TerraCycle

Not to be confused with TerraCycle (recumbent cycling).
TerraCycle
Privately held company
Industry Waste management
Founded 2001[1]
Founder
Headquarters 121 New York Avenue, Trenton, New Jersey, U.S.
Number of locations
 26 countries
Key people
  • Tom Szaky (CEO)[1]
  • Robin Tator (President of TerraCycle Canada)[1]
Products Goods made from recycled products
Services Recycling
Website terracycle.com

TerraCycle is a private U.S. small business headquartered in Trenton, New Jersey. It makes consumer products from pre-consumer and post-consumer waste ("upcycling") and by reusing other waste materials. The company is known for its environmentally-friendly aspects.

History

2001–03: Founding and investments

TerraCycle was founded by Tom Szaky and Jon Beyer in the fall of 2001.[2][3] In 2002, the company a bought a $20,000 continuous flow composting system invented by Harry Windle of Gainesville, Florida, to take organic waste and have it processed by worms into fertilizer.[4][5][3] The first waste used came from the dining halls of Princeton University.[3][6]

Initial funding came from family and friends of Tom Szaky and Jon Beyer as well as awards from business plan contests.[3][7] TerraCycle received media attention when it turned down a one million dollar venture investment opportunity awarded through the Carrot Capital Business Plan because the investors planned to change TerraCycle's business model.[3][7] Further funding came from private investors.[3][7] The first investor was Suman Sinha, who gave $2,000 in exchange for 1% of the company stock.[8][3]

2004–06: Vermicompost

TerraCycle plant food.

Instead of pure fertilizer, TerraCycle sold its products in liquid form.[6] The company made this decision upon concluding that liquid fertilizer could have better consumer reception as well as production advantages.[9] The original purpose for packing its liquid fertilizer in used plastic bottles was because the company could not afford new ones.[10][11] Later, the company continued this process and marketed their gardening products as "Waste in Waste".[10][12] Schools and local organizations collected bottles for TerraCycle in exchange for proceeds in what became known as the "Bottle Brigade".[3][13]

Maintaining intellectual property rights, The Coca-Cola Company gave TerraCycle a license to use its bottles in TerraCycle products.[14][15] PepsiCo also gave TerraCycle a license to use its distinctively shaped bottles.[16]

In 2004–5, Home Depot Canada and Wal-Mart Canada began carrying TerraCycle products.[3][17] Other companies followed. During its growth, the company bought an abandoned mansion to house its interns and a warehouse for its fertilizer production and offices.[6]

2007: Scotts Miracle-Gro lawsuit

The Scotts Miracle-Gro Company sued TerraCycle in 2007, claiming false advertising and trade dress violations.[13][18] In response, TerraCycle started a media campaign known as "suedbyscotts.com".[19][20] Scotts claimed that TerraCycle's choice of colors was too similar to its own products.[21] Scotts eventually dropped the case upon an agreement with TerraCycle to alter TerraCycle's product packaging.[19] TerraCycle agreed to recolor its packaging to orange and green as well as remove pictures of fruits and vegetables on its labels.[22] Issues over product comparison claims on TerraCycle's packaging were also resolved.[22] In the settlement, Scotts required TerraCycle to host a copy of the agreement on suedbyscotts.com.[22]

2007–present: Sponsored waste

In 2007, TerraCycle developed waste solutions and Brigade collection programs for Honest Tea, Stonyfield Farm, and Kraft Foods.[2] Seth Goldman, founder and CEO of Honest Tea, asked Szaky for a waste solution to its Honest Kids brand.[10][23] As Tom Szaky himself designed sample products for the aluminum-plastic pouches, including pencil pouches and tote bags, Goldman agreed to sponsor the Drink Pouch Brigade.[10][23] Upon deals with Safeway, Target, and Walgreens to buy the products, TerraCycle acquired approximately 20 million baled juice pouches stored by Encorp in British Columbia, Canada, which contained many Capri-Sun pouches.[10][17][24] Because of intellectual property and trademark rights, TerraCycle sought out permission from Kraft to use Capri-Sun brand pouches in its products.[10][25] They obtained additional sponsorship for the Drink Pouch Brigade as well.[10][25] Programs for other Kraft brands such as Oreo and Chips Ahoy soon followed.[10][25] The same year, co-founder Jon Beyer left TerraCycle to work at another company.[26]

