Circular Supply Chains Need Intelligent and Distributed Manufacturer Networks
November 22, 2021
Gone are the fleeting days of component parts showing up just in time for production from an unknown combination of suppliers. After pioneering the just-in-time supply chain, Toyota responded to the Fukushima disaster by stockpiling critical components — such as semiconductor chips — with enough supply for months at a time. That was a decade ago.
Now, Toyota may be doing better than its competitors while a global chip shortage costs the automotive industry upwards of $110 billion in car sales. However, more industries are recognizing the limitations of a just-in-time strategy applied broadly to every component part and raw material across globalized supply chains.
As unforeseen disruptions increase — whether the COVID-19 pandemic or climate-related natural disasters — and as more products demand critical, limited resources, intense fluctuations in demand, labor shortages, inadequate equipment and physically damaged facilities contribute to an instability of manufacturing capacity. Underdeveloped manufacturing capacity leaves industries exposed to risk, price volatility, market dislocations and lost value.
Unfortunately, first-mile stakeholders in the supply chain are often most at risk of losing value in the face of disruptions. For example, demand for lumber sharply increased when homeowners sought to remodel and build new houses during the COVID-19 pandemic. Meanwhile, U.S. sawmills (largely Canadian-owned) had to shut down over 40 percent of their capacity during this same time period. Yet forestry growers — producing timber that becomes lumber — suffered in a buyer’s market and saw prices for timber remain low: When adjusted for inflation, timber prices are at their lowest over the past 50 years.
While the market has since recalibrated and the lumber bubble may be just one instance in which supply was ill-prepared to manage demand, the whole of today’s U.S. manufacturing is just 11 percent of GDP — near its lowest in over 70 years. Underdeveloped manufacturing capabilities from generations of regional specialization pose significant risk to meeting demand and climate goals. U.S. Secretary of Energy, Jennifer Granholm recently wrote: “We have weak domestic supply chains for technologies critical to our economic and national security… China is the only country with control over every tier of the supply chain for critical materials like the lithium we need for vehicle batteries, including 80 percent of raw material refining capacity… Other countries, especially China, produced 85 percent of transformers for our electric grid — while America still produces almost none.”
The automotive, energy and tech industries must contend with critical rare earth metal supply chains needed for everything from batteries to solar panels. These products are reliant on limited resources, often harmfully extracted from biodiverse regions fraught with social inequities. The ability to (re)manufacture and recycle these raw materials efficiently and locally is critical to business continuity in an increasingly resource-constrained world.
The time is now: Advances in automation and machine learning, rising pay globally and increasing risk from supply chain disruptions suggest that onshoring manufacturing is increasingly attractive to many product producers. Against this backdrop, what do resilient and circular supply chains look like? Supply chain managers are finding the right instances to:
- Create visibility into manufacturing supply chains to better prepare for and manage risk
- Produce with distributed, more regionally resilient supply networks
- Source feedstocks locally and from more available recycled content
Smart entrepreneurs are seizing the moment to build more resilient, circular supply chains. Partsimony, a company dedicated to building cognitive supply chains and increasing efficiencies, closed a $2 million seed round led by Closed Loop Partners’ Ventures Group with participation from Contour Ventures, Urban Us and other top institutional and angel investors. Partsimony applies machine learning to build a predictive and dynamic manufacturing market network, helping solve for the manufacturer discovery and price quoting process for complex hardware companies — which can be an opaque, manual and excel-based process today for both the hardware company and the manufacturer. Partsimony provides hardware companies with a better, real-time understanding of their manufacturers’ capabilities and pricing, helping them iterate and commercialize products faster and with increasingly distributed supply chains. Partsimony also supports the manufacturer by serving as a qualified lead generation platform to acquire customers whose products match technical capacity (production methods and volumes) and help manufacturers maximize margin.
Partsimony’s platform demonstrates how increased transparency and intelligence across supply chains can ultimately benefit business, people and the planet through three core activities:
Digitizing supplier relationships creates transparency
When supply chain disruptions happen, hardware companies need better control over their production and transparency into their suppliers to adapt quickly. Case in point: Toyota knew to safeguard its chip supply because of the company’s “no black box” approach, only adopting technologies it truly understands, down to the gases and the metals of each component. This supply chain visibility — down to the material level — is a critical driver of resiliency, and we invested in Partsimony because its platform helps enable this kind of visibility.
