1 00:00:00,040 --> 00:00:04,040 Overall, as we think about the idea of waste, we stand strong 2 00:00:04,040 --> 00:00:06,960 that this idea should be an anomaly at some point in human 3 00:00:06,960 --> 00:00:09,400 history because it only really came onto the scene in the 4 00:00:09,400 --> 00:00:12,360 1950s. Before that, all the outputs we 5 00:00:12,360 --> 00:00:15,360 produced were useful inputs to some other Organism. 6 00:00:15,360 --> 00:00:17,280 You know, everything, you know, our chairs would have been wood 7 00:00:17,280 --> 00:00:19,320 or our clothing would have been natural materials, you know, so 8 00:00:19,320 --> 00:00:21,840 on and so forth. It's really since the 50s that 9 00:00:21,840 --> 00:00:25,560 this sort of concept of waste has come onto the scene and it's 10 00:00:25,720 --> 00:00:28,280 a non natural concept. What we have been always 11 00:00:28,280 --> 00:00:31,800 thinking about is how do you use business models to try to create 12 00:00:31,800 --> 00:00:34,040 solutions to waste. Welcome to the Environmental 13 00:00:34,040 --> 00:00:37,040 Transformation Podcast, where we bring you interviews with 14 00:00:37,040 --> 00:00:39,680 industry leaders, climate champions, sustainability 15 00:00:39,680 --> 00:00:43,480 practitioners, EHS and hazmat professionals making an impact 16 00:00:43,480 --> 00:00:46,520 in their businesses today. Each leader solving complex 17 00:00:46,520 --> 00:00:49,280 challenges and delivering solutions within their areas of 18 00:00:49,280 --> 00:00:52,120 expertise. I'm your host Sean Grady and 19 00:00:52,120 --> 00:00:55,360 thanks for joining us today. Before we jump in, make sure to 20 00:00:55,360 --> 00:00:58,240 follow us on your devices and visit my website at 21 00:00:58,440 --> 00:01:03,440 www.seankgrady.com and sign up for our newsletter and e-mail 22 00:01:03,440 --> 00:01:05,440 announcements. Now let's get started. 23 00:01:05,560 --> 00:01:08,160 Welcome to the environmental Transformation podcast. 24 00:01:08,160 --> 00:01:11,120 I'm your host Sean Grady. Today's guest is Tom Zaki. 25 00:01:11,120 --> 00:01:15,520 Tom is the Co founder and CEO of Terrace Cycle and international 26 00:01:15,520 --> 00:01:18,000 leader in innovative sustainability solutions 27 00:01:18,520 --> 00:01:22,760 provider creating an opportunity or creating and operating first 28 00:01:22,760 --> 00:01:27,880 of their kind platforms in recycling, recycling materials 29 00:01:27,920 --> 00:01:31,240 and reuse across 21 countries. Terracycles on a mission to 30 00:01:31,240 --> 00:01:34,720 rethink waste and develop practical solutions for today's 31 00:01:34,720 --> 00:01:39,120 complex waste challenges. The company engages in an 32 00:01:39,120 --> 00:01:43,000 expansive multi stakeholder community across a wide range of 33 00:01:43,000 --> 00:01:46,880 accessible programs from Fortune 500 companies to schools and 34 00:01:46,880 --> 00:01:49,920 individuals. For the listeners who've been on 35 00:01:49,920 --> 00:01:53,520 the show or been following the show for quite a while, Tom came 36 00:01:53,520 --> 00:01:59,040 on the show during episode #20 so that was the first year we 37 00:01:59,040 --> 00:02:03,240 started this back in 2020, which I kid and hardly believe that it 38 00:02:03,240 --> 00:02:05,040 was. It's been five years Tom, since 39 00:02:05,040 --> 00:02:09,000 we last spoke, which, you know, at that point I was just 40 00:02:09,000 --> 00:02:13,000 figuring out how to do this podcasting gig and you are one 41 00:02:13,000 --> 00:02:15,360 of my biggest guests at the time back then. 42 00:02:15,360 --> 00:02:17,040 We are super excited to have you. 43 00:02:18,120 --> 00:02:22,240 And here we are over 100 episodes later and yeah, we, 44 00:02:22,240 --> 00:02:24,920 we're still going strong. We we're doing about 20 episodes 45 00:02:24,920 --> 00:02:29,160 a year and that's just enough to kind of keep a really good, you 46 00:02:29,160 --> 00:02:32,840 know, two a month type cadence and a little break here and 47 00:02:32,840 --> 00:02:35,560 there between holidays. And it's, it's been a lot of 48 00:02:35,560 --> 00:02:38,320 fun. And so, Tom, welcome back to the 49 00:02:38,320 --> 00:02:40,680 show. I really appreciate you, your 50 00:02:40,680 --> 00:02:42,840 time and coming on. Thanks for having me, it's a 51 00:02:42,880 --> 00:02:45,480 pleasure to be back. Yeah, I mean, you, there's been 52 00:02:45,480 --> 00:02:47,480 a lot happening since in the past five years. 53 00:02:47,480 --> 00:02:51,360 I mean, so I think it was one of the posts I saw that, you know, 54 00:02:51,400 --> 00:02:54,360 you you put out on LinkedIn. And I was like, you know, I 55 00:02:54,360 --> 00:02:56,920 would love to have Tom come back on the show and kind of update 56 00:02:56,920 --> 00:02:59,400 the audience because there was so much you guys been doing. 57 00:02:59,520 --> 00:03:00,600 Yeah. This would be great. 58 00:03:00,640 --> 00:03:02,960 Yeah. You founded Terra Cycle with 59 00:03:02,960 --> 00:03:06,520 this mission to eliminate waste at a time when sustainability 60 00:03:06,520 --> 00:03:08,520 was just, you know, far from mainstream. 61 00:03:08,520 --> 00:03:11,360 But now it kind of has been the big focus of mainstream in the 62 00:03:11,360 --> 00:03:13,800 past five years, and in large part by a lot of things you're 63 00:03:13,800 --> 00:03:16,280 doing others. But how has your philosophy 64 00:03:16,280 --> 00:03:19,320 around eliminating the idea of waste, which is kind of one of 65 00:03:19,320 --> 00:03:22,800 your themes here, evolved as Terra Cycle has grown into a 66 00:03:22,800 --> 00:03:25,240 global enterprise? Yeah, absolutely. 67 00:03:25,240 --> 00:03:27,320 And and it's interesting you say that, you know, we've been doing 68 00:03:27,320 --> 00:03:30,400 this now it's year 24, the quarter century next year. 69 00:03:30,720 --> 00:03:34,760 And you know, when we started Terra Cycle, it was, it was very 70 00:03:34,760 --> 00:03:36,320 much sustainability was just emerging. 71 00:03:36,320 --> 00:03:38,240 You know, you didn't have chief sustainability officers at 72 00:03:38,240 --> 00:03:39,880 companies. There may have been someone who 73 00:03:39,880 --> 00:03:43,520 sort of thinks about it on the side to now where you see a lot 74 00:03:43,520 --> 00:03:46,760 of regulation coming. It's certainly a department. 75 00:03:47,000 --> 00:03:51,040 It's, it's really evolved in a very big way for us overall, as 76 00:03:51,040 --> 00:03:53,240 we think about the idea of waste. 77 00:03:53,520 --> 00:03:55,760 This has been something that's been a lifelong fascination of 78 00:03:55,760 --> 00:03:59,040 mine. You know, we stand strong that 79 00:03:59,040 --> 00:04:02,040 this idea should be an anomaly at some point in human history 80 00:04:02,040 --> 00:04:05,040 because it only really came onto the scene in the 1950s. 81 00:04:05,280 --> 00:04:09,120 Before that, all the outputs we produced were useful inputs to 82 00:04:09,120 --> 00:04:11,320 some other Organism, you know, everything, you know, our chairs 83 00:04:11,320 --> 00:04:13,280 would have been wood or our clothing would have been natural 84 00:04:13,280 --> 00:04:14,720 materials, you know, so on and so forth. 85 00:04:15,160 --> 00:04:18,240 It's really since the 50s that this sort of concept of waste 86 00:04:18,240 --> 00:04:22,320 has come onto the scene and it's a non natural concept, you know. 87 00:04:22,320 --> 00:04:25,320 So for us, what we have been always thinking about is how do 88 00:04:25,320 --> 00:04:28,840 you use business models to try to create solutions to waste? 89 00:04:28,840 --> 00:04:31,640 And that historically started with how do we recycle things 90 00:04:31,640 --> 00:04:34,840 that are hard to recycle. That's continued to flourish and 91 00:04:34,840 --> 00:04:37,800 grow, but we've also put a lot of investment into how do we go 92 00:04:37,800 --> 00:04:40,320 beyond recycling. For us, we believe that is the 93 00:04:40,320 --> 00:04:43,720 idea of reuse and that's been our singular biggest investment 94 00:04:43,720 --> 00:04:48,200 as a company is really seeing how we can mainstream reuse and 95 00:04:48,200 --> 00:04:50,280 do that at scale. We've done that through our loop 96 00:04:50,280 --> 00:04:52,600 platform and happy to say, you know, it's not worked 97 00:04:52,600 --> 00:04:55,160 everywhere, but in France. It's the biggest reuse platform 98 00:04:55,160 --> 00:04:58,960 in the country today. And if we hope that we can then 99 00:04:58,960 --> 00:05:02,120 build on top of that and bring it to more markets and even more 100 00:05:02,120 --> 00:05:05,240 scale. You know, I've been to France 101 00:05:05,600 --> 00:05:09,120 many times, my wife and I. My wife's more of a Francophile 102 00:05:09,120 --> 00:05:11,640 than I am, but we go to France quite a bit. 103 00:05:11,640 --> 00:05:13,760 In the past five years, I think I've been six times. 104 00:05:13,760 --> 00:05:18,080 So we enjoy the the culture and the food and everything. 105 00:05:18,080 --> 00:05:21,480 But when you go to like certain restaurants there, AKA maybe a 106 00:05:21,480 --> 00:05:25,800 McDonald's, Kentucky Fried Chicken or whatever, they've got 107 00:05:25,800 --> 00:05:28,280 these reusable products. I think there are the loop 108 00:05:28,280 --> 00:05:32,560 products you guys are using and I go, you know, I know the guys 109 00:05:32,560 --> 00:05:33,880 behind that. That's really cool. 110 00:05:34,400 --> 00:05:36,240 Yeah. And look, this is where France 111 00:05:36,240 --> 00:05:37,800 leads. And I would say it's an 112 00:05:37,800 --> 00:05:40,600 important note for why, right when we started Loop. 113 00:05:40,600 --> 00:05:43,160 And I mean, we've invested $50 million into reuse. 114 00:05:43,160 --> 00:05:47,800 So it's been a big one for us. We ran pilots in US, Canada, UK, 115 00:05:47,800 --> 00:05:50,200 France and Japan. So we took a lot of bets, if you 116 00:05:50,200 --> 00:05:52,440 will, on the proverbial global roulette table. 117 00:05:52,800 --> 00:05:55,200 And France was the one that was able to really get the scale. 118 00:05:55,200 --> 00:05:58,920 And the reason is that something as profound as we use needs 119 00:05:58,920 --> 00:06:01,800 regulatory support. And what France has is that 120 00:06:01,800 --> 00:06:04,440 regulatory framework, which is absent everywhere else. 121 00:06:04,440 --> 00:06:08,120 France has laws that are A, mandating reuse, but B, also 122 00:06:08,120 --> 00:06:12,240 subsidizing it so it becomes economically competitive when it 123 00:06:12,240 --> 00:06:14,720 is embryonic and scale and then that subsidy is not needed, 124 00:06:14,800 --> 00:06:18,280 needed as the scale gets bigger. And I think that's important 125 00:06:18,280 --> 00:06:20,800 because today and you know, many countries we are deregulating, 126 00:06:20,880 --> 00:06:23,320 right? And I think it's important to 127 00:06:23,320 --> 00:06:25,840 note in sustainability in some places regulations not needed, 128 00:06:25,840 --> 00:06:29,920 but in other places it is pretty central to ideas transforming. 