Economy

Life Among the Eco-Capitalists: A Revolution Takes Hold in New Jersey

When you step into world of TerraCycle, leave all your old ideas about trash at the door.

Somewhere between California and Hawaii is a big plastic trash dump floating in the ocean. Twice the size of Texas, it's known as the "Pacific Trash Vortex."  

Spiral-shaped currents concentrate thousands of acres of non-biodegradable plastic waste. Birds and fish that get tangled up in the mass die with stomachs full of plastic. High-speed, high-tech modern life is not exactly working in sync with Mother Earth here. Maybe that's why the global ecosystem is on the verge of collapse.  

But don't get bummed out! The Pacific Trash Vortex is one of the many things that inspires Tom Szaky (pronounced "Zackie"). He's the scruffy 30-year-old CEO and founder of America's most kick-ass green company.

TerraCycle makes good-looking products out of garbage. It sells hip messenger bags made out of printed vinyl salvaged from billboards, with a neat seatbelt clasp. It keeps millions of nonrecyclable Oreo wrappers out of landfills by making them into 30,000 kites, which are then sold to Wal-Mart, of all places. Someone can do something with all that plastic. 

Melting and recycling plastic requires energy and produces a weaker material. TerraCycle instead thrives with the practice of "upcycling" -- cleaning and reusing stuff, like 20-ounce soda bottles.

When Szaky was developing his first product, a worm-feces-based plant food, the company was short on cash. So he rounded up the interns and hit the streets of Princeton, N.J. They collected bottles from curbside recycling to fill their first big order from HomeDepot.com.

Scaling up a couple of years later, the company has a diverse and ever-evolving product line, $7.2 million in revenue, strong annual growth and venture capital backing. Profitability is somewhere around the corner. Szaky's new book, Revolution in a Bottle (Portfolio/Penguin), came out last month, and a vivid, funny TV show, Garbage Moguls, just premiered on the National Geographic channel. 

When you step into the world of TerraCycle, you leave all your old ideas about trash at the door. Here, there is no waste. "Garbage" does not exist -- there are only opportunities to upcycle, i.e. rethink, reuse and then sell like a hustler.

"We're eco-capitalists, we make money selling garbage," Szaky says on Garbage Moguls. On the phone with AlterNet, he adds, "You can't feel bad about saving the world and making money." 

In the book, we read about "monstrous hybrids," products impossible to recycle because they are layered and fused, like the plastics and light aluminum in a Capri Sun juice pouch. TerraCycle can turn those pouches into sturdy pencil cases and book bags.

But what about all those protected corporate trademarks and brand logos? Well, TerraCycle gets sponsorship from Kraft foods, where the new vice president of sustainability agreed to slap a wrapper-gathering mail-in campaign on the back of every package. Szaky and Co., invented a new term for this: "branded waste." It's free advertising.

Szaky was born in Hungary, and he has that tenacious immigrant drive. Revolution in a Bottle gives the full back story on the worm-poop fertilizer that birthed the corporation.

The idea was organic: Szaky saw the way worm crap saved his favorite pot plant. He dropped out of Princeton, put all his chips on a "worm gin" contraption and began to produce a great fertilizer made out of tiny drops of wormy shit. The book gives a blow by blow: He scrapes a company together out of nothing. It's a trial by fire. It builds character. It reduces him to nothing. Oftentimes, Szaky is about to give up in exhaustion when a small investor pops up to save the day. Soon, Szaky refines his sales pitch. He begins to land 10,000 unit orders at big-box stores and scrambles to fulfill them.

"I may put the cart before the horse, but we always pull it off."  

Control-freak venture capital "brokers" constantly get in the way. One of them started a copycat worm-poop fertilizer business after Szaky walked away from a deal. The TerraCycle idea is good. Copycats are understandable. But those brokers didn't get it: the TerraCycle secret is not just that organic plant food in reused bottles makes an interesting product. TerraCycle's world-changing "open secret" is that we should use our society's voluminous multiple waste streams to produce fun, green products. Cheaply.

TerraCycle should give birth to a whole new industry. Szaky tells Alternet that he's surprised there aren't yet more serious competitors doing what they do. 

According to Szaky, most people want to support a recycled or green product. But only 5 percent of consumers are willing to pay a nickel more for one. We Americans love doing good, but we really love money. Instead of challenging that, Szaky has found a work-around. His "upcycling" eliminates a big part of the "costs of goods sold."

TerraCycle proves it's cheaper to clean used bottles than use new or recycled plastic bottles. So, TerraCycle plant food is not only organic and beating Miracle Gro in a battery of tests, the retail price is lower. On-the-street guerrilla market research of the "billboard bags" showed that folks were willing to pay $25-$35 for the hip, urbane pouches. What are the margins on a product that retails for $35 with no material costs? OfficeMax just ordered 10,000. 