Distributed manufacturing supply chains shorten lead times
Adopting a distributed manufacturer network of on-shore manufacturing within existing off-shore manufacturing supply chain networks is increasingly becoming a competitive advantage. This is not about an America-first dogma; on-shoring of manufacturing helps regionalize the production for any supply chain. Doing so shortens lead times and helps diversify the supplier base. Distributed manufacturer networks are primarily about developing resilient and sustainable business practices, with the added benefit of reducing emissions associated with the international transportation of raw materials and finished component parts. Working with customers such as Stanley Black & Decker, Partsimony has demonstrated 96 percent cost reductions and 83 percent lead time reductions.
Data-driven recommendations can leverage engineering insights and incentivize use of recycled content
Design and material selection have an outsized impact on the circular impact of products. A poorly designed product may choose hard-to-recycle and fossil fuel-based materials in formats where the materials are intermingled and difficult to separate for recovery — a product William McDonough would call a “monstrous hybrid.” Now, Partsimony’s AI supports hardware companies in testing novel, more sustainable materials and alternative manufacturing methods in products from the very first point of design. Engineers upload their digital designs or CAD files to the platform, and Partsimony is building its AI to read the structural requirements of the component part and potentially recommend materials from recycled content, as well as alternative manufacturing solutions.
Digital visibility, distributed manufacturer networks and data-driven infrastructures are the circular antidotes to today’s analog and fragile supply chains. The COVID-19 pandemic is not the first black-swan event within this century, and it most certainly will not be the last. Climate-related disasters will continue to upset business-as-usual, just-in-time production and manufacturing. If we want to design more circular products with more socially equitable access, we must also capitalize on the supply chain disruptions in front of us to redesign our supply chain to be more resilient and more circular.
Originally published in GreenBiz
HomeBiogas Announces USD 94 Million Initial Public Offering, Expanding Global Clean Energy Solutions from Organic Waste
February 11, 2021
The company is poised to expand its household and community-size anaerobic digester systems into additional markets in North America and beyond, offering modular, affordable and local solutions to create value from organic waste on site
February 11 – HomeBiogas, an Israel-based company developing biogas systems that convert organic materials into renewable energy and fertilizer, successfully completed its initial public offering (IPO) in Israel, with a valuation of NIS 310 million after money, or approximately USD 94 million. The IPO was oversubscribed and HomeBiogas chose to raise approximately NIS 100 million which was received from the largest and leading institutional investors in the market, including provident funds, insurance companies and pension funds. Monday, February 1, was its first day trading.
HomeBiogas’ IPO reflects the growth in demand for more sustainable and local solutions, solving two major challenges: waste management and clean energy. Their household and community-size anaerobic digesters transform organic waste into clean energy and liquid fertilizer, saving on waste removal and energy costs. HomeBiogas also recently launched their BioToilet, offering a sanitation solution for communities without sewer infrastructure. Today, the company leads the establishment of an international standard for household biogas systems, holding international patents and European CE certificate, with stringent standards and safety requirements.
The continued growth of HomeBiogas comes at a critical time, in the midst of COVID-19 stay-at-home mandates that have shifted consumer habits and demands toward local alternatives that rely less on complex, often opaque global supply chains. With food waste continuing to mount around the world––worth roughly USD 680 billion in industrialized countries and USD 310 billion in developing countries––solutions that mitigate the loss of these valuable resources have become essential.
Since its founding, HomeBiogas has experienced consistent and extensive growth, selling over 10,000 systems in more than 100 countries in recent years. In the developing world, more than 3 billion people still use wood and charcoal for cooking, while 2.5 billion do not have access to toilets. HomeBiogas’ systems can transform their lives, creating a local closed loop system that generates value for years to come.
The recent IPO will accelerate HomeBiogas’ growth into additional markets, including North America, helping expand the solution at a larger scale into commercial operations in restaurants, hotels, universities, hospitals and others, generating significant savings in costs of organic waste removal, energy savings and a significant reduction in carbon footprint. Through the IPO, HomeBiogas also plans to increase production and sales in selected countries, through partnerships with local distributors. HomeBiogas’ founders Oshik Efrati (CEO), Erez Lantzer (CFO) and Yair Teller (CSO), continue to be engaged in the development, production and marketing of biogas systems for household and commercial markets. Leading circular economy investor Closed Loop Partners, global energy firm Engie and family office JS Capital are also major shareholders in HomeBiogas.