129 00:06:30,560 --> 00:06:34,240 Well, I mean, that's great. And I really applaud the the 130 00:06:34,240 --> 00:06:39,040 reuse practices that Loop's been doing, especially in France and 131 00:06:39,040 --> 00:06:42,640 other other locations. I hope it would pick up more 132 00:06:42,640 --> 00:06:46,080 here in the US, but there's needs to be some cultural 133 00:06:46,080 --> 00:06:49,680 changes, obviously, and some economic changes and from a 134 00:06:49,680 --> 00:06:53,000 business perspective. But I was reading a a recent 135 00:06:53,240 --> 00:06:56,440 article that came out by the National Waste Recycling 136 00:06:56,440 --> 00:06:58,640 Association's president, Michael Hoffman. 137 00:06:58,640 --> 00:07:02,280 He says he's raised concerns about America's circular economy 138 00:07:02,280 --> 00:07:05,040 is at risk. And he says we want, he says, he 139 00:07:05,040 --> 00:07:10,480 went on to say that the unified recycling PET imports, reduced 140 00:07:11,000 --> 00:07:14,520 brand commitments and declining demand for domestic recycling 141 00:07:14,520 --> 00:07:17,680 content is threatening US recycling infrastructure and the 142 00:07:17,680 --> 00:07:19,560 jobs in the communities that support it. 143 00:07:19,960 --> 00:07:23,480 Is Terrace Cycle also seeing this kind of play out in real 144 00:07:23,480 --> 00:07:25,360 time right now? And you know, if So, what can be 145 00:07:25,360 --> 00:07:28,440 done to change this concern? God, it's a good, it's a good 146 00:07:28,440 --> 00:07:30,360 point. And I would say the punchline, 147 00:07:30,360 --> 00:07:33,080 and I'll dive into it, is that yes, we see this in general 148 00:07:33,080 --> 00:07:35,040 recycling. Terrace Cycle seems to be immune 149 00:07:35,040 --> 00:07:37,080 to this and I'll explain why in a moment. 150 00:07:37,280 --> 00:07:39,680 But it is important to note that in general recycling, that's 151 00:07:39,680 --> 00:07:42,760 absolutely the case. So maybe just to dive in, the 152 00:07:42,760 --> 00:07:46,400 general recycling business model is a very simple equation. 153 00:07:47,360 --> 00:07:50,520 As a recycler, you would think about what is your cost to get 154 00:07:50,600 --> 00:07:52,280 certain inputs. Let's say you're interested in 155 00:07:52,280 --> 00:07:54,200 PET recycling. So what's your cost to get it 156 00:07:54,360 --> 00:07:56,000 and turn it into a sellable output? 157 00:07:56,080 --> 00:07:58,640 Those are your cost basis and you compare that to what you can 158 00:07:58,640 --> 00:08:01,760 sell the output for. And so you are highly exposed 159 00:08:01,760 --> 00:08:03,800 and very dependent on raw material value. 160 00:08:04,320 --> 00:08:07,600 And if raw material gets cheaper because maybe virgin prices and 161 00:08:07,600 --> 00:08:10,200 oil prices are going down, then you might not have a business 162 00:08:10,200 --> 00:08:12,400 model to run. And that certainly expresses 163 00:08:12,400 --> 00:08:16,120 itself in traditional recycling. Now what makes something 164 00:08:16,120 --> 00:08:18,960 traditionally not recyclable? It's not that it can't be, is 165 00:08:18,960 --> 00:08:21,120 that it just costs more to collect and process and the 166 00:08:21,120 --> 00:08:22,880 results are worth. And mind you, this is the case 167 00:08:22,880 --> 00:08:26,800 for the majority of objects. Our toys, our cosmetic 168 00:08:26,800 --> 00:08:30,560 packaging, our wet suits to our bicycle helmets, our writing 169 00:08:30,560 --> 00:08:34,919 instruments to our toothbrushes are not, are not recyclable, not 170 00:08:34,919 --> 00:08:37,559 because they can't be, but because they just cost more to 171 00:08:37,559 --> 00:08:39,159 collect them process and the results are worth. 172 00:08:39,480 --> 00:08:41,760 And this by the way, is getting worse every year, not better. 173 00:08:41,760 --> 00:08:44,840 Because the biggest mega trend in object design, I think across 174 00:08:44,880 --> 00:08:48,160 all objects is make it cheaper tomorrow than today. 175 00:08:48,720 --> 00:08:50,840 And there's virtues of that. Of course, it becomes more 176 00:08:50,840 --> 00:08:53,240 affordable, more profitable, one or the other or both. 177 00:08:53,560 --> 00:08:55,080 But nevertheless, that is the trend. 178 00:08:55,120 --> 00:08:57,560 You know, the best thing I would say is take any object that's 179 00:08:57,560 --> 00:09:01,600 been around for 100 years and look at its versions over 180 00:09:01,600 --> 00:09:04,320 decades, and you'll notice exactly that trend showing up. 181 00:09:05,200 --> 00:09:08,640 Yeah, on everything, clothing to biscuit packaging to toys. 182 00:09:08,640 --> 00:09:11,320 Right. And so that makes things then 183 00:09:11,360 --> 00:09:13,720 progressively less recycled in the traditional context. 184 00:09:13,800 --> 00:09:16,880 The reason we've been immune to it is we don't depend a Terra 185 00:09:16,880 --> 00:09:20,000 cycle on raw material value. It is a subsidy, but it is not a 186 00:09:20,000 --> 00:09:22,680 dependency. So for example, when we collect 187 00:09:22,680 --> 00:09:25,760 and recycle coffee capsules, sure, when we sell the aluminum 188 00:09:25,760 --> 00:09:29,160 that comes out of that, there is some value, but it offsets maybe 189 00:09:29,160 --> 00:09:31,640 1% of the cost. So if aluminum double s in 190 00:09:31,640 --> 00:09:33,640 value, OK, it offsets 2% of the cost. 191 00:09:33,640 --> 00:09:36,480 But if it goes to 0, which are, you know, hyperbolic examples, 192 00:09:36,800 --> 00:09:40,520 it would increase cost by 1%. It's not that big of a driver 193 00:09:40,800 --> 00:09:44,280 and that allows us to not be challenged by that type of 194 00:09:44,280 --> 00:09:46,280 trend. Now, relative to overall 195 00:09:46,280 --> 00:09:48,000 recycling, Terra cycles tiny, right? 196 00:09:48,000 --> 00:09:49,440 We're about 100 million in revenue. 197 00:09:49,520 --> 00:09:52,360 The overall recycling industry is orders of magnitude bigger 198 00:09:52,360 --> 00:09:54,440 than that. And you're right, this is an 199 00:09:54,440 --> 00:09:56,280 important thing to be very aware of, right? 200 00:09:56,600 --> 00:09:59,760 Traditional recycling competes against virgin materials, and 201 00:09:59,760 --> 00:10:01,520 virgin materials are cheap to extract. 202 00:10:02,120 --> 00:10:04,520 Yeah, Yeah. Well and then the comment about, 203 00:10:04,520 --> 00:10:09,800 you know, these unverified recycling PET imports and having 204 00:10:09,800 --> 00:10:13,360 lower cost version product coming into the country to be 205 00:10:13,360 --> 00:10:15,600 used, you know, for that that virgin product. 206 00:10:16,280 --> 00:10:20,760 I'm my mind's thinking, OK, one, there should be a regulatory 207 00:10:20,760 --> 00:10:23,640 framework that's, you know, kind of maybe puts a little more 208 00:10:23,640 --> 00:10:28,080 emphasis on using recyclable content that's maybe generated 209 00:10:28,080 --> 00:10:31,040 in the US versus taking it from some other country. 210 00:10:31,280 --> 00:10:35,040 And maybe maybe to stem some of this influx, maybe a little 211 00:10:35,040 --> 00:10:37,520 couple extra, some tariffs on some of this stuff could help, 212 00:10:37,720 --> 00:10:39,760 you know, so that puts more pressure for, you know, the 213 00:10:39,760 --> 00:10:43,280 local industries to produce it. And then maybe this there's a 214 00:10:43,280 --> 00:10:47,440 little more commitment from some of these companies to use 215 00:10:47,920 --> 00:10:51,440 recycled content and get some sort of incentive for it. 216 00:10:51,440 --> 00:10:54,080 I don't know but where we need to go with this, but I I'm. 217 00:10:54,440 --> 00:10:57,560 I think all of the above, I think America based on its 218 00:10:57,560 --> 00:11:01,680 regulatory sort of leanings, the easiest would be doing things 219 00:11:01,680 --> 00:11:05,680 like subsidies, you know, let's subsidized recycled content 220 00:11:05,680 --> 00:11:07,760 produced domestically. I think your point is incredibly 221 00:11:07,760 --> 00:11:12,360 valid and using post consumer, not only post industrial content 222 00:11:12,400 --> 00:11:15,560 that should have a subsidy against it so that it's easier 223 00:11:15,560 --> 00:11:18,760 for recyclers to compete because I think to the lay public, 224 00:11:18,760 --> 00:11:21,080 what's in what I think many people don't note is recycling 225 00:11:21,080 --> 00:11:23,120 is a tough business. Yeah, it's dirty. 226 00:11:23,120 --> 00:11:26,320 Business, it's not easy. It's dirty, smelly, gross, but 227 00:11:26,320 --> 00:11:28,280 it's also not oozing in profitability. 228 00:11:28,960 --> 00:11:33,600 Yeah, You know, and I think that it is important to help offset 229 00:11:33,600 --> 00:11:35,240 that. And we have mechanisms for that. 230 00:11:35,240 --> 00:11:38,720 You know, we subsidized certain industries to make it easier, 231 00:11:38,720 --> 00:11:40,440 you know, to create domestic value. 232 00:11:40,440 --> 00:11:43,320 And you know, one of the really interesting things I saw is 233 00:11:44,800 --> 00:11:48,120 where suddenly like, you know, take a tangential example, like 234 00:11:48,400 --> 00:11:51,640 the clothing we use space, which is somewhat tangential to this, 235 00:11:51,640 --> 00:11:54,320 you know, think companies that are big in that thread up and 236 00:11:54,320 --> 00:11:55,720 reel to reel or rent the runaway. 237 00:11:55,720 --> 00:11:57,680 You know, these companies that are doing re commerce and 238 00:11:57,680 --> 00:12:00,000 clothing, their business models have really struggled. 239 00:12:00,040 --> 00:12:01,840 You know, they've really struggled to make money. 240 00:12:01,840 --> 00:12:03,760 And if you look at their share prices, they've been on a 241 00:12:03,760 --> 00:12:07,760 progressive, you know, decrease. But when tariffs came in and 242 00:12:07,760 --> 00:12:12,800 made it more expensive to bring in foreign goods, that's that 243 00:12:12,840 --> 00:12:15,880 was what created the first rally in their business models. 244 00:12:15,880 --> 00:12:17,880 And they started really moving in the right direction. 245 00:12:18,200 --> 00:12:20,440 It's not to say I'm advocating for tariffs or not, but just 246 00:12:20,440 --> 00:12:24,160 more to say that some form of economic benefit to these 247 00:12:24,160 --> 00:12:27,440 domestic players is important because, yeah, on their own, the 248 00:12:27,440 --> 00:12:30,160 businesses are not as easy. Yeah. 249 00:12:30,160 --> 00:12:34,920 And I don't know if Congress or you know, some of these Congress 250 00:12:34,920 --> 00:12:37,360 people will take this type of an approach and look at it a little 251 00:12:37,360 --> 00:12:40,240 closer, but who knows, maybe somebody will take the mantle 252 00:12:40,240 --> 00:12:42,840 and then run with it a little bit and and maybe it'll be some 253 00:12:43,120 --> 00:12:45,320 legislation implemented. But you know, there is 254 00:12:45,320 --> 00:12:48,200 legislation expanding. And then I want to get into 255 00:12:48,200 --> 00:12:49,080 this. I mean, you know, with 256 00:12:49,080 --> 00:12:52,080 governments in introducing stricter EPR, which, you know, 257 00:12:52,080 --> 00:12:55,120 the extended producer responsibility mandates and ESG 258 00:12:55,120 --> 00:12:58,440 reporting requirements, or should I say expectations, How 259 00:12:58,440 --> 00:13:01,080 do you see terror cycles roll, you know, shifting? 