TerraCycle CEO Tom Szaky: 'We're trying to make living a waste-free life more convenient'

Written by: Jo Gallacher | Published:
TerraCycle CEO Tom Szaky

Not many CEOs in the waste management industry can claim to have set up their own business while still at university, written three books, produced and starred in a reality show, delivered lectures at top universities and won a string of awards.

But for Tom Szaky, founder and CEO of TerraCycle, he’s only just begun.

When I meet the self-labelled ‘eco-capitalist’, he has just got off a plane from New York for an afternoon business meeting in London before he zips away on the Eurostar to Paris. Although he admits to not having been to sleep, Szaky is just as energetic and enthused as his company’s PR would have you believe.

And for good reason too, given TerraCycle made $23m in revenue last year collecting and repurposing complex waste streams such as nappies, used coffee capsules and laboratory waste. The company runs a series of innovative waste solutions, including offering Zero Waste Boxes that recycle hundreds of waste streams and running cigarette recycling programmes for major cities.

It has also partnered with major brands including L’oréal and Colgate-Palmolive to run free collection schemes where collected material is turned into a raw material and sold to manufacturers for new products.

Almost four billion pieces of pre- and post-consumer packaging have been collected to date, equating to $16m in donations to schools and non-profit organisations. TerraCycle also partnered with Procter & Gamble to produce the world’s first 100% recyclable shampoo bottle made with beach plastics and which is now sold throughout Europe.

Szaky’s success is all the more impressive when unpicking the complexities of his earlier life. Born in Budapest in 1982, his early years were heavily restricted by the Soviet iron curtain during the Cold War. At just four years old, instability following the Chernobyl accident allowed his family to migrate across Europe, hopping along Germany and Holland to eventually settle across the Atlantic in Canada.

He says: “I went down to the States for university, which is how I ended up in New Jersey, where I live now. What was really interesting to me was the progression from Communism over to the heartland of capitalism. I got to experience and really fall in love with this idea of entrepreneurship.”

Although Szaky’s eyes had now been opened to fresh ideas of markets, profit and industry, he was conscious of the practice in its current form. He says: “I thought it was amazing what business could do and how powerful it can be to change the world. But for me a big challenge was that when people were asked what the purpose of a business is, they’d say profit to shareholders. This was a problem for me because nowhere in that definition was there good or bad; it seemed that as long as it’s profitable, that’s OK.”

Fit for purpose

When Szaky set up TerraCycle, it was imperative the company would be a force for good. For him, purpose is everything. He says: “I created TerraCycle to create a social business whose purpose is to eliminate the idea of waste. We don’t view ourselves as waste management, because if you manage waste you’re never going to eliminate the idea of waste.”

The social entrepreneur disagrees with the presumption that purpose undermines profit. He adds: “I actually believe purpose fulfils and makes you more profitable, it does a lot of things which don’t show up on the balance sheet. It attracts amazing talent and enables access to leaders and organisations that a company my size wouldn’t have access to otherwise.”

TerraCycle now operates in 21 countries across the globe and runs three major business units to accomplish its goal of eliminating the idea of waste. In the UK, SUEZ owns 30% of TerraCycle, a huge compliment to a business which began life selling worm-poop as fertilizer in discarded plastic bottles.

Szaky has now set his sights on making the business more diverse. He says: “We have three business units: the first asks the question, ‘is this recyclable?’; the second is, ‘can it be made from waste?’, which is a totally different question; and the third is extending a product’s durability.”

He compares this to the Google model where although primarily known as a search engine, the brand offers a series of helpful services including translation, maps and email.

Given the ongoing condemnation of single-use plastics, there is arguably no better time to launch the durability wing of the business. This involves looking at frequent waste streams, such as plastic drinks straws, and how to replace them with more durable options such as stainless steel reusable ones.

“If we can make it as convenient, or more so, as disposability, it will win. I don’t think that people will sacrifice to do the right thing, it has to be applicable to them.

But the magic of durability is that not only does it make the economics better in the long run, but it also improves the experience for consumers,” he says.

Of particular interest is textiles. As a parent to two young children, Szaky is all too familiar with the disposability of children’s clothing, which is often worn just a handful of times, if at all, before being thrown away ready for the next size.

TerraCycle is now working on a way to change this through a reuse model, where parents pay a £20 deposit and £5 user fee for a certain size babygrow.

After the child has outgrown the clothing, parents are expected to send it back and receive the next size up in return. The model is therefore attempting to change consumers’ mentality towards fast fashion, produce garments that are made to last and encourage a growth of trust across the supply chain.

Anti-waste management

So does this mean TerraCycle is a company trying to get rid of its raw material? “We’re really an anti-waste management company,” Szaky says.

“Recycling is just a temporary measure until we accomplish that, and we’re trying to come up with models that make living a waste-free life more convenient and cheaper. Recycling is just a temporary measure until we can accomplish that and so we need to think about a way to get out of it.”

TerraCycle’s ‘anti-waste’ philosophy contrasts with any stereotypes currently held about the waste industry. Globally, its workforce is 75% female and the average age is 32 (Szaky is 36 years old). Its offices bring a Silicon Valley feel to the waste industry, with furniture made from waste products including old tyres.

So is world domination on the cards for TerraCycle? “Right now our model works best with developing countries; in wealthier countries, the more sceptical the consumer, the better by far it is for us. Current business models don’t yet function well in poorer, smaller countries because there aren’t the stakeholders. We would like to, I just need to figure out a way to do so.”

For the immediate future, Szaky has an ambitious yet achievable target of maintaining 20% organic growth for the company. TerraCycle’s new durability platform will begin to roll out next year, reaching London at the end of 2019.

He also has his eyes set on more mergers and acquisitions in speciality recycling following the success of TerraCycle’s purchase of electronic waste disposal company Air Cycle in January.

TerraCycle is proof that businesses with a purpose can not only be socially beneficial but also hugely financially successful. The brand has mastered the art of selling its positive morality in a world of growing consumer consciousness where people’s choices are beginning to align with their ethics. Waste management companies looking to set out their future agenda would do well to join in the fun.

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