meant that Loop ran out of stock more quickly than anticipated.
“Cleaning products have surged like crazy,” Szaky said.
As it increases its inventory, the service may have to add more of the reusable packages that contain all Loop products. Before the pandemic, that meant some of Loop’s partner companies had to order more packages from a dedicated supplier. But the pandemic took some of those suppliers temporarily offline or slowed them down as workers stayed home or called in sick. To make sure that it was able to scale up, Loop encouraged its partners to broaden their supply chains so they didn’t have to rely on one packaging plant.
The pandemic is also slowing down the growth of Loop’s portfolio of products.
“There is some pressure on enabling new supply chain,” Szaky said. Some companies that recently committed to joining Loop are waiting until the pandemic passes to actually join the platform. “Many of those brands are telling us ‘we’re in, we’re signing, we’re going to do it, but we’re going to actually start the work after corona,'” he said.
Still, Szaky is confident that Loop will be able to meet the explosion in demand he’s anticipating. Of Loop’s initial 10,000 users in its pilot program, only about 100 people have abandoned the project, he said. Now, there are about 100,000 people on a wait-list. If the pattern holds and customers remain committed, Loop may have to increase its service ten-fold.
Of course, there’s no guarantee that everyone on Loop’s wait-list will join. But “we expect a pretty big jump,” Szaky said.
Szaky has a big vision for Loop: Eventually, he wants people to be able to do most of their shopping on the platform. And though Loop is an e-commerce venture at the moment, eventually people should be able to pick up Loop products and drop off empty containers in retail locations, too.
Lisa McTigue Pierce, executive editor of Packaging Digest, said she’ll consider Loop to have shifted the broader conversation around reusables when it inspires copycat products or services. That hasn’t happened in a significant way at this point. She’s also looking for mainstream distribution of Loop products.
So far, the trends that have made Loop popular right now aren’t unique to the project.
Why it’s working
Across the board, retailers are seeing growth in their digital channels.
The change has been especially dramatic when it comes to groceries. Before the pandemic, online grocery shopping lagged behind other kinds of shopping. But people avoiding crowded grocery stores and long lines have turned to online shopping as an alternative. About 20% of shoppers surveyed by the Food Marketing Institute this spring reported shopping for groceries online “for the first time in memory.”
FMI noted that in 2019, respondents said that they bought 10.5% of their groceries online weekly. In February this year, that figure jumped to 14.5%, and by March and April it had surged to 27.9%.
That interest in online shopping helped Loop, but still, there are broader fears around reusable products right now. And it’s unclear what that means for environmental movements moving forward.
The question, the report continued, is whether the attitude “marks a permanent shift, or whether sustainability performance could reemerge as a source of competitive advantage.”
Szaky, for one, is enthusiastic about his next steps.
“We’ve been preparing for this for a while so we’re very confident, he said. “All we’re doing is going a little faster… What we do expect is a little bit of strain, but the team is prepared and ready to rock and roll on it.”