260 00:13:01,080 --> 00:13:06,160 Because I gotta imagine EPR is a big benefit to your business. 261 00:13:06,240 --> 00:13:09,120 Yeah, when you're in the right location where those 262 00:13:09,120 --> 00:13:11,720 expectations are real. Yeah, absolutely. 263 00:13:11,720 --> 00:13:16,200 So in EPR, right, if we look at the 20 countries where terror 264 00:13:16,200 --> 00:13:19,200 cycle operates, the vast majority have had federal EPR 265 00:13:19,200 --> 00:13:21,280 for a very long time. And in fact in the Germany, 266 00:13:21,280 --> 00:13:24,480 Austria, Swiss regions, the second biggest PRO which the 267 00:13:24,480 --> 00:13:28,640 administrator of the PEPR taxes owns 25% of our business. 268 00:13:28,880 --> 00:13:30,640 You know, so we have really great connections there. 269 00:13:30,640 --> 00:13:32,920 And in fact, in America, this is what we're seeing now state by 270 00:13:32,920 --> 00:13:34,200 state is where the regs are coming. 271 00:13:34,520 --> 00:13:38,240 California, especially with Senate Bill 54, Senate Bill 343, 272 00:13:38,520 --> 00:13:42,000 Senate Bill 54 more the EPR bill, Senate 343 is more the 273 00:13:42,000 --> 00:13:46,000 truth in recycling labeling bill, but it's coming now. 274 00:13:46,160 --> 00:13:48,640 It's challenging that it's going to be hyper fragmented, you 275 00:13:48,640 --> 00:13:53,160 know, across every 50 state. One unifying factor is that CAA 276 00:13:53,160 --> 00:13:56,160 seems to be the operator of most of these EPR, you know, 277 00:13:56,160 --> 00:13:59,600 regulations, at least the same body that's going to be affect, 278 00:13:59,600 --> 00:14:01,960 you know, becoming the PRO for us. 279 00:14:01,960 --> 00:14:04,480 The way we interact with the EPR is 1. 280 00:14:04,840 --> 00:14:07,320 When we collect and you know, we focus on the things that are not 281 00:14:07,320 --> 00:14:09,440 locally recyclable, right? We don't want to recycle, you 282 00:14:09,440 --> 00:14:11,240 know, collect through Terra cycle things that are locally 283 00:14:11,240 --> 00:14:13,680 recyclable, but things that are not is our domain. 284 00:14:14,360 --> 00:14:18,800 And so in many cases we work with the EPR organizations to 285 00:14:18,800 --> 00:14:21,360 become those alternative collection models for the things 286 00:14:21,360 --> 00:14:25,880 that the core blue box curbside recycling is not for as big as 287 00:14:25,880 --> 00:14:28,240 like in the state of Maine. We run the state's entire 288 00:14:28,240 --> 00:14:32,280 e-waste EPR system goes through US, you know, so it can be 289 00:14:32,280 --> 00:14:35,440 anything from electronics all the way to food packages. 290 00:14:35,840 --> 00:14:39,200 We also see that in in for example, California regulation, 291 00:14:39,200 --> 00:14:42,360 the Senate Bill 54. There is a lot of talk around 292 00:14:42,360 --> 00:14:44,680 reuse. So that could, you know, bring 293 00:14:44,680 --> 00:14:48,320 out the type of work we do in France with reuse into the US at 294 00:14:48,320 --> 00:14:50,080 a level of like a state of California. 295 00:14:50,640 --> 00:14:53,400 And generally we think it's, you know, it's a good thing to start 296 00:14:53,400 --> 00:14:56,680 producing the obligation to pay for those externalities. 297 00:14:57,120 --> 00:15:01,160 I think the thing that needs to be eyes wide open on an EPR is 298 00:15:01,400 --> 00:15:03,080 EPR is not necessarily a silver bullet. 299 00:15:03,200 --> 00:15:06,840 It's a funding mechanism and it generally moves the funding for 300 00:15:06,840 --> 00:15:09,280 recycling away from municipalities, which is 301 00:15:09,280 --> 00:15:12,680 expressed to us individuals in our property taxes or if we 302 00:15:12,680 --> 00:15:16,360 don't own them in our rent to our product prices because it 303 00:15:16,360 --> 00:15:18,240 goes to the producers. So it's sort of moves from a 304 00:15:18,240 --> 00:15:21,480 property tax to a sales tax. The important thing to really be 305 00:15:21,480 --> 00:15:24,760 aware of is the net funding increasing or is the net funding 306 00:15:24,760 --> 00:15:27,440 static or is it decreasing? Because we've seen, for example, 307 00:15:27,440 --> 00:15:30,800 in some provinces in Canada, the net funding goes down when that 308 00:15:30,800 --> 00:15:33,640 move occurs and in fact, less things get recycled. 309 00:15:34,240 --> 00:15:36,480 So it's all about the money flow, right? 310 00:15:36,480 --> 00:15:38,880 If the money flow increases, more will get recycled. 311 00:15:38,880 --> 00:15:41,760 If it actually decreases, which is could, less will get 312 00:15:41,760 --> 00:15:44,000 recycled. And I think that to me has been 313 00:15:44,000 --> 00:15:46,800 the biggest unlock in thinking about this whole topic of 314 00:15:46,800 --> 00:15:49,840 circular economy is that it's not about technical anything. 315 00:15:50,160 --> 00:15:54,120 It's about the money flow. I'll, you know, I'll give you a 316 00:15:54,120 --> 00:15:56,480 joke that's been really an easy way for me to express it. 317 00:15:56,480 --> 00:15:59,280 I'll play that with you if that's all right, which is 318 00:15:59,600 --> 00:16:04,080 imagine a cup is going to appear in front of you and it's gross, 319 00:16:04,080 --> 00:16:05,880 it's dirty, right? You can't just drink from it. 320 00:16:05,880 --> 00:16:07,000 You're going to have to go clean it. 321 00:16:07,360 --> 00:16:11,200 And my hope is that in a vacuum, like no one's watching, you 322 00:16:11,200 --> 00:16:13,000 know, there's no law telling you to do anything. 323 00:16:13,000 --> 00:16:16,360 You're going to take that cup and clean it and drink from it. 324 00:16:17,200 --> 00:16:20,360 So the first cup I put in front of you is a cup made from solid 325 00:16:20,360 --> 00:16:22,160 gold. What's your action? 326 00:16:23,400 --> 00:16:24,520 Are you happily gonna take it or not? 327 00:16:25,080 --> 00:16:28,080 Yeah, absolutely. Yeah, and I imagine you would. 328 00:16:28,080 --> 00:16:30,640 And you'd still clean it because it's valuable, right? 329 00:16:30,680 --> 00:16:32,720 Yeah, and you'd take more and more if more were to appear 330 00:16:32,720 --> 00:16:33,680 fair. Yeah. 331 00:16:33,960 --> 00:16:36,880 OK what if it's now a cheap plastic cup? 332 00:16:37,920 --> 00:16:40,880 Horrendously dirty. One of those like 5 cent plastic 333 00:16:40,880 --> 00:16:43,640 cups. Yeah, maybe. 334 00:16:44,280 --> 00:16:45,720 Depends. Probably not, right? 335 00:16:46,120 --> 00:16:48,120 Probably not, right? Depends on if I still have a 336 00:16:48,120 --> 00:16:49,680 bunch of those gold ones sitting on the shelf. 337 00:16:49,840 --> 00:16:51,400 Yeah, yeah. So imagine it's just that. 338 00:16:51,400 --> 00:16:53,440 I imagine you'd ignore it right now. 339 00:16:53,720 --> 00:16:58,160 What could get you to behave the same way on that plastic cup as 340 00:16:58,160 --> 00:17:00,120 the Gold Cup? I imagine if there was also some 341 00:17:00,120 --> 00:17:02,840 money in the cup that is yours to take if you take it and clean 342 00:17:02,840 --> 00:17:06,319 it, right, and it's some money level, let's maybe call it a $20 343 00:17:06,319 --> 00:17:08,960 bill, you go, great, I'll take and I'll take more. 344 00:17:09,400 --> 00:17:12,839 And I think that's the essence of this to create cuz recycling 345 00:17:12,839 --> 00:17:16,359 is a free market system. There is no law forcing any 346 00:17:16,359 --> 00:17:19,359 actor to behave right. So it's all free market. 347 00:17:19,599 --> 00:17:23,480 Which means either the reason to collect and recycle has to be 348 00:17:23,480 --> 00:17:26,160 embedded into the object, which means the value of it needs to 349 00:17:26,160 --> 00:17:28,079 be good enough to bother dealing with it. 350 00:17:28,079 --> 00:17:30,200 Like an aluminum can or a corrugate box. 351 00:17:30,840 --> 00:17:32,840 Or it has to be given to the object. 352 00:17:33,080 --> 00:17:35,120 If it isn't, and if we acknowledge that the biggest 353 00:17:35,120 --> 00:17:37,760 mega trend is to move from the Gold Cup to the plastic cup, 354 00:17:37,760 --> 00:17:40,360 everything is moving in that direction, then it's about 355 00:17:40,360 --> 00:17:42,640 watching the money flow that's attached on top of it. 356 00:17:43,240 --> 00:17:44,440 Yeah, yeah. That's good. 357 00:17:44,440 --> 00:17:46,120 That's good. Hello, ET Nation. 358 00:17:46,240 --> 00:17:48,360 I want to thank you for listening to the podcast. 359 00:17:48,360 --> 00:17:50,280 If you're enjoying the interviews we bring you, 360 00:17:50,600 --> 00:17:53,600 consider supporting the program by visiting my website at 361 00:17:53,600 --> 00:17:56,600 seankgrady.com and buy me a cup of coffee. 362 00:17:56,600 --> 00:17:59,520 Proceeds will go towards helping me continue producing timely 363 00:17:59,520 --> 00:18:02,160 content and offset production costs. 364 00:18:03,080 --> 00:18:05,400 I'd also like to take a moment and recognize a few of our 365 00:18:05,400 --> 00:18:09,080 sponsors of the show who have been amazing partners and our ET 366 00:18:09,080 --> 00:18:11,920 Nation legends. 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If you're ready to take control 402 00:20:15,880 --> 00:20:18,880 of your waste management processes and optimize your 403 00:20:18,880 --> 00:20:23,040 business, visit wastelink.com to schedule a demo today. 404 00:20:24,320 --> 00:20:28,320 You know, I think, I think a lot of people also through 405 00:20:28,320 --> 00:20:31,120 education, and I think that's for another area that we don't 406 00:20:31,120 --> 00:20:36,760 really focus enough on is this concept of educating the public 407 00:20:36,760 --> 00:20:40,440 on the value and the virtue, so to speak, of just proper 408 00:20:40,440 --> 00:20:43,880 recycling and having constant, you know, like Schoolhouse Rock. 409 00:20:44,560 --> 00:20:47,600 I, you know, videos for kids that that they, they can just 410 00:20:47,600 --> 00:20:49,520 have it in their background going on. 411 00:20:49,520 --> 00:20:52,200 They're learning about it and it just constantly is playing and 412 00:20:52,200 --> 00:20:54,360 looping through their normal daily life. 413 00:20:54,640 --> 00:20:57,480 And they're always getting a little seed planted about the 414 00:20:57,480 --> 00:21:00,000 value of doing this. And I don't think that we're 415 00:21:00,000 --> 00:21:02,520 doing enough in that space from, you know, an education 416 00:21:02,520 --> 00:21:05,120 perspective to see the value. Of it, yeah, I think you're 417 00:21:05,120 --> 00:21:06,360 right. And you know, what's nice about 418 00:21:06,720 --> 00:21:09,840 that theme from an education and communication point of view is 419 00:21:10,640 --> 00:21:13,880 reduce, reuse, recycle is the first lesson we learn in school. 420 00:21:14,400 --> 00:21:16,040 That is not a climate change lesson. 421 00:21:16,040 --> 00:21:18,320 It's not a diversity of species lesson. 