For the past year, I’ve been dabbling with the Loop reusable, refillable container service created and operated by TerraCycle. It’s been an OK experience: During the height of the product shortages caused by the COVID-19 pandemic, I was even able to buy certain things that weren’t available on grocery store shelves, such as Clorox wipes.
But I still cringe at the size of the totes used to deliver and collect the products, which has kept me from being a more frequent customer. I also hate that I can’t simply bring empty containers to stores I’m already visiting (at least not yet).
For these reasons, I was intrigued to learn that Chilean startup Algramo, championing a very different sort of reusable model in impoverished neighborhoods across Santiago, is bringing that model to several neighborhoods in New York City, including a market on the lower east side of Manhattan, a building within the small-business hub at the Brooklyn Navy Yard and a 24-hour laundromat in Brooklyn.
What makes Algramo’s approach different from Loop is its very specific focus on addressing the "poverty tax" that urban families often pay on smaller packages — particularly single-use plastic sachets — because they can’t afford to buy "bulk" packages. According to the company, this "tax" can cost families up to 40 percent more money for everyday goods.
In Chile’s capital city, its distribution network has expanded to include more than 2,000 family-owned stores that reach more than 325,000 customers. Algramo’s model allows customers to buy as much or as little of staples such as detergent or rice as they want — its brand partners there include Unilever and Purina.
In the beginning, I was building against the brands. I realized that the real enemy was the packaging.
The company plans to test a different sort of model in New York — the amounts people can buy probably will be less flexible. Algramo co-founder and CEO Jose Manuel Moller Dominguez told me that the initial test neighborhoods were chosen because of the potential to reach a diverse community, both in terms of income levels and ethnicity.
What remains the same: Consumers won’t have to pay for the packaging over and over again. As Moller notes in the press release for the new service issued this week: "These pilots will be invaluable in proving the viability and superiority of refill models that eliminate the need for single-use packaging and address social and economic barriers to more sustainable options."
The touchless vending kiosks being placed in the New York locations initially will dispense cleaning products from Colgate-Palmolive, Clorox and EcoLogic Solutions, including Clorox Splash-less Cleaning Bleach, Pine-Sol Multi-Surface Cleaner, Softsoap Liquid Hand Soap and EcoLogic hand sanitizer.
These product categories were chosen intentionally, given lingering concerns over reusable packaging amid the pandemic and lingering shortages of certain cleaning and health supplies, according to Bridget Croke, managing director at Closed Loop Partners (Algramo’s lead investor) and an Algramo board member. "Consumer perception is something we’re going to test against," Croke said.
Algramo’s New York customers can buy refills by using special versions of the product containers that include an embedded chip linked to the customer’s account: The transactions are completed using a mobile app, but people can use another form of payment if they prefer.
I spoke with Emily Fong Mitchell, general manager for personal care North America at Colgate-Palmolive (one of Closed Loop Partners’ original investors), about what the consumer products giant hopes to learn via its participation. While it’s starting small with just one product, this is not a niche item: Colgate-Palmolive brands can be found in six out of 10 households worldwide, she said. Softsoap is the top brand in the U.S., found in 42 percent of households.
Among the factors her team plans to study include the demographic makeup of early adopters, as well as the times of day and locations that are most popular. It also will study pain points associated with the experience: Are the instructions clear? Is the process messy? What are the right sizes to offer? Is the transaction really contactless?
While Mitchell wouldn’t talk about pricing specifics, Colgate-Palmolive plans to use its existing package sizes for its Softsoap: a 32-ounce refill and a hand pump. "The concept is that [price] should be parity or a little cheaper on a per-ounce basis, after you refill," she said.
Where will Algramo head next? Moller is studying business model options, including franchises, that could help the company head for other cities in Chile and Latin America. It’s also studying markets in Indonesia and India. Additionally, Algramo is entertaining discussions with more consumer brands, especially those interested in eliminating single-use sachet packaging made from nonrecyclable or noncompostable materials.
"In the beginning, I was building against the brands," he told me. "I realized that the real enemy was the packaging."
This article was updated Aug. 26 to clarify Colgate's market penetration.