In the book, we hear from Szaky's baby-boomer counterpart, Jeffrey Hollender at Seventh Generation, the recycled-paper products company.

Next to Szaky, Hollender sounds old. Hollender sniffs that his consumers are more than willing to pay more for recycled goods, and so he charges more. Hollender refuses to sell to Wal-Mart. But Szaky loves getting into all the big-box stores, and keeps his prices low.

TerraCycle makes the green revolution less expensive. Mainstream America learns to rethink waste just by picking up and checking out a TerraCycle billboard bag, kite or bottle of fertilizer. So, instead of just selling to the more well-off crowd at Whole Foods -- people, presumably, like Hollender -- Szaky sells to Wal-Mart consumers, and does it with gusto.  

In the book, he doesn't comment on Wal-Mart's unfair labor practices, of course, but big-box retail shows the mass scale to which TerraCycle aspires.

"Preaching to the choir is easy," explains Albe Zakes, the young company vice president, in his office in Trenton, N.J. "Reaching the Home Depot customer is hard. Just because you make $30K a year doesn't mean that you can't shop green." Often, editors at boutique magazines turn him down with the line, "we only cover green luxury items." Zakes is incredulous, "Green LUXURY items? That's an oxymoron!" 

TerraCycle upcycles all the time -- like when it needed to expand its factory, it grabbed a super-cheap, empty 250,000-square-foot facility in run-down Trenton. Yes, the gangs and the heroin and the "white flight" are real, but with a little bit of diplomacy, TerraCycle won over the locals.

Today, if you stroll through the factory, you find workers who chat amiably in small groups as they put labels on bottles and fill containers of fertilizer. Tanya Dave says she likes "the diversity" of the work -- it has her "always doing something different."

That said, the full truth about TerraCycle is that most of its manufacturing is outsourced. What TerraCycle has excelled at is not production, but design and sales inside a new green-business paradigm.

But here's what you don't get at all from their cool TV show: Yes, it is doing $7.2 million in sales, but not everything is made here, in this one cool factory. Another thing you can't help but notice on the factory floor is that the blue-collar workforce at TerraCycle is not made of employees with job security. The workers are temps from LaborReady.

Capitalism's effect on the Earth has been disasterous. The purer the capitalism, the worse the debacle: market fundamentalism and an unregulated finance sector wrecked the market economy. TerraCycle isn't interesting because it proves that the free market can fix the environmental crisis. TerraCycle is rather one of the most interesting ways that capitalism can destroy itself and then reinvent itself in the future.It is  a harbinger of industries to come.

In the TerraCycle office, the furniture looks like what you'd find in the dumpster at Princeton at the end of the spring semester (it was.) The paychecks come in reused envelopes from the newspaper company that used to occupy the factory. The company even believes in upcycling the graffiti art that bourgeois America thinks is trash: Terra throws parties with local graffiti writers who have decorated the factory with eye-popping glossy fluorescent murals. Last year, the graffitists were brought in to do custom artwork on a line of flower pots made from recycled plastic.

In modern life, garbage is everywhere. In nature, it doesn't exist. Capitalism is the tin man still looking for its heart. It had better listen to people like Tom Szaky and TerraCycle, fast. Szaky says companies need to become like trees. Trees take from the earth but give back in equal amounts. These days, too many companies are like fires out of control.

The company's new top-seller is a product in home décor: clocks made out of vinyl records. The company now makes organic drain cleaners, pet products and a fertilizer in a more concentrated, eco-friendly form. 

So, what's next for TerraCycle?

Last week, the company announced a deal that Szaky says is "much bigger" than anything else it has landed thus far. Mars, Inc., maker of Snickers, Wrigley's Gum, Skittles, etc., has committed to upcycleits  excess and used packaging with TerraCycle for all 20 of its leading brands. Szaky gushses that this will enable his company to go "completely global." The company is on track to bring in $12 million $15 million in revenue this year. 

"TerraCycle perpetually rides on the edge of billion-dollar success and bankruptcy," Szaky said last week on Garbage Moguls. It's almost like TerraCycle has greened up the 50 Cent motto and made its mantra "Change the world or die trying."

But you should personally cheer them on, because all of that plastic in the Pacific is putting toxic petroleum byproducts into your food, your fish, in your kitchen. This damaged world needs innovators like TerraCycle to thrive, before every last ice cap melts into an ocean full of plastic. 

Sander Hicks runs the Vox Pop/DKMC media machine and coffeehouse. He is publisher at the New York Megaphone newspaper and author of The Big Wedding: 9/11, The Whistle-Blowers, and the Cover-Up. He lives in Brooklyn.