422 00:21:18,320 --> 00:21:21,320 It is a circular economy lesson. It's very easy. 423 00:21:21,760 --> 00:21:23,720 It's the only thing really in sustainability that we 424 00:21:23,720 --> 00:21:27,120 physically touch, you know, that it's and we physically make a 425 00:21:27,120 --> 00:21:30,120 decision on what to do, you know, with the with the waste. 426 00:21:30,560 --> 00:21:33,600 And I think if we drove excitement, a huge benefit will 427 00:21:33,600 --> 00:21:35,120 come. You know, we did this study a 428 00:21:35,120 --> 00:21:37,320 number of years ago with one of the big beverage companies where 429 00:21:37,320 --> 00:21:40,040 we put out recycling bins and trash bins and busy train 430 00:21:40,040 --> 00:21:43,720 stations, and they were both clearly marked right beside each 431 00:21:43,720 --> 00:21:47,120 other, so there's no difference. And we watched how many people 432 00:21:47,120 --> 00:21:49,880 would put the recyclable bottle, like an aluminum can or PT 433 00:21:49,880 --> 00:21:52,320 bottle in the recycling bin. And honestly, it was only half. 434 00:21:52,400 --> 00:21:54,040 The other half, we just throw it in the trash bin, and they're 435 00:21:54,080 --> 00:21:55,840 right fucking beside each other. Like, yeah. 436 00:21:56,120 --> 00:21:59,440 You're like. Yeah, then we added excitement. 437 00:21:59,440 --> 00:22:02,880 We added some devices that when you put in the recycling bin, it 438 00:22:02,880 --> 00:22:05,120 would thank you, like the bin would speak to you or it would 439 00:22:05,120 --> 00:22:08,320 create some cool sound effect. Just some excitement, no money, 440 00:22:08,600 --> 00:22:11,560 nothing else. It went to 95% good. 441 00:22:11,840 --> 00:22:14,440 And we even saw people pulling out of the trash can to put in 442 00:22:14,440 --> 00:22:17,560 the recycling bin or litter off the ground and putting in the 443 00:22:17,560 --> 00:22:20,920 recycling bin to get that fun. And that little excitement I 444 00:22:20,920 --> 00:22:23,240 think goes a long way. And it's important because if 445 00:22:23,240 --> 00:22:26,480 you look at the narrative around recycling, I would say 20 years 446 00:22:26,480 --> 00:22:30,040 ago it was there like that. Now there's a lot of vilifying 447 00:22:30,040 --> 00:22:32,320 at oh, recycling doesn't work. Oh, why bother? 448 00:22:32,320 --> 00:22:35,640 There's a lot of media around being negative on it and 449 00:22:36,480 --> 00:22:40,520 recycling isn't perfect, but it needs to be supported as much as 450 00:22:40,520 --> 00:22:43,120 possible, you know, from communication as well. 451 00:22:43,600 --> 00:22:46,080 I mean, I could just imagine, I mean you could really gamify 452 00:22:46,080 --> 00:22:49,920 that whole thing with, you know, AI and and video cameras. 453 00:22:49,920 --> 00:22:52,240 Now you can have those two bents in there and submit those in a 454 00:22:52,240 --> 00:22:53,840 recyclable product in the trash and go. 455 00:22:54,680 --> 00:22:56,760 Yeah, yeah. And I think it's not and. 456 00:22:57,080 --> 00:23:00,680 Then like it goes with the right one, they go, yeah, you know, I 457 00:23:00,680 --> 00:23:03,320 think pause. And it's, you know, look, it's 458 00:23:03,320 --> 00:23:07,160 not that people are bad. It's not that they are the 459 00:23:07,160 --> 00:23:10,080 aluminum can consciously, Yeah, it's not that. 460 00:23:10,280 --> 00:23:13,760 It's that we are so busy, it's more apathy and you can correct 461 00:23:13,760 --> 00:23:15,960 that by just a little bit of free stimulus. 462 00:23:15,960 --> 00:23:16,880 It's not. Yeah, right. 463 00:23:17,040 --> 00:23:19,000 People for it, yeah, I think that would be kind of a neat 464 00:23:19,000 --> 00:23:23,560 little project and you see recycling rate scope, Oh, man. 465 00:23:23,760 --> 00:23:26,480 Certain locations, yeah, right. Totally true. 466 00:23:26,760 --> 00:23:27,360 Totally. True. 467 00:23:27,920 --> 00:23:29,280 Yeah. Well, you know, OK, well, let's 468 00:23:29,280 --> 00:23:31,840 stay on the loop concept here because the platform is really 469 00:23:31,840 --> 00:23:34,920 good. And when we first spoke five 470 00:23:34,920 --> 00:23:38,240 years ago, you were just kind of getting underway with launching 471 00:23:38,240 --> 00:23:41,200 it and then having some initial success, which I believe, you 472 00:23:41,200 --> 00:23:43,000 know, that was one of the reasons I think we definitely 473 00:23:43,000 --> 00:23:45,760 connected back then was this whole loop concept and I thought 474 00:23:45,800 --> 00:23:47,800 this is really great. So here, you know, Loops 475 00:23:48,160 --> 00:23:51,360 representing a bold vision for reusable packaging and circular 476 00:23:51,360 --> 00:23:53,960 retail systems. So, you know, let's maybe you 477 00:23:53,960 --> 00:23:55,920 could talk a little bit about some of the companies you're 478 00:23:55,920 --> 00:23:59,880 working with and also, you know, what have been the biggest 479 00:23:59,880 --> 00:24:03,840 logistical or behavioral barriers to scaling Loop 480 00:24:03,840 --> 00:24:06,600 globally and how are you addressing them to make them 481 00:24:06,600 --> 00:24:10,600 more convenient for reuse, eliminate single use, you know? 482 00:24:10,600 --> 00:24:11,840 Yeah, no. And it's been a lot of 483 00:24:11,840 --> 00:24:14,320 unintuitive learning, so I look forward to diving in. 484 00:24:14,320 --> 00:24:16,640 So first, just what is Loop's role? 485 00:24:16,640 --> 00:24:18,800 Right. So think you know, products like 486 00:24:18,800 --> 00:24:22,000 a ketchup bottle or a shampoo bottle or you know, a bottle of 487 00:24:22,000 --> 00:24:24,280 Coke, you know, or you know, whatever it may be, a bottle of 488 00:24:24,280 --> 00:24:27,800 laundry insurgent. So our role is to try to make 489 00:24:27,800 --> 00:24:31,400 all that reusable and we have two ways, 2 functions that Loop 490 00:24:31,400 --> 00:24:32,960 does. One is we become a system 491 00:24:32,960 --> 00:24:34,800 steward. So we are out there talking to 492 00:24:34,800 --> 00:24:37,920 all the major producers to join in and then all the major 493 00:24:37,920 --> 00:24:40,440 retailers to sell this stuff those because we don't want to 494 00:24:40,440 --> 00:24:43,120 be a producer or a retailer. And that's been, you know, one 495 00:24:43,120 --> 00:24:45,800 big success point on Loop is we were able to get 200 of the 496 00:24:45,800 --> 00:24:47,800 world's biggest consumer product companies to join. 497 00:24:47,800 --> 00:24:50,600 Think you're Unilevers, your P and GS, your Pepsi's Cokes and 498 00:24:50,600 --> 00:24:53,400 so on and so forth. All the way to Nestle and P&G 499 00:24:53,400 --> 00:24:55,640 are investors and part owners of Loop and so on. 500 00:24:56,280 --> 00:24:59,840 And the role when the brand comes in is we help them enable 501 00:24:59,840 --> 00:25:01,520 reusable versions of their product. 502 00:25:01,800 --> 00:25:04,840 How do you make sure that that product, that package is 503 00:25:04,840 --> 00:25:07,880 reusable, that it can go around and our threshold is a minimum 504 00:25:07,880 --> 00:25:11,040 of 10 times. Then we go across and then work 505 00:25:11,040 --> 00:25:13,560 with the retailers to make sure that they dedicate shelf space 506 00:25:13,560 --> 00:25:17,120 to these reusable offerings and enable that a consumer can bring 507 00:25:17,120 --> 00:25:20,200 back the used packaging to the store and put it into a loop 508 00:25:20,200 --> 00:25:21,720 bin. That's to call it platform 509 00:25:21,720 --> 00:25:25,080 stewardship. Then our operational function is 510 00:25:25,080 --> 00:25:27,920 where the waste management function of reuse, where we are 511 00:25:27,920 --> 00:25:31,840 the bins, we service the bins, we return deposits, we sort out 512 00:25:31,840 --> 00:25:35,560 packaging almost like a Murph, but down to a product level at a 513 00:25:35,560 --> 00:25:38,720 food grade standard. So exactly like a Murph, but the 514 00:25:38,720 --> 00:25:40,920 opposite of like a quick conveyor belt in a dirty 515 00:25:40,920 --> 00:25:42,680 environment. Think like food grade down to a 516 00:25:42,680 --> 00:25:45,560 product level and then instead of shredding and melting, it's 517 00:25:45,560 --> 00:25:47,720 cleaning and then it goes back to the producer. 518 00:25:47,720 --> 00:25:50,480 They fill it up and sell it to the next different consumer. 519 00:25:50,920 --> 00:25:54,080 The American proxy would be propane tanks, but imagine that 520 00:25:54,320 --> 00:25:59,480 expanded to all consumable goods from gummy vitamins to infant 521 00:25:59,480 --> 00:26:01,080 ointment. I mean, you name it, anything 522 00:26:01,080 --> 00:26:03,600 that goes in the package. So that's the essence. 523 00:26:03,960 --> 00:26:07,120 Then we effectively took pilots with all the world's biggest 524 00:26:07,120 --> 00:26:09,720 brands and retailers, like here in the US, Walmart all the way 525 00:26:09,720 --> 00:26:13,240 to Kroger in Canada, Loblaw, which is their biggest retailer, 526 00:26:13,240 --> 00:26:15,240 UK, Tesco and so on and so forth. 527 00:26:15,560 --> 00:26:20,520 Carrefour in France and we first land on online pilots then we 528 00:26:20,520 --> 00:26:22,560 transitioned that's probably when we spoke five years ago 529 00:26:22,560 --> 00:26:25,680 then we transitioned that to in store pilots first interesting 530 00:26:25,680 --> 00:26:28,080 point because we mentioned behavior you couldn't tell the 531 00:26:28,080 --> 00:26:30,880 difference between American, the Japanese, the Canadian, French 532 00:26:30,880 --> 00:26:33,600 or British consumer. Everyone behaved the same. 533 00:26:34,000 --> 00:26:37,600 They were totally fine with it, liked it, did the returns all. 534 00:26:37,840 --> 00:26:42,560 And in fact, all five countries don't have active package reuse 535 00:26:42,560 --> 00:26:45,160 systems on them today. It's not like the French public 536 00:26:45,160 --> 00:26:47,920 are returning, you know, like in Germany, for example, where you 537 00:26:47,920 --> 00:26:52,400 do return your beer bottles and certain soda bottles for deposit 538 00:26:52,400 --> 00:26:53,640 and refill. Yeah. 539 00:26:53,760 --> 00:26:56,400 So that all went well. Then we're able to get into 540 00:26:56,400 --> 00:26:58,760 pilots, 10 store pilots, give or take, you know, in all these 541 00:26:58,760 --> 00:27:00,120 markets. And that all went well. 542 00:27:00,120 --> 00:27:03,400 And that's where we really saw a big differential between France 543 00:27:03,400 --> 00:27:05,680 and everywhere else. France continued to scale 544 00:27:05,680 --> 00:27:07,760 aggressively. And in all other markets, we 545 00:27:07,760 --> 00:27:09,080 were not able to get out of pilots. 546 00:27:09,080 --> 00:27:11,640 So we shut those down. And France became this whole 547 00:27:11,680 --> 00:27:14,600 sort of, you know, bastion of success, while everywhere else 548 00:27:14,600 --> 00:27:17,120 we shuttered. And the big reason is the 549 00:27:17,120 --> 00:27:18,560 regulatory environment in France. 550 00:27:18,560 --> 00:27:21,240 There's mandates mandating that reduce must, you know, be 551 00:27:21,240 --> 00:27:23,480 adopted at a certain scale by 2027. 