In 2008, TerraCycle partnered with Target to sell recycled Target plastic shopping bags fused together as reusable bags named "reTotes".[10] At the end of the year, TerraCycle lost $4.5 million.[23] As a result, the company changed it manufacturing processes to use pre-consumer extra and misprinted packaging labels from other companies in its upcycled products.[23][27] TerraCycle changed to use the majority of its collected post-consumer waste for recycling into plastic molding pellets.[23] Around 2008, it ended its Bottle Brigade program.[28]

As the Brigades grew, other companies partnered with TerraCycle to create similar waste collection models. For example, wine companies supported the collection of old wine corks and wine barrels.[29]

By 2009, TerraCycle moved away from manufacturing to licensing all of its products.[23][30] As of the same year, it outsourced its vermicompost production to worm farmers in North Carolina.[31] From 2012, TerraCycle and various tobacco companies partnered to launch a widespread collection and recycling system for cigarette butts.[32] The cigarette butt filters, generally made from cellulose acetate, are refined into pellets that are then used in the production of plastic items such as shipping pallets, benches, and ashtrays.[33] The company promises that the recycled plastic from cigarette filters will only be used in industrial products and not in household plastics due to its exposure to nicotine.[33] The recycled cellulose acetate is mixed with other recycled plastics to create usable industrial products.[33] Tobacco and paper are composted in this program.[32][34] It took six months for the development of the cigarette butt recycling solution.[33]

On January 29, 2014, Progressive Waste Solutions announced a 19.99% interest acquisition in TerraCycle Canada to cooperate on recycling initiatives in Canada.[35]

Products and services

TerraCycle has created approximately 200 products, all of which are licensed to manufacturers instead of made by TerraCycle itself.[23]

Plant food

TerraCycle began with the production of fertilizer made from vermicompost, which is made by feeding organic waste to worms. The worms' excrement is then liquefied into "compost tea" by mixing it with air and warm water in large vats.[36] It packages the material in reused plastic water bottles.[3][13] The spray bottle tops are rejects from other companies.[3][7] Residue left over from the vats is used in potting soil and seed starter products.[36][37]

"Upcycled" products

A TerraCycle backpack made from Capri Sun juice pouches.

The company diversified its production into upcycling around 2007 and began creating products from other waste items.[2] For example, it makes pencil cases and backpacks made from used drink pouches.[31] Various products from pre-consumer waste and post-consumer waste include messenger bags, binders, notebooks, and tote bags.[31][28]

Recycled products

Plastic packaging waste that is not upcycled is recycled into plastic products including flower pots, plastic lumber, plastic pavers, bike racks, park benches, and garbage and recycling cans.[38][39]

"Brigade" programs

TerraCycle's "Brigade" programs enable individuals or groups to collect specified waste materials in exchange for donations to a selected cause or school.[2][25] Users sign up over the Internet,[25] and shipping and donation costs are generally covered by a sponsoring company related to the specified Brigade.[23][31] The waste materials, typically non-recyclable, are either refurbished, upcycled, or recycled.[40][41]

Corporate identity

Logo

According to Tom Szaky, the name TerraCycle "came up at the beginning [as] the idea of 'earth' and 'cycle'."[11] Szaky thought up the name with another Princeton University student during a road trip from New Jersey to Florida.[42] The TerraCycle company logo is a green infinity symbol with two arrows pointed toward one another. Szaky designed the logo during the middle of a lecture at Princeton.[30]

Television show

TerraCycle was the subject of a National Geographic reality television series named Garbage Moguls.[43] The pilot premiered on Earth Day, April 22, 2009.[10] The show featured the TerraCycle team searching for solutions to various waste streams.[10][31]

Web game

See also: Trash Tycoon

TerraCycle partnered with game developer Guerillapps to make a Facebook-based flash game known as Trash Tycoon.[44] The game was launched in 2011,[12] and it mimics TerraCycle's actual business model.[44] Major sponsors for the game include Carbonfund.org and Treehugger.com.[44] Revenue is generated through the inclusion of brand logos within the game and the use of virtual currency.[45] TerraCycle receives 25% of the advertising revenue but none of the virtual currency revenue.[46] The game donates 10% of its revenues to Carbonfund.org.[44]

In the game, players take on the roles of recycling entrepreneurs who perform actions such as upcycling and composting.[44] Avatars collect litter from the streets, completing missions to earn points.[47][48] The game features synchronized multiplayer play.[44]

Corporate affairs

The front of TerraCycle's headquarters.
An inside view of the TerraCycle office in Trenton, New Jersey.

