Loop’s returnable model died in Canada—here’s why

Seven years ago, Tom Szaky convinced some of the world’s biggest corporations to invest in an old-fashioned milkman-style solution to reducing waste. The Princeton University dropout-turned-global leader in recycling initiatives introduced Loop — a company that would deliver everything from piping hot Tim Hortons coffee to Unilever soap and Häagen-Dazs to your door in reusable, returnable packaging. You could also buy the items at select grocery stores for a small deposit that you get back upon returning your packaging on your next trip. More than

100 brands signed on — investing at least $25 million US — including Canadian partners like Loblaw. At the time, chairman Galen Weston cited corporate responsibility as his motivation, saying in a 2021 news release, “there’s too much plastic waste in our environment. We are part of the problem and must be part of the solution.” Statistics support what Weston was saying. That same year, Canadians discarded about five million tonnes of plastic, only about nine per cent of which was recycled. But despite the

hype around Loop and those early investments, the pilot projects launched in North America, Japan and the U.K. in 2021 quietly shuttered. Only in France, which adopted reusable packaging regulations, did the concept flourish. As Loop keeps expanding in Europe — with products in 500 French stores and new pilots in the U.K. — could it ever work in Canada? And, if so, what would it take? Why it failed The timing seemed perfect: Loop’s inception in 2019 coincided with a regulatory push for corporate

stewardship, with bans on plastic bags and plastic straws cropping up across North America. There was intense scrutiny on packaging, and it became a symbol of a company’s commitment to the environment or lack thereof, said Lisa McTigue Pierce, executive editor of Packaging Digest in Chicago. “We were throwing away way too much and consumers wanted a change,” she said. “Then bam, [Szaky] is there with, not only an original idea, but [he] had fully thought it out.” Though there’s demand for sustainable options, that

doesn’t always translate into people paying for them — even if they say they will. It comes down to the “knowing-doing gap,” said Ravi Dhar, a Yale School of Management professor who specializes in consumer behaviour and branding. That gap refers to the discrepancy between how we want to act and how we actually do. Take, for example, a commitment to eat well. That might work at breakfast, Dhar said, but by the end of the day, you’re too tired to cook a healthy meal.

So, you order pizza. It’s the same with packaging. By the time someone reaches the grocery store, he said, they care about the price point, whether the packaging keeps food fresh and whether it’s easy to carry. “I think one of the things that we learned in the last five years [is that] CEOs have pretty much decided if you cannot monetize it, [they] don’t have the commitment.” CBC Radio’s What on Earth requested interviews with Procter & Gamble, PepsiCo, Nestlé, Loblaw, Tim Hortons and

other major brands that partnered with Loop. None agreed to speak on the record. Szaky, however, said they all gave him the same message: The demand didn’t translate into selling more products — and they couldn’t justify scaling up if it didn’t increase profitability. That attitude underscores the philosophical conflict between Loop’s business model and the traditional one where profit is seen as the only marker of success. “Profit is not the purpose of business, but an indicator of health,” he said. “If you’re profitable,

you’re going to flourish … and that would leave room for how [to] make the world better.” The French connection In France, Loop is flourishing. It works with more than 400 products that it offers in 500 grocery stores across the country, which Szaky said is largely feasible because of regulations to eliminate single-use plastics by 2040. Regulations within the French Anti-Waste and Circular Economy Law require medium and large retailers to dedicate at least 20 per cent of store space to bulk items or

those with reusable packaging by 2030, and the government has put subsidies in place to help with the transition. Loop’s success in France has increased exponentially as its offerings have expanded, Szaky said. When the company was only offering five products in a store, he said both sales and return rates were low. But once Loop hit 50 or so products per stores, sales jumped — and so did returns, from 15 to 80 per cent. It makes sense, he said, considering customers might be

more motivated to get a $5 deposit back than they might be to get 10 cents back for returning one reusable container. It was a lightbulb moment for Loop in France, Szaky said, and a lesson about the role convenience plays in future expansion. “Consumers want a big assortment, they want to be able to buy a lot of things,” Szaky said. Could it work in Canada? A worldwide shift to reusable packaging will only happen if other countries adopt France’s carrot-and-stick model, Szaky said

— something that does not appear to be on the legislative horizon in Canada. In an email to What on Earth, a spokesperson for Environment and Climate Change Canada wrote about broad efforts to encourage reuse and transition to a circular plastics economy, citing numerous investments “to spur the development of new technologies that address plastic waste and pollution.” There was no mention of regulations akin to those in France when asked whether Canada might consider similar legislation. Even if there were regulations, there are

logistical hurdles for a reusable system to be better for the environment in a country the size of Canada. Once you start adding up the energy used in distribution, transportation and cleaning, recycling may actually be the more energy-efficient option, said Myra Hird, an environmental studies professor at Queen’s University. “If the reusing is far, far away from the source, then reuse is actually worse than recycling — and it’s worse than landfilling,” Hird said. A better solution, she said, would be to reduce needless

consumption and the production of waste. Szaky, proudly sporting a sweater he’s worn into disrepair, agreed that reducing consumption would be ideal — but he is adamant that reuse is part of the solution. And he believes it will make a rebound in Canada. “It’s in our future,” he said. “We just have to be able to survive going from today to, you know, when that momentum really hits.”

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