552 00:27:23,840 --> 00:27:26,720 And their subsidies helped offset some of the early 553 00:27:27,000 --> 00:27:30,200 adoption costs. So that allowed us to really 554 00:27:30,200 --> 00:27:32,200 scale. Now, what are the some of the 555 00:27:32,200 --> 00:27:34,480 unintuitive learnings? And these were, I'll give you 2 556 00:27:34,480 --> 00:27:37,960 of the biggest ones that like I, you know, wow, I had no idea 557 00:27:37,960 --> 00:27:39,240 this was the case till we learned it. 558 00:27:40,280 --> 00:27:44,560 The first is consumer behavior. Because when you talk to a 559 00:27:44,560 --> 00:27:47,360 brand, when you think consumer, if it's an oral care brand, you 560 00:27:47,360 --> 00:27:49,280 are only thinking about the consumer behavior around 561 00:27:49,280 --> 00:27:51,400 toothpaste. Or if you talk to a Coca-Cola, 562 00:27:51,400 --> 00:27:54,240 it's only around the consumer behavior around a can of Coke. 563 00:27:54,360 --> 00:27:55,280 Right. Yeah, yeah. 564 00:27:55,640 --> 00:27:57,280 And you get really sort of pigeon holed. 565 00:27:57,280 --> 00:27:59,720 But the reality is when you and I go shopping, we're not 566 00:27:59,720 --> 00:28:01,920 thinking about toothpaste or or coke. 567 00:28:01,920 --> 00:28:04,400 We're thinking about shopping and getting in and out of that 568 00:28:04,400 --> 00:28:07,600 shop quickly and efficiently and, you know, getting what our 569 00:28:07,600 --> 00:28:08,720 family want. Yeah. 570 00:28:08,760 --> 00:28:12,200 So here's a good example of something unintuitive when we 571 00:28:12,360 --> 00:28:16,560 did, let's say, a reuse display with five products only, and 572 00:28:16,560 --> 00:28:19,040 this would be in France. An example was like a Heineken, 573 00:28:19,320 --> 00:28:22,240 maybe a still and sparkling water with Damon and then like 574 00:28:22,240 --> 00:28:24,680 two different Coke flavors with Coke, like 5 products. 575 00:28:25,680 --> 00:28:28,360 The sales were pretty low and the return rates were dismal, 576 00:28:28,360 --> 00:28:30,240 like 10% of the packaging would come back. 577 00:28:30,920 --> 00:28:33,480 Then you do the exact same store, same everything, but go 578 00:28:33,480 --> 00:28:36,080 to 50 products. So all those same water, coke, 579 00:28:36,280 --> 00:28:39,360 beer, but then you add on shampoo, conditioner, chickpeas, 580 00:28:39,440 --> 00:28:42,000 you name it, a whole random assortment of 50 products. 581 00:28:42,600 --> 00:28:47,320 The purchase rates go up close to 2000% more per product 582 00:28:47,360 --> 00:28:51,440 increase in sales and the return rates go from failure like 1015% 583 00:28:51,440 --> 00:28:53,920 to 8090%, which is a great success. 584 00:28:54,720 --> 00:29:00,040 And So what that taught us is consumers won't do reuse in like 585 00:29:00,040 --> 00:29:04,000 a product by product vacuum. They will either do it big if 586 00:29:04,000 --> 00:29:06,000 there's a lot of choice or not do it at all. 587 00:29:06,000 --> 00:29:08,480 And that includes the purchase and especially the return, which 588 00:29:08,480 --> 00:29:10,960 is a key KPI in the world of reuse. 589 00:29:11,160 --> 00:29:15,200 I could see that I because, you know, basically it takes too 590 00:29:15,200 --> 00:29:19,320 much effort to sort out the one or two or five pieces versus the 591 00:29:19,320 --> 00:29:21,160 50 pieces they currently do every day. 592 00:29:21,160 --> 00:29:23,440 They're like, I just want to do it all at once or not at all 593 00:29:23,440 --> 00:29:24,160 because it's. Too much. 594 00:29:24,760 --> 00:29:26,760 You know, the best metaphor is I'm not going to make an organic 595 00:29:26,760 --> 00:29:28,320 salad with just organic tomatoes. 596 00:29:29,040 --> 00:29:32,560 Yeah, So that and there's lots of derivatives of that learning 597 00:29:32,760 --> 00:29:34,440 that came up. But that was a big one for us, 598 00:29:34,440 --> 00:29:37,880 which means that reuse has got to go big systemic or has no 599 00:29:37,880 --> 00:29:41,760 chance of success. Another was when we first 600 00:29:41,760 --> 00:29:45,040 started Loop, we got really seduced and so did all of our 601 00:29:45,040 --> 00:29:49,520 partners by the idea that when you move to reuse, the package 602 00:29:49,720 --> 00:29:53,520 suddenly becomes a depreciatable asset and not a cost of goods 603 00:29:53,520 --> 00:29:55,240 sold. In other words, in a disposable 604 00:29:55,240 --> 00:29:57,920 package, you got to embed the entire price of that package 605 00:29:57,960 --> 00:30:01,560 into the singular purchase at 100% because the consumer owns 606 00:30:01,560 --> 00:30:03,480 the package in the end and you never get it back. 607 00:30:04,280 --> 00:30:08,400 In reuse, you embed only the use of that package. 608 00:30:08,400 --> 00:30:11,320 So if that package is going to go around 30 times, every 609 00:30:11,320 --> 00:30:15,240 consumer is only charged 130th of the cost because it becomes a 610 00:30:15,240 --> 00:30:18,360 depreciatable asset. And what that opens up is the 611 00:30:18,360 --> 00:30:21,240 ability for the package to become incredibly beautiful, 612 00:30:21,600 --> 00:30:24,560 like Haagen Dazs containers made from stainless steel with 613 00:30:24,600 --> 00:30:28,000 insulation properties and like the best type package you've 614 00:30:28,000 --> 00:30:31,800 ever seen or Cascade package ever museum quality type stuff. 615 00:30:32,600 --> 00:30:36,960 And that is true, but we forgot the pragmatic, which is that a 616 00:30:36,960 --> 00:30:40,160 consumer product company like Nestle is wonderful at making 617 00:30:40,160 --> 00:30:44,200 anything in small volume out of a lab and then great at making 618 00:30:44,200 --> 00:30:47,600 it a massive volume, but really can't do anything in between 619 00:30:47,600 --> 00:30:50,280 those two book ads. And so suddenly in some of these 620 00:30:50,280 --> 00:30:52,880 pilots where we were fulfilling these beautiful, gorgeous 621 00:30:52,880 --> 00:30:56,720 packages at 5 stores, 10 stores, producers came to us and said, 622 00:30:57,400 --> 00:31:00,440 that's all great, but don't call us until you're at 1000 stores 623 00:31:00,440 --> 00:31:02,600 because we can't fulfill anything in between that. 624 00:31:03,720 --> 00:31:06,160 And remember the first lesson, which is you need a massive 625 00:31:06,160 --> 00:31:08,360 assortment. Suddenly you have this no man's 626 00:31:08,360 --> 00:31:11,600 land of how do you, because the retailers can't scale that fast 627 00:31:11,600 --> 00:31:13,600 because they're scaling a system, you know, so you got to 628 00:31:13,640 --> 00:31:16,160 scale it like 20 stores here, 50 stores there. 629 00:31:16,560 --> 00:31:20,080 And so that took us on this whole journey of how do we solve 630 00:31:20,080 --> 00:31:22,720 that? And what we realized is if you 631 00:31:22,720 --> 00:31:26,080 take all packaging forms in the world, all of them something 632 00:31:26,080 --> 00:31:28,040 that packages the content and you put them on one end of the 633 00:31:28,040 --> 00:31:31,840 spectrum, the most expensive packs per kilo or liter of what 634 00:31:31,840 --> 00:31:34,040 you're packaging. Think perfume bottles, laundry 635 00:31:34,040 --> 00:31:37,120 detergent bottles, the wine bottle, Scotch bottles, things 636 00:31:37,120 --> 00:31:39,000 of that nature. And on the other end, you put 637 00:31:39,000 --> 00:31:41,840 the cheapest way to package a kilo or liter thing, flexible 638 00:31:41,840 --> 00:31:45,120 film, you know, yeah, even like even cheaper like a pouch, you 639 00:31:45,120 --> 00:31:47,560 know, or a or a bag for potatoes, right. 640 00:31:47,760 --> 00:31:52,880 Put it over there. Yeah that bottom third those 641 00:31:52,880 --> 00:31:55,920 packages, most of them already conducive to reuse like a Scotch 642 00:31:55,920 --> 00:31:57,720 bottle. You don't have to improve its 643 00:31:57,720 --> 00:31:59,640 quality to be able to have it to go around. 644 00:31:59,640 --> 00:32:01,960 It's honestly way over designed to be used. 645 00:32:01,960 --> 00:32:05,800 Once way over designed it can easily be cleaned and refilled 646 00:32:06,240 --> 00:32:10,160 and boom, no package change. And in fact 1/3 of packaging on 647 00:32:10,160 --> 00:32:14,200 a supermarket is already conducive to reuse with next to 648 00:32:14,200 --> 00:32:17,160 NO0 to next to no changes at all. 649 00:32:17,640 --> 00:32:19,800 And those you can scale through that no man's land. 650 00:32:20,240 --> 00:32:23,920 Yeah, wow. And so there's a lot of these 651 00:32:23,920 --> 00:32:26,720 sort of very interesting unintuitive things, but I think 652 00:32:26,720 --> 00:32:29,840 the key punch lines are it's not the consumer at all. 653 00:32:30,360 --> 00:32:34,240 It's entirely about getting the businesses to go through the 654 00:32:34,240 --> 00:32:37,240 journey because the consumers, they're willing and good to go. 655 00:32:37,720 --> 00:32:42,360 Yeah, yeah. I kind of feel like most people 656 00:32:42,800 --> 00:32:45,960 would or will recycle. Yeah. 657 00:32:46,080 --> 00:32:49,880 Providing it's, you know, I think either easy, right? 658 00:32:49,880 --> 00:32:51,680 You know, it's easy. I mean, let's just be honest, 659 00:32:51,680 --> 00:32:54,600 everybody wants to make it easy. So if it's easy, then you know, 660 00:32:54,600 --> 00:32:56,760 then that's going to be something they'll do. 661 00:32:58,080 --> 00:33:01,920 I think more people would do it if there is more education. 662 00:33:02,200 --> 00:33:05,120 So they're more aware in certain communities. 663 00:33:05,520 --> 00:33:07,720 I think there are probably less interest. 664 00:33:07,720 --> 00:33:11,080 And I think some certain age groups of people are like left. 665 00:33:11,080 --> 00:33:14,480 I would have to say some of the older people in like baby 666 00:33:14,480 --> 00:33:16,960 boomers are probably like, ah, you know, whatever. 667 00:33:17,360 --> 00:33:20,400 But then, you know, GN Xers and Millennials, the GN ZS are 668 00:33:20,400 --> 00:33:22,120 really. Like God, it's the younger are 669 00:33:22,120 --> 00:33:24,560 indexing high because that they're the future of where the 670 00:33:24,560 --> 00:33:28,960 planets moving and it tends to be greater greater for kids that 671 00:33:28,960 --> 00:33:31,400 have grown up where climate change has been the thing their 672 00:33:31,400 --> 00:33:34,320 whole lives versus like you and I, you know, it wasn't a thing 673 00:33:34,320 --> 00:33:36,240 when we were born. Yeah, exactly. 674 00:33:36,240 --> 00:33:38,480 So they're, they're and they're putting their money where their 675 00:33:38,480 --> 00:33:41,480 mouth is on their value purchasing too, right. 676 00:33:41,520 --> 00:33:43,880 You know, they're, they're really doing that, which is 677 00:33:43,960 --> 00:33:45,120 good, which is cool. I mean. 678 00:33:45,600 --> 00:33:48,680 Look, I that that gives good optimism, you know, and I don't 679 00:33:48,680 --> 00:33:50,600 think it's rocket science to solve this stuff. 680 00:33:50,720 --> 00:33:51,880 It isn't. Yeah, yeah. 681 00:33:52,440 --> 00:33:57,800 You know, so I've been on Facebook a lot lately and I for 682 00:33:57,800 --> 00:34:01,080 some reason have got the right algorithm going on because. 