Headquarters

TerraCycle's main headquarters are located in Trenton, New Jersey. The office was originally a 20,000 square foot abandoned warehouse for a newspaper distribution facility.[49][21] The headquarters were bought by TerraCycle in the summer of 2004.[50] Its renovations were designed by Tiffany Threadgould, an employee,[43] and its walls are painted annually by local graffiti artists at "Graffiti Jams".[3][23][25]

Corporate culture

According to Szaky, TerraCycle's culture is "fairly relaxed" in an attempt to "foster a social atmosphere where everyone can enjoy themselves" because he believes that "people do their best work when they are comfortable and relaxed".[14] Furthermore, the company has a lenient dress code.[14] Colorful walls, artistically-minded furniture, and activities supposedly bring about employees' creativity.[14] Every TerraCycle employee writes a weekly status report that is compiled into a company-wide biweekly report to improve internal transparency.[51]

Finance

TerraCycle maintains a one percent profit margin of revenue.[41] Tom Szaky reported TerraCycle sales in 2004 as $77,000; 2005 as $500,000; 2006 as $1.6 million; 2007 as $3.3 million; 2008 as $6.6 million; 2009 as $7.3 million; and 2010 as $13.5 million.[52]

See also

References

  1. ↑ 1.0 1.1 1.2 "Company Overview of TerraCycle Inc.". Bloomberg Businessweek. Retrieved 25 July 2013.
  2. ↑ 2.0 2.1 2.2 2.3 Shambora, Jessica (13 May 2011). "One man's rubbish is Terracycle's bounty". Inner City 100. CNN Money (Cable News Network). Retrieved 6 April 2014.
  3. ↑ 3.0 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 3.11 Burlingham, Bo. "The Coolest Little Start-Up in America". Inc. Magazine. Retrieved 30 March 2014.
  4. ↑ Jo Piazza (July 28, 2002). "Garbage In, Garbage Out. A Princeton Success Story". New York Times. Retrieved 14 April 2010. By October Thomas Szaky, a sophomore from Canada who is majoring in economics, hopes to have his worm-based waste management business, Terracycle International Inc., meet a goal of disposing of 15 tons to 30 tons of organic waste a day in Princeton Township.
  5. ↑ Read, Stuart; Wiltbank, Robert (3 September 2010). "Where there's muck there's brass". Ideas. Business Life (British Airways). Retrieved 10 April 2014.
  6. ↑ 6.0 6.1 6.2 Szaky, Tom (2013). Revolution in a Bottle: How TerraCycle is Eliminating the Idea of Waste. New York, New York, USA: Penguin Group. ISBN 978-1-59184-595-9.
  7. ↑ 7.0 7.1 7.2 7.3 Strauss, Robert (10 April 2005). "But the Employees Are Really Spineless". The New York Times Company. Retrieved 7 April 2014.
  8. ↑ Field, Anne. "Where There’s Muck, There’s Brass". Immpreneur.com (F. Peacock Enterprises, LLC). Retrieved 10 April 2014.
  9. ↑ Szaky, Tom (2013). Revolution in a Bottle: How TerraCycle is Eliminating the Idea of Waste. New York, New York, USA: Penguin Group. pp. 40–41. ISBN 978-1-59184-595-9.
  10. ↑ 10.0 10.1 10.2 10.3 10.4 10.5 10.6 10.7 10.8 10.9 10.10 Feldman, Loren (2009). "Garbage mogul makes millions from trash". CNN Money. Cable News Network. Retrieved 7 April 2014.
  11. ↑ 11.0 11.1 CEO Tom Szaky (Interviewee) (22 December 2009). The duke of rubbish (News clip). Fortune Small Business.
