Chilean company Algramo uses clever, reusable packaging to reduce plastic waste and save customers money.
Contributes to achieving the following UN Sustainable Development Goals:
We see it everywhere: plastic. It floats in the sea and is washed ashore on beaches. Even in the remotest places, far away from villages, cities and tourist hotspots. The boundless oceans spread abandoned ropes, nets and crates from fishermen to every corner of the globe. But we mainly see waste plastic that once belonged to a consumer. From bottles and flip-flops to dolls and cigarette lighters, the variety of what we have already come across is staggering.
Plastics are Forever
Sometimes it is hard to see what the plastic item once was, because it has been roaming around for years. Under the influence of sunlight and salt water it disintegrates into small pieces. After all, plastics don’t biodegrade, but stay around forever. The plastic chips get smaller and smaller, which makes them almost impossible to clean up. They irrevocably end up as micro plastics in the food chain. During our travels we regularly collect plastic waste or participate in local clean-up campaigns. Every little bit helps and these pieces of plastic can then no longer end up micro plastics.
Tackling the Problem at the Source
We realize that clean-ups will never solve the problem. Most plastic does not float. Researchers estimate that more than 90 percent of all ocean plastic sinks. That is why the problem must be tackled at the source. “Why don’t we just stop using plastic packaging that is only used once?” We wonder when we walk along the Rio Mapocho in Santiago. The banks of this river, which runs through the Chilean capital, are completely covered with plastic. A single rain shower could flush it all to the Pacific Ocean, which is never far away in elongated Chile. Fortunately, a young company found a clever solution here: Algramo.
Relieving Poverty and Fighting Pollution
In the outskirts of Santiago, we visit the Algramo warehouse, which also serves as their office. We meet manager Francisco Diaz. He shows us around and explains how Algramo got started. “In poor neighbourhoods, local stores sell many products in small packages. This not only costs a lot of packaging material, but also a lot of money compared to larger quantities. Packaging costs can be up to 20% of the selling price of a product. Our biodegradable detergents and cleaning products therefore come in larger packages, which are also reusable. There is a deposit on the containers so they are returned and reused. The cost benefit goes to the customer.”
In the back of the warehouse, an employee sorts returned containers. She checks if the packaging and labels are still good. Full pallets with reusable bottles are sent to a local factory for cleaning and refilling. “It would be a real shame to dispose of these plastic containers after they have been used only once. The quality is so good that on average they can last dozens of times. And at the end of their lifespan, the material can be recycled,” Francisco says.
Francisco explains about the Algramo detergents
Biodegradable detergent in a returnable container
A warehouse employee is sorting the returned containers
A Local Success
Curious to see how it works in practice, we go looking for one of the 1,600 neighbourhood stores where Algramo products are sold. Chile’s social inequality is clearly visible in the street. The ultramodern supermarkets with a large choice of products can only be found in the centre and wealthy neighbourhoods. In poor neighbourhoods, houses are shabby and small neighbourhood stores dominate the scene. We can imagine that the people here have to watch every peso when they shop.
We step into a minimarket and are surrounded by hundreds of pre-packaged products. Indeed, many of them are come in small sizes. When we point to a bottle of Algramo detergent, the lady behind the counter confirms that customers pay a deposit for the container. When they take the empty container back to the store, they can get the deposit back. “Customers typically exchange their empty container for a full one, so the deposit they get back is like a discount on a full bottle”, she explains. She collects the empty bottles in the storage room behind the counter and returns them with the next Algramo delivery. Her example shows that it really works: every container that is returned reduces plastic waste, while customers save money.
Modern downtown Santiago with the tallest building in South America
Wealthy neighbourhood in Santiago
Poor area in Santiago
A typical Santiago neighbourhood store
At the neighbourhood store
Algramo detergent in the neighbourhood store shelf
Returning the empty bottles using a deposit system is already a well established practice in the beverage industry
Francisco also invites us have a look at Algramo’s newest business model. It is a collaboration with Unilever to reduce plastic waste. To see it, we head to the recycling station in the upmarket neighbourhood of Las Condes. Cleverly positioned next to the entrance is a hip, electric tricycle. In charge of it is Algramo employee Diego Garcia. He explains: “The tricycle has two large tanks filled with the best-known Unilever brands of detergent and cleaning agent. On its side is a vending machine where customers can refill their empty containers themselves. The label has an RFID chip, just like the one your metro card. Put money on it and the container actually becomes valuable. You activate the refilling machine with your chip. On a screen, you choose how much detergent or cleaning product you want. Press ‘start’ and the container starts to be filled. On the screen you can see your new balance.”
Here too, customers save money. Refilling a container is cheaper than buying a new one in the supermarket. Although the concept is still very new, during our short visit several curious customers sign up enthusiastically. “On weekdays, we drive around the neighbourhood, so you can refill your containers even more easily”, Diego explains to convince new customers.
This innovative packaging method not only bypasses supermarkets, but also encourages customers to keep buying the same detergent and cleaning products. We wonder: Are we witnessing the revolutionary role that RFID chips will play in a new retail model? One where reusing packaging takes central stage?
The Algramo refilling tricycle is parked next to the municipal recycling station
Algramo’s mobile detergent refilling station
Topping up the balance on the RFID chip
The automatic refill system
Tanks with detergents in the back of the tricycle
Against the light the RFID chip in the label becomes clearly visible
Another enthusiastic new customer
Nature and Customers Profit
The beer and soft drink industries have long proven that deposit schemes to reuse packaging are both useful and feasible. Unique about Algramo’s approach is that they use new technology and reuse plastic packaging in a different sector: that of detergent and cleaning products. Mind you, the Chilean government does not impose a deposit on plastic containers. Still, Algramo found a business model which is based on the intrinsic value of plastic containers. Its result: less plastic waste potentially ending up in nature and cost savings for customers. After all, be it at the neighbourhood store or at the refill tricycle, the economic benefit of reusing the packaging is passed on to the customer. This, in turn, leads to increased customer loyalty and repeat purchases.
Algramo cleverly fights both social inequality and plastic pollution. Which company is next to adjust its packaging proactively without waiting for the legislator to impose a deposit scheme? And which customers will help to make these types of initiatives a success? There is no time to waste in the complex battle against plastic pollution, as we witness day after day during our travels.