683 00:34:01,240 --> 00:34:06,320 You're the right. And I see his terror cycles with 684 00:34:06,320 --> 00:34:10,960 this big IPO reggae going on. Let's dive into that talk about 685 00:34:10,960 --> 00:34:12,679 that. I think that's pretty exciting. 686 00:34:13,000 --> 00:34:16,159 And let's see, you know, maybe, maybe you'll entice a few 687 00:34:16,159 --> 00:34:18,159 listeners to invest. Yeah. 688 00:34:18,199 --> 00:34:20,080 Well, thank you. You know, absolutely. 689 00:34:20,080 --> 00:34:24,400 So first and foremost, you can learn all about everything that 690 00:34:24,400 --> 00:34:27,800 I'm going to describe in a moment at invest.terracycle.com. 691 00:34:28,159 --> 00:34:32,159 And we do file with the SEC now for gosh, five years our U.S. 692 00:34:32,159 --> 00:34:33,840 company. So all that financial 693 00:34:33,840 --> 00:34:36,639 information is posted on sec.gov. 694 00:34:36,679 --> 00:34:39,400 And I would really recommend if anything's interesting what I'm 695 00:34:39,400 --> 00:34:41,520 about to say, please, please download those filings. 696 00:34:41,520 --> 00:34:44,639 And you know, do you know your own review, but that we are in 697 00:34:44,639 --> 00:34:48,560 the middle of a major capital raise through what's called a 698 00:34:48,560 --> 00:34:52,760 Regulation CF and then later will be a Regulation A financing 699 00:34:52,760 --> 00:34:56,480 where basically folks can invest a minimum of $1000 and invest 700 00:34:56,480 --> 00:34:58,400 and own a part of Terrace Cycle US. 701 00:34:58,920 --> 00:35:01,440 And we did this the first time five years ago, actually very 702 00:35:01,440 --> 00:35:04,040 close to the time you and I chatted last, where we raised 703 00:35:04,040 --> 00:35:06,440 $19,000,000 into Terrace Cycle US. 704 00:35:06,440 --> 00:35:09,520 And what's nice is if you invested in that, in that time, 705 00:35:09,520 --> 00:35:11,760 you would have already gotten back I think somewhere between 706 00:35:11,760 --> 00:35:14,720 17 and 20% of your invested capital and dividends. 707 00:35:15,200 --> 00:35:17,920 And that capital allowed us to really grow the company which 708 00:35:17,920 --> 00:35:22,600 grew during that period, I think 75% in, in scale like quite, you 709 00:35:22,640 --> 00:35:25,000 know, quite a bit. We did that through doing 3 710 00:35:25,000 --> 00:35:28,000 really exciting acquisitions in the US, you know, looking at 711 00:35:28,000 --> 00:35:31,640 companies that do e-waste recycling or battery recycling, 712 00:35:31,640 --> 00:35:33,960 light bulb, these are these specialty recycling groups. 713 00:35:34,760 --> 00:35:37,280 And this is something that we're excited to do again. 714 00:35:37,280 --> 00:35:40,680 You know, we've been profitable for over a decade or we've seen 715 00:35:40,680 --> 00:35:43,120 really good growth. And at some point in time, we 716 00:35:43,120 --> 00:35:45,800 would love to get to a liquidity event like an IPO. 717 00:35:45,800 --> 00:35:48,560 And this is the like the right thing for us to do now to like, 718 00:35:48,600 --> 00:35:50,840 you know, really gear us up for some fast growth before 719 00:35:50,840 --> 00:35:52,560 something like that might, might occur. 720 00:35:53,040 --> 00:35:55,440 So we're really pumped about it. The, you know, investors the 721 00:35:55,440 --> 00:35:57,120 first time around, I think have done very well. 722 00:35:57,120 --> 00:35:59,360 A lot of those guys have reinvested in this round. 723 00:35:59,640 --> 00:36:02,640 And again, at invest.terracycle.com, there's 724 00:36:02,680 --> 00:36:06,000 all sorts of information, but I especially encourage folks to go 725 00:36:06,000 --> 00:36:09,560 to the SEC filings because there you get incredible transparency 726 00:36:09,560 --> 00:36:11,840 into the company's financials and its goals and so on. 727 00:36:12,560 --> 00:36:15,760 Yeah, no, that's great, Tom. And I like I said, I really like 728 00:36:15,760 --> 00:36:18,520 the ads that are out there and kind of how you're, you know, 729 00:36:19,040 --> 00:36:22,680 talk about changing the the mentality of recycling and, you 730 00:36:22,680 --> 00:36:26,200 know, recycling those difficult waste streams or those weird 731 00:36:26,200 --> 00:36:30,320 things that people don't think about, you know, and and I think 732 00:36:30,320 --> 00:36:32,280 you guys are tackling some challenging ones, which is 733 00:36:32,280 --> 00:36:34,000 really good. I mean, and, and I mean there 734 00:36:34,000 --> 00:36:38,160 are other companies doing similar or something at scale 735 00:36:39,000 --> 00:36:42,920 with a large, you know, investment in recycling plastics 736 00:36:42,920 --> 00:36:45,520 and things like that. But I think you guys are doing 737 00:36:45,520 --> 00:36:49,920 some really cool stuff there and so excited to see you guys get 738 00:36:49,920 --> 00:36:52,680 some investment revenue coming in. 739 00:36:53,120 --> 00:36:57,440 So how much longer is the IPO or the the reggae, you know, 740 00:36:57,440 --> 00:36:59,840 offering going to be open? For you guys for. 741 00:36:59,880 --> 00:37:02,320 Investors. Right now we are in what's 742 00:37:02,320 --> 00:37:05,000 called The Reg CF which comes before the reggae. 743 00:37:05,000 --> 00:37:08,320 That's for $5,000,000. We are as of today around I 744 00:37:08,320 --> 00:37:10,120 think just over 3,000,000 has come in. 745 00:37:10,360 --> 00:37:12,680 We expect that to close, you know, probably by end of this 746 00:37:12,680 --> 00:37:14,880 month. It's, it's really accelerating 747 00:37:14,880 --> 00:37:17,400 quite nicely. Then we go through the process 748 00:37:17,400 --> 00:37:21,200 with the SEC to approve the reggae and that would probably 749 00:37:21,400 --> 00:37:23,240 assuming approval though we got it last time. 750 00:37:23,240 --> 00:37:25,640 So I'm, you know, not too concerned, but assuming that 751 00:37:25,880 --> 00:37:28,480 goes live early next year and there we would raise potentially 752 00:37:28,480 --> 00:37:33,160 up to 75,000,000 during 2026. And this allows us because we 753 00:37:33,160 --> 00:37:35,320 don't have losses, it's not about plugging losses, it's 754 00:37:35,320 --> 00:37:38,600 about really increasing investment into organic growth 755 00:37:39,000 --> 00:37:41,880 and doing some really good strategic MNA as well. 756 00:37:41,880 --> 00:37:44,400 And so we're really pumped to be able to lean in on doing that. 757 00:37:44,400 --> 00:37:47,480 And you know, we should based on the CF be able to announce an 758 00:37:47,480 --> 00:37:49,440 acquisition early next year that we're working on. 759 00:37:49,800 --> 00:37:52,680 And then if we do the reggae, then do some even more bigger 760 00:37:52,680 --> 00:37:54,560 ones ideally. That'd be great. 761 00:37:54,560 --> 00:37:58,200 Well, you know, one of the little benefits for investors or 762 00:37:58,200 --> 00:38:02,040 potential investors who are considering right now is talk 763 00:38:02,040 --> 00:38:06,040 about this real quick is there's you could earn a 10% bonus. 764 00:38:06,400 --> 00:38:08,560 That's right. You know, let's get the 765 00:38:08,560 --> 00:38:10,040 enticements a little stronger here. 766 00:38:10,040 --> 00:38:13,240 The yeah, yeah, absolutely. So in when you go to 767 00:38:13,240 --> 00:38:16,960 invest.terracycle.com, you'll see there this idea of bonus 768 00:38:16,960 --> 00:38:18,880 shares. This is unique to this first 5 769 00:38:18,880 --> 00:38:20,280 million only. This is not going to be 770 00:38:20,280 --> 00:38:25,160 available in in the reggae and they're effectively depending on 771 00:38:25,160 --> 00:38:28,280 when you invest, you can get, I think if I'm not mistaken, up to 772 00:38:28,280 --> 00:38:31,320 25% extra share. So basically what that means is 773 00:38:31,320 --> 00:38:35,000 if you invest a dollar, it behaves as if you invested $1.25 774 00:38:35,000 --> 00:38:35,640 got. You. 775 00:38:36,160 --> 00:38:37,480 Yeah. So you just get more equity. 776 00:38:37,960 --> 00:38:40,640 And what's nice is, you know, every year, historically, we've 777 00:38:40,640 --> 00:38:42,880 paid out dividends. You know, so you get a dividend 778 00:38:42,880 --> 00:38:46,960 check from us and then the equity value grows as we get 779 00:38:46,960 --> 00:38:48,640 bigger. Well, that's great. 780 00:38:48,640 --> 00:38:51,240 I mean, I think you guys are going to do well with that. 781 00:38:51,240 --> 00:38:54,000 And for the audience listeners, I, you know, recommend you guys 782 00:38:54,000 --> 00:38:57,280 check it out and if it makes financial sense for you guys, 783 00:38:57,600 --> 00:39:00,360 jump in and I'm sure Tom and Terra Cycle would love to have 784 00:39:00,360 --> 00:39:02,080 you guys invest. We would, absolutely. 785 00:39:02,200 --> 00:39:04,840 You know, let's let's dive in if we could a little bit about some 786 00:39:04,840 --> 00:39:08,200 of your partnerships. I mean, you guys are a process, 787 00:39:08,200 --> 00:39:11,000 you process a lot of stuff, but you don't manufacture really 788 00:39:11,000 --> 00:39:14,680 anything that I know of and you don't really have a tremendous 789 00:39:14,680 --> 00:39:17,960 amount of assets in person. I mean, you got some, but I 790 00:39:17,960 --> 00:39:20,640 mean, talk about your partnership network. 791 00:39:20,640 --> 00:39:22,880 I mean, terror cycle success relies heavily on these 792 00:39:22,880 --> 00:39:25,920 partnerships with some of the world's largest consumer good 793 00:39:25,920 --> 00:39:29,200 companies, which is huge. And then also, you know, how do 794 00:39:29,200 --> 00:39:32,400 you navigate the tension between partnering with the major 795 00:39:32,400 --> 00:39:36,680 plastic producer and, you know, also advocating for waste 796 00:39:36,680 --> 00:39:40,000 reduction in circular design? You know, it's like, yeah, yeah, 797 00:39:40,000 --> 00:39:43,160 yeah, yeah, absolutely. So first and foremost, how does 798 00:39:43,160 --> 00:39:46,000 our model work, right? Like we are only dealing with 799 00:39:46,000 --> 00:39:48,440 things that are not locally recyclable, which are not 800 00:39:48,440 --> 00:39:51,680 locally recyclable, like a Gillette razor blade to a RIP 801 00:39:51,680 --> 00:39:54,880 curl wetsuit because it costs more to collect and recycle than 802 00:39:54,880 --> 00:39:57,600 the results are worth. So we need funding from a 803 00:39:57,600 --> 00:39:59,840 stakeholder to be able to offset those economics. 804 00:39:59,880 --> 00:40:01,600 And that could come from a producer. 805 00:40:01,680 --> 00:40:04,240 And we're very proud that we work with most major producers 806 00:40:04,240 --> 00:40:06,200 out there. You know, from your Nike shoes 807 00:40:06,200 --> 00:40:08,520 all the way to your Ferrero chocolates, right? 808 00:40:08,520 --> 00:40:10,360 And hundreds and hundreds in between. 809 00:40:10,360 --> 00:40:13,280 Over 40,000 clients. It could be retailers like your 810 00:40:13,280 --> 00:40:15,440 Walmart all the way to boutiques, you know, like 811 00:40:16,240 --> 00:40:18,000 Akhil's Boutique and so on and so forth. 