  12. ↑ 12.0 12.1 Allen, Natalie; Knight, Matthew. "Recycling the world's trash into cash". CNN. Retrieved 10 April 2014.
  13. ↑ 13.0 13.1 13.2 Rob Walker (May 20, 2007). "The Worm Turns". New York Times. Retrieved 2010-04-14.
  14. ↑ 14.0 14.1 14.2 14.3 Bhasin, Kim (29 August 2011). "The Incredible Story Of How TerraCycle CEO Tom Szaky Became A Garbage Mogul". Business Insider. Retrieved 10 April 2014.
  15. ↑ Neff, Jack (22 October 2011). "Terracycle: Building a Small Empire on a Foundation of Compost". Advertising Age. Retrieved 11 April 2014.
  16. ↑ Szaky, Tom (2013). Revolution in a Bottle: How TerraCycle is Eliminating the Idea of Waste. New York, New York, USA: Penguin Group. p. 95. ISBN 978-1-59184-595-9.
  17. ↑ 17.0 17.1 Fenn, Donna (26 April 2012). "From Refuse to Riches". Reader's Digest Asia. The Reader's Digest Association, Inc. Retrieved 10 April 2014.
  18. ↑ Hofman, Mike. "Legal Lemons, PR Lemonade". Inc. Magazine. Retrieved 30 March 2014.
  19. ↑ 19.0 19.1 Loten, Angus. "After a Good Fight, David Forced to Settle with Goliath". Inc. Magazine. Retrieved 30 March 2014.
  20. ↑ "Talk Show". BloombergBusinessweek Magazine. Bloomberg L.P. 22 April 2007. Retrieved 6 April 2014.
  21. ↑ 21.0 21.1 Lewis, Al (8 May 2007). "A dirty business". The Denver Post. Retrieved 10 April 2014.
  22. ↑ 22.0 22.1 22.2 Shirazi, Fayazuddin A. (4 October 2007). "Fertilizer Foes Settle Fight". Chief Executive Group, LLC. Retrieved 10 April 2014.
  23. ↑ 23.0 23.1 23.2 23.3 23.4 23.5 23.6 23.7 23.8 Young, Lucie (17 June 2010). "TerraCycle: The Google of garbage?". The Telegraph: Earth. Telegraph Media Group Limited. Retrieved 7 April 2014.
  24. ↑ Szaky, Tom (2013). Revolution in a Bottle: How TerraCycle is Eliminating the Idea of Waste. New York, New York, USA: Penguin Group. pp. 135–137. ISBN 978-1-59184-595-9.
  25. ↑ 25.0 25.1 25.2 25.3 25.4 25.5 Donner, Paige (25 December 2008). "Greening Hollywood: TerraCycle's Big Green Business". Huffington Post: Green. TheHuffingtonPost.com, Inc. Retrieved 7 April 2014.
  26. ↑ Beyer, Jon. "Jon Beyer on LinkedIn". Retrieved 6 April 2014{{inconsistent citations}}
  27. ↑ Brat, Ilan. "Start-Up Seeks Profits in Mounds of Garbage". The Wall Street Journal Online: Small Business. The Wall Street Journal. Retrieved 7 April 2014.
  28. ↑ 28.0 28.1 Bounds, Gwendolyn (1 July 2008). "TerraCycle Fashions a New Life For Old Wrappers". The Wall Street Journal. Retrieved 10 April 2014.
  29. ↑ Szaky, Tom (2013). Revolution in a Bottle: How TerraCycle is Eliminating the Idea of Waste. New York, New York, USA: Penguin Group. pp. 113–122. ISBN 978-1-59184-595-9.
  30. ↑ 30.0 30.1 Birchall, Jonathan (12 January 2010). "Alchemist of all garbage". ft.com. The Financial Times Limited. Retrieved 7 April 2014.
  31. ↑ 31.0 31.1 31.2 31.3 31.4 Lewis, Al (4 March 2009). "Lewis: Mogul aims to make millions from garbage". The Denver Post: Business. The Denver Post. Retrieved 10 April 2014.
  32. ↑ 32.0 32.1 Wright, Shawn (November 16, 2012). "TerraCycle to recycle cigarette butts". Plastics News. Retrieved 25 July 2013.
  33. ↑ 33.0 33.1 33.2 33.3 Brill, Emily (13 December 2012). "Trenton-based company TerraCycle develops a way to recycle cigarette butts (with video)". Times of Trenton. Retrieved 8 April 2014.
