TerraCycle Inc. has joined forces with Kraft Foods to "upcycle" used wrappers from cookies, energy bars and drink pouches into purses, backpacks and umbrellas.

The partnership stands to divert millions of pounds of waste from landfills and provide a major coup for upstart TerraCycle, which made its name by transforming worm poop into fertilizer.

TerraCycle CEO Tom Szaky estimates upcycled projects will comprise as much as 30 percent of its 2008 projected revenue of $8 million, the Wall Street Journal Reported. The company predicts that percentage -- and total revenue -- to nearly double in 2009.

Kraft will fund the collection of the packaging waste through TerraCycle's brigades, which will donate between 2 cents and 5 cents per wrapper or drink pouch to participating schools and nonprofits.

Energy Bar wrappers will find new life in purses and backpacks. TerraCycle will fuse used Nabisco cookie wrappers into waterproof plastic sheets that will become umbrellas, shower curtains and placemats, among other items. The company will sew drink pouches into durable items such as handbags and tote bags.

TerraCycle's soda bottle brigade previously allowed the company to use recycled bottles as containers for its plant food made from worm waste.