812 00:40:18,840 --> 00:40:22,000 And we get funding to then be able to effectively make 813 00:40:22,000 --> 00:40:23,800 recycling for these objects work. 814 00:40:24,560 --> 00:40:26,240 That's the sort of business model, if you will. 815 00:40:26,240 --> 00:40:28,600 And the funding can come from, you know, these big producers, 816 00:40:28,600 --> 00:40:30,600 They could also come from direct consumer purchases. 817 00:40:30,600 --> 00:40:32,880 People can go to our website. We always recommend if you do go 818 00:40:32,880 --> 00:40:35,760 to terracycle.com, check out the free programs first that are 819 00:40:35,760 --> 00:40:38,720 paid for by these partners. And then if you still want to 820 00:40:38,720 --> 00:40:40,840 recycle something where there's not a free program, use one of 821 00:40:40,840 --> 00:40:43,400 our paid services where you effectively are picking up that 822 00:40:43,640 --> 00:40:45,040 that bill. That would be like our zero 823 00:40:45,040 --> 00:40:48,920 waste box division and so on. That solves the economics. 824 00:40:49,240 --> 00:40:52,880 Then our operations, you know, we have collection, sorting and 825 00:40:52,880 --> 00:40:55,720 processing and we own and operate about 25% of our supply 826 00:40:55,720 --> 00:40:59,040 chain and then we use different third parties for the other 75%. 827 00:40:59,760 --> 00:41:01,960 So for example, in logistics we own and operate a lot of our 828 00:41:01,960 --> 00:41:05,120 regulated waste logistics. You need a lot of permits and 829 00:41:05,200 --> 00:41:08,200 you know, and capability for that, while waste that doesn't 830 00:41:08,200 --> 00:41:10,560 require permits to move around, we use third parties. 831 00:41:11,200 --> 00:41:14,120 And in that process, what we do is we basically take the waste 832 00:41:14,120 --> 00:41:16,480 and we give a legal guarantee that we recycle everything, 833 00:41:16,480 --> 00:41:19,040 which is quite unique. And then from there, we find 834 00:41:19,120 --> 00:41:21,800 manufacturers who need these inputs to make their products. 835 00:41:21,800 --> 00:41:24,200 So it could be like chip bags turn into automotive parts or 836 00:41:24,760 --> 00:41:27,800 let's say baby food pouches turn into drainage pipes and things 837 00:41:27,800 --> 00:41:30,800 of that of that nature. What's really exciting to us 838 00:41:30,800 --> 00:41:33,240 though, and this goes back to the partners, is when the 839 00:41:33,240 --> 00:41:37,440 partners want to take that waste back into their ecosystem. 840 00:41:37,600 --> 00:41:40,800 And this would look like with Pilot pens, we've commercialized 841 00:41:40,800 --> 00:41:43,880 the world's first pen from used pens in our Japanese division or 842 00:41:43,880 --> 00:41:47,880 with ASIC shoes, they're for shoe made from used shoes and a 843 00:41:47,880 --> 00:41:49,800 ton of other examples. Like, we love it when the 844 00:41:49,800 --> 00:41:52,480 partners don't just want to see that object get recycled, like 845 00:41:52,480 --> 00:41:55,640 Asic's wanting to see shoes get recycled, but then say, how do I 846 00:41:55,880 --> 00:42:00,240 help make shoes from that recycled output to us, that's 847 00:42:00,240 --> 00:42:02,760 phenomenally exciting and starts doing what you were talking 848 00:42:02,760 --> 00:42:05,600 about earlier is keep these materials domestic, keep them in 849 00:42:05,600 --> 00:42:08,480 the supply chains. And then it also reduces the 850 00:42:08,480 --> 00:42:12,360 need to do new extraction, which is the number one cause of all 851 00:42:12,360 --> 00:42:15,440 environmental harm is extraction, farming, mining, 852 00:42:15,440 --> 00:42:18,160 those sort of things. Yeah, yeah, I know, absolutely. 853 00:42:18,200 --> 00:42:19,680 I mean that's, that's really good. 854 00:42:19,680 --> 00:42:21,600 Lots to go there. I mean, you know the your 855 00:42:21,600 --> 00:42:24,520 downstream partners too, I mean that you're partnering with I'm 856 00:42:24,520 --> 00:42:29,160 sure are are really important for you guys and you know, you 857 00:42:29,160 --> 00:42:32,360 probably have a handful of a handful hundreds of them 858 00:42:32,360 --> 00:42:35,240 probably across the country. You know that there that's a 859 00:42:35,400 --> 00:42:38,000 that's like the lifeline for a lot of your business, right? 860 00:42:38,400 --> 00:42:41,920 Yeah, Yeah, it's very important. The distinction though is we 861 00:42:41,920 --> 00:42:45,160 don't depend on certain raw material prices being hit. 862 00:42:45,200 --> 00:42:48,080 This is one of the really magic sauces in our business is almost 863 00:42:48,080 --> 00:42:50,640 all other recyclers need a material to be at a certain 864 00:42:50,640 --> 00:42:54,200 price to make the engine work because the key revenue is 865 00:42:54,200 --> 00:42:56,840 selling that material. So if you're a polypropylene 866 00:42:56,840 --> 00:43:01,600 recycler or APET recycler, you need polypropylene and PET to 867 00:43:01,600 --> 00:43:03,840 hit a price for your business to be profitable. 868 00:43:03,840 --> 00:43:05,240 When it goes up, it's even more profitable. 869 00:43:05,240 --> 00:43:07,520 And inversely, it's sort of like a drilling for oil. 870 00:43:07,520 --> 00:43:10,360 If you know the price per barrel goes down below a threshold, 871 00:43:10,600 --> 00:43:12,800 certain drilling activity doesn't make sense anymore. 872 00:43:13,200 --> 00:43:13,800 Yeah. Right. 873 00:43:13,800 --> 00:43:18,080 We are really different because the economics for us are not the 874 00:43:18,080 --> 00:43:19,920 key. The the economics of the output 875 00:43:19,920 --> 00:43:21,920 materials are not a key driver, right? 876 00:43:21,920 --> 00:43:25,480 They are a subsidy, but they are not really going to materially 877 00:43:25,480 --> 00:43:28,840 affect the price because for us these waste streams were never 878 00:43:28,840 --> 00:43:31,920 profitable to recycle. It never made economic sense to 879 00:43:31,920 --> 00:43:34,640 recycle a pen. And the value of the resulting 880 00:43:34,640 --> 00:43:38,120 pen plastic maybe affects the economics 10% one way or 881 00:43:38,120 --> 00:43:40,120 another. But it's not the material driver 882 00:43:40,400 --> 00:43:44,440 that allows us to to say we can sell the materials at whatever 883 00:43:44,440 --> 00:43:47,560 the market can absorb them at. So we don't have this issue of 884 00:43:47,840 --> 00:43:50,160 we got to wait till raw materials hit a certain value. 885 00:43:51,880 --> 00:43:54,960 That's really good. You know, technology has really 886 00:43:54,960 --> 00:43:58,760 advanced a lot in the past five years since we've spoken and not 887 00:43:58,760 --> 00:44:02,160 that it there wasn't already present then, but it seems like, 888 00:44:02,320 --> 00:44:05,400 you know, it's, you know, exponentially advanced. 889 00:44:05,720 --> 00:44:09,320 And since then, how's Terra Cycle investing in technology, 890 00:44:09,320 --> 00:44:12,720 especially around AI, data analytics, tracking systems, 891 00:44:12,760 --> 00:44:16,320 things like that to improve the material traceability you're, 892 00:44:16,440 --> 00:44:20,000 you know, optimizing recycling streams, providing more accurate 893 00:44:20,000 --> 00:44:23,280 ESG reporting for your partners. What are you guys doing in that 894 00:44:23,280 --> 00:44:24,920 space? How much you investing in that 895 00:44:24,920 --> 00:44:26,640 space? You know what's talk about that? 896 00:44:26,880 --> 00:44:28,200 Yeah, absolutely. Quite a bit. 897 00:44:28,200 --> 00:44:31,280 Not an AI to be fair, right. I mean we use AI as a tool, 898 00:44:31,280 --> 00:44:34,760 right, But it's not like, you know, a key operational 899 00:44:34,760 --> 00:44:36,960 investment area, but a lot of other areas. 900 00:44:36,960 --> 00:44:39,240 We just opened a multi $1,000,000 laboratory here in 901 00:44:39,240 --> 00:44:41,040 our Trent, New Jersey headquarters looking at 902 00:44:41,200 --> 00:44:44,920 mechanical and chemical recycling innovation as well as 903 00:44:44,920 --> 00:44:48,320 we use cleaning innovation. That's been a big one from the 904 00:44:48,320 --> 00:44:50,240 R&D center that's been a long time coming. 905 00:44:50,720 --> 00:44:54,920 We also put a lot of effort into track and trace where it's big 906 00:44:54,920 --> 00:44:57,840 investments in the third party auditing all the way to systems 907 00:44:57,840 --> 00:45:00,960 that we can trace the material all the way through our supply 908 00:45:00,960 --> 00:45:02,560 chain. This allows our brand partners 909 00:45:02,560 --> 00:45:06,360 to make legal claims around, you know recycling occurring and 910 00:45:06,360 --> 00:45:09,160 allows us to be able to make a guarantee that all waste we 911 00:45:09,160 --> 00:45:12,080 collect will be recycled. That's a really, really, really 912 00:45:12,080 --> 00:45:14,480 big one. Then where we invest quite a 913 00:45:14,480 --> 00:45:19,040 bit, like total investment of dollars is into new equipment 914 00:45:19,040 --> 00:45:22,480 for our processing partners. So we may not run a processing 915 00:45:22,480 --> 00:45:25,400 facility, but we'll come into a processing site and be like, 916 00:45:25,400 --> 00:45:28,400 hey, here's $1,000,000, you know, a line that you can then 917 00:45:28,400 --> 00:45:30,680 implement, attach it to your production and now you can 918 00:45:30,680 --> 00:45:33,520 recycle cigarette butts or now you can recycle cosmetic waste 919 00:45:33,520 --> 00:45:35,920 or whatever the waste stream may be. 920 00:45:35,920 --> 00:45:38,840 That's been probably fiscally by far the biggest area of 921 00:45:38,840 --> 00:45:42,640 investment for us is boosting the capability of processors by 922 00:45:42,640 --> 00:45:44,320 doing equipment investments into them. 923 00:45:45,840 --> 00:45:47,160 OK. I mean, that's great. 924 00:45:47,280 --> 00:45:48,040 That's good. I mean. 925 00:45:48,320 --> 00:45:50,640 The other thing too to note there is we believe that there's 926 00:45:50,640 --> 00:45:53,120 no silver bullet solution. So we, you know, many people 927 00:45:53,120 --> 00:45:55,760 have asked us like, hey, is it mechanical solutions or chemical 928 00:45:55,760 --> 00:45:58,040 solutions? We use both wherever they are 929 00:45:58,040 --> 00:46:00,720 the most prudent. And what we find is that what 930 00:46:00,720 --> 00:46:03,840 tends to come out, especially in complex waste streams is a lot 931 00:46:03,840 --> 00:46:06,480 of mechanical components and then maybe a chemical process 932 00:46:06,480 --> 00:46:09,840 here like a solvent process or a depolymerization process. 933 00:46:09,840 --> 00:46:13,000 They're mixed in with a lot of mechanical processes. 934 00:46:14,680 --> 00:46:17,840 So how, how are you helping these companies with their 935 00:46:17,840 --> 00:46:20,200 reporting of, you know, sustainability because that 936 00:46:20,200 --> 00:46:23,040 seems to be one of the things I think is maybe a, a 937 00:46:23,040 --> 00:46:27,680 differentiator and or you know, you know, it's added value to 938 00:46:27,720 --> 00:46:30,400 the whole business. This is a very important part, 939 00:46:30,400 --> 00:46:32,840 right. So in reporting what we can do 940 00:46:32,840 --> 00:46:36,000 is basically track in our recycling programs exactly how 941 00:46:36,000 --> 00:46:38,480 much of that waste stream was generated every location, you 942 00:46:38,480 --> 00:46:41,280 know, down to the day all the way through the supply chain. 943 00:46:41,280 --> 00:46:43,720 This allows folks the big part of reporting now in the US is 944 00:46:43,720 --> 00:46:47,040 compliance with EPR. And so we work the biggest PRO 945 00:46:47,040 --> 00:46:49,120 there is CAA. And so we work to be able to 946 00:46:49,120 --> 00:46:51,760 register the volumes of what these different companies 947 00:46:51,760 --> 00:46:54,560 collect and recycle that is subject to EPR so that they can 948 00:46:54,560 --> 00:46:58,960 really say, hey, we are, you know, voluntarily recycling this 949 00:46:58,960 --> 00:47:00,760 percent of our waste stream in this state. 950 00:47:01,040 --> 00:47:03,280 Here's how it's flowing through the whole system all the way to 951 00:47:03,320 --> 00:47:06,920 end market. Are there any big elephants 952 00:47:06,920 --> 00:47:10,760 still out there for EPR that companies haven't really jumped 953 00:47:10,760 --> 00:47:13,880 in on to establish? You know. 954 00:47:14,120 --> 00:47:18,200 Establish a recycling circular business to to manage that. 955 00:47:18,680 --> 00:47:21,600 I would say from a EPR in specific, EPR still embryonic, 956 00:47:21,600 --> 00:47:24,240 right, like where have we seen EPR come out in the US is 957 00:47:24,320 --> 00:47:27,040 regulated waste streams, you know, think paint, aerosols, 958 00:47:27,040 --> 00:47:30,160 batteries, you know, universal waste per SE there. 959 00:47:30,160 --> 00:47:32,160 It's been there for a long time because those are hazardous 960 00:47:32,160 --> 00:47:35,800 materials and a good industry is really popped up as you know to 961 00:47:35,800 --> 00:47:37,720 serve that. Where it's coming now is 962 00:47:37,720 --> 00:47:40,200 packaging and we're going to see that state by state. 963 00:47:40,560 --> 00:47:43,560 But what's left is all the product that's in that 964 00:47:43,560 --> 00:47:46,760 packaging, which all becomes waste 99% within the year of 965 00:47:46,760 --> 00:47:48,600 purchase. Yeah, yeah, right. 966 00:47:48,800 --> 00:47:52,320 And that you see in more EPR advanced countries like France 967 00:47:52,320 --> 00:47:54,680 coming already. But that's that's going to come, 968 00:47:54,680 --> 00:47:57,480 I think in the US over the next coming decades. 969 00:47:58,440 --> 00:48:02,080 OK, all right. Well, I mean, I've been watching 970 00:48:02,080 --> 00:48:05,280 another one company they they recycle tires. 971 00:48:05,320 --> 00:48:07,400 Yeah, called pre tread. I don't know if you've heard of 972 00:48:07,400 --> 00:48:10,840 them, but they're amazing firm. What they do is they do every 973 00:48:10,840 --> 00:48:14,040 they recycle every bit of the tire and then they make Rd. 974 00:48:14,040 --> 00:48:16,040 barriers out of it. That's really nice. 975 00:48:16,400 --> 00:48:17,320 That's. You know, instead of the 976 00:48:17,320 --> 00:48:18,960 concrete ones you see out there or the. 977 00:48:18,960 --> 00:48:21,760 Big, You know, with electric cars, tire waste goes up. 978 00:48:23,160 --> 00:48:25,680 Yeah, yeah, yeah, they're much heavier. 979 00:48:25,680 --> 00:48:28,400 So you're, you know, using up that rubber at a much faster 980 00:48:28,400 --> 00:48:29,480 pace. Yeah. 981 00:48:29,480 --> 00:48:32,040 So they, they've been, they've been solving that unique 982 00:48:32,200 --> 00:48:34,280 challenge and and doing a great job. 983 00:48:34,280 --> 00:48:37,880 And that company's called Pre Tread and yeah, I encourage you 984 00:48:37,880 --> 00:48:38,800 to check them out. They're pretty good. 985 00:48:38,800 --> 00:48:42,440 They're, I like them good business model, you know, the 986 00:48:42,440 --> 00:48:44,720 consumer role and behavior changes. 987 00:48:44,720 --> 00:48:48,040 Many sustainability solutions depend on this, like active 988 00:48:48,040 --> 00:48:50,720 consumer participation. But based on your experience, 989 00:48:50,720 --> 00:48:53,920 what strategies have you have proven most effective at 990 00:48:53,920 --> 00:48:58,040 motivating consumers engage in recycling and reuse? 991 00:48:58,040 --> 00:49:00,360 I mean, a lot like, I think we've been talking a little bit 992 00:49:00,360 --> 00:49:02,080 about it. It's the money like, like. 993 00:49:02,080 --> 00:49:05,320 Yep, Yep. If I'm going to pay, you know, 994 00:49:05,400 --> 00:49:08,480 go back to the old days when you put a deposit down for, you 995 00:49:08,480 --> 00:49:11,000 know, a six pack of Coke or 8 pack of Coke bottles, right? 996 00:49:11,000 --> 00:49:15,280 You know, is that really the big share it here or something else 997 00:49:15,280 --> 00:49:17,560 that we can do? I'll answer it for reuse because 998 00:49:17,560 --> 00:49:20,600 that's the, you know, the the area where people think there's 999 00:49:20,600 --> 00:49:23,360 the most behavior change. So the golden rule for us in 1000 00:49:23,360 --> 00:49:27,680 Loop is we need reuse behavior to behave like disposability. 1001 00:49:27,760 --> 00:49:29,680 We want it to feel like disposability. 1002 00:49:29,760 --> 00:49:32,800 In other words, have the person do the least amount of shift 1003 00:49:33,120 --> 00:49:34,200 possible. I think that's the most 1004 00:49:34,200 --> 00:49:37,160 important behavior. Shift is don't actually try to 1005 00:49:37,160 --> 00:49:38,920 go for shift if you can avoid it. 1006 00:49:39,280 --> 00:49:42,880 So everything we do and we use it to make it mimic A throwaway 1007 00:49:43,280 --> 00:49:45,640 sort of process. A good example is when you 1008 00:49:45,640 --> 00:49:50,080 return the loop bottles, we give you the option of a reusable 1009 00:49:50,080 --> 00:49:52,280 garbage bag. So you put in all the bottles 1010 00:49:52,280 --> 00:49:54,600 like a garbage bag and you just drop off the garbage bag and 1011 00:49:54,600 --> 00:49:57,680 people love that because it echoes the concept of waste. 1012 00:49:58,000 --> 00:50:01,320 So that's really important is to in behavior change, first go for 1013 00:50:01,320 --> 00:50:02,520 the least amount of behavior change. 1014 00:50:02,760 --> 00:50:05,520 Then what are the other vectors? It's three, you know, that 1015 00:50:05,520 --> 00:50:07,920 really drive behavior change. It's economic incentive. 1016 00:50:08,280 --> 00:50:10,680 You know, that would be like getting a deposit back in reuse. 1017 00:50:11,320 --> 00:50:13,840 It is fun. How do you smile? 1018 00:50:13,840 --> 00:50:16,160 How do you, you know, like like some of the examples we talked 1019 00:50:16,160 --> 00:50:19,040 about earlier, like create happiness and happiness can come 1020 00:50:19,040 --> 00:50:20,400 from fun. It can come from feeling 1021 00:50:20,400 --> 00:50:22,760 purposeful, doing the right thing, you know all that. 1022 00:50:23,000 --> 00:50:24,480 And that's a really important motivator. 1023 00:50:24,880 --> 00:50:26,920 And then the third is you got to communicate it. 1024 00:50:26,920 --> 00:50:30,360 People have to be aware and we use our biggest test for good 1025 00:50:30,360 --> 00:50:32,520 communication on packaging is the spouse test. 1026 00:50:32,720 --> 00:50:34,920 The spouse test is person A bought the thing and it's 1027 00:50:34,920 --> 00:50:37,640 totally aware of how it functions, but the last drop was 1028 00:50:37,640 --> 00:50:40,520 consumed by person B and they need to know what to do. 1029 00:50:40,760 --> 00:50:43,560 And that comes through in really good communication. 1030 00:50:44,000 --> 00:50:46,920 And it's those three things that really help create, you know, 1031 00:50:46,920 --> 00:50:48,680 the solutions. Don't ask for behavior change 1032 00:50:48,680 --> 00:50:50,640 and then motivate it with those 3 vectors. 1033 00:50:51,080 --> 00:50:52,320 Yeah, Yeah. That's good. 1034 00:50:52,320 --> 00:50:53,840 That's good. Yeah, I would agree. 1035 00:50:53,840 --> 00:50:57,560 And and that more education would be really be like we've 1036 00:50:57,560 --> 00:51:00,360 touched on it earlier, but the education seems to be the one 1037 00:51:00,360 --> 00:51:04,200 kind of I think I think we could easily do right. 1038 00:51:04,600 --> 00:51:07,240 Well, you know, Hey, Tom, thanks for coming on to the show. 1039 00:51:07,280 --> 00:51:10,680 I I've got one last questions. You look ahead at 20-30. 1040 00:51:11,480 --> 00:51:14,280 You know, what does the future for Terror Cycle look like for 1041 00:51:14,280 --> 00:51:15,960 you and Loop? We're really excited. 1042 00:51:15,960 --> 00:51:18,600 You know, we are seeing continuous growth by then you 1043 00:51:18,600 --> 00:51:22,400 know, we we hope to have hit our liquidity event and you know 1044 00:51:22,400 --> 00:51:25,600 we're getting there by investing in recycling, hard to recycle 1045 00:51:25,600 --> 00:51:28,520 materials, recycled content, especially reuse we think is a 1046 00:51:28,520 --> 00:51:30,920 huge game changer. And by 20-30, I think we'll be 1047 00:51:30,920 --> 00:51:34,720 even more mature. And yeah, for us, it's a very 1048 00:51:34,720 --> 00:51:37,560 exciting moment. And it's nice to see that 1049 00:51:37,560 --> 00:51:40,240 there's a lot of good tailwind all over the world, you know, 1050 00:51:40,240 --> 00:51:43,280 pushing these ideas forward. Yeah, even even though there's 1051 00:51:43,280 --> 00:51:46,520 been a little bit of a, you know, poo on, you know, climate 1052 00:51:46,520 --> 00:51:50,200 change. I think it's like it's a 1053 00:51:50,200 --> 00:51:52,600 reprieve, you know what I mean? I don't think anyone believes 1054 00:51:52,600 --> 00:51:53,920 that. Like we solve climate change. 1055 00:51:54,240 --> 00:51:55,040 Yeah. Yeah. 1056 00:51:55,040 --> 00:51:56,840 We're just taking a break from caring for a moment. 1057 00:51:57,200 --> 00:52:00,000 Yeah. But I think still there's a lot 1058 00:52:00,000 --> 00:52:02,800 of people in the business world that are still like, no, we're 1059 00:52:02,800 --> 00:52:05,240 doing this because it's, you know, it's, it's the right thing 1060 00:52:05,240 --> 00:52:06,760 to do, right? Exactly right. 1061 00:52:07,360 --> 00:52:12,040 So, well, hey, good luck to you and this, you know your, your 1062 00:52:12,040 --> 00:52:15,960 investment efforts there with the stock and investment. 1063 00:52:15,960 --> 00:52:18,480 I think it's going to be great. And thanks for coming on the 1064 00:52:18,480 --> 00:52:20,200 show. It's been great to talk with you 1065 00:52:20,200 --> 00:52:23,400 again and, and maybe highlight all the the great stuff you guys 1066 00:52:23,400 --> 00:52:25,760 are doing. And yeah, let's keep the 1067 00:52:25,760 --> 00:52:28,720 conversation going and we'll talk soon, OK? 1068 00:52:29,040 --> 00:52:30,480 We look forward to it. Thank you so much. 1069 00:52:30,720 --> 00:52:32,440 Thanks for listening and watching the show. 1070 00:52:32,640 --> 00:52:35,000 If you enjoyed the show then please share it with your 1071 00:52:35,000 --> 00:52:38,320 friends and coworkers on social media and tell somebody in 1072 00:52:38,320 --> 00:52:40,480 person. Thanks for being with us, ET 1073 00:52:40,520 --> 00:52:41,120 Nation.