  34. ↑ Smith, Bridie (4 March 2014). "Australia gets cigarette butt recycle scheme with TerraCycle". Brisbanetimes.com.au. Fairfax Media. Retrieved 7 April 2014.
  35. ↑ "REPEAT-Media Advisory: Progressive Waste Solutions and TerraCycle to Announce Recycling Partnership" (Press release). Market Wired.com. 29 January 2014. Retrieved 6 April 2014.
  36. ↑ 36.0 36.1 McDonald, Natalie (20 December 2007). "Splendor in the Grass". Living: People. New Jersey Monthly. Retrieved 6 April 2014.
  37. ↑ Szaky, Tom (2013). Revolution in a Bottle: How TerraCycle is Eliminating the Idea of Waste. New York, New York, USA: Penguin Group. p. 115. ISBN 978-1-59184-595-9.
  38. ↑ Green, Penelope (10 August 2011). "Making Design Out of Rubbish". The New York Times. Retrieved 10 April 2014.
  39. ↑ Dwass, Emily (2 November 2012). "It's A Wrap: TerraCycle and Mars Co-Produce Plan to Stop Flow of Candy Packaging Into Landfills". LA Weekly, LP. Retrieved 10 April 2014.
  40. ↑ Tom Szaky (Interviewee) (30 July 2013). How I Did It: TerraCycle (News clip). Huffington Post.
  41. ↑ 41.0 41.1 Bradford, Harry (30 July 2013). "TerraCycle Recycles The 'Non-Recyclable' - Cigarette Butts, Candy Wrappers And Its Own Profits". Huffington Post: Small Business. TheHuffingtonPost.com, Inc. Retrieved 7 April 2014.
  42. ↑ Szaky, Tom (2013). Revolution in a Bottle: How TerraCycle is Eliminating the Idea of Waste. New York, New York, USA: Penguin Group. p. 28. ISBN 978-1-59184-595-9.
  43. ↑ 43.0 43.1 Bhasin, Kim (25 August 2011). "PHOTOS: Inside TerraCycle's Incredible 99% Recycled Office". Business Insider.com. Retrieved 6 April 2014.
  44. ↑ 44.0 44.1 44.2 44.3 44.4 44.5 Lombardi, Candace (7 September 2011). "TerraCycle launches waste-to-profit Facebook game". CNET. Retrieved 10 April 2014.
  45. ↑ Empson, Rip (8 June 2011). "Multiplayer Facebook Game Trash Tycoon Trains You To Be Green (But In A Fun Way)". Tech Crunch. Retrieved 10 April 2014.
  46. ↑ "Terracycle taps Facebook game to encourage connection with consumers". NJ Biz (Journal Multimedia). 13 July 2011. Retrieved 10 April 2014.
  47. ↑ Dumitrache, Alina (16 September 2011). "Trash Tycoon Upcycling Game Launches on Facebook". Softpedia. Retrieved 10 April 2014.
  48. ↑ Green, Penelope (11 August 2011). "A Facebook Game Teaches ‘Upcycling’". NY Times Green Blogs. The New York Times Company. Retrieved 10 April 2014.
  49. ↑ Szaky, Tom (10 October 2011). "A Recycling Company’s New Office Reflects Its Ethic". You're the Boss Small Business Blogs. The New York Times Company. Retrieved 6 April 2014.
  50. ↑ Szaky, Tom (2013). Revolution in a Bottle: How TerraCycle is Eliminating the Idea of Waste. New York, New York, USA: Penguin Group. p. 81. ISBN 978-1-59184-595-9.
  51. ↑ Szaky, Tom (8 September 2011). "How Much Information Do You Share With Employees?". You're the Boss Small Business Blogs. The New York Times Company. Retrieved 11 April 2014.
  52. ↑ Szaky, Tom (27 June 2011). "Why I Tend to Project a Little High". You're the Boss Small Business Blogs. The New York Times Company. Retrieved 7 April 2014. Our sales have grown from $77,000 in 2004 to $500,000 in 2005 to $1.6 million in 2006 to $3.3 million in 2007 to $6.6 million in 2008 to $7.3 million in 2009 and to $13.5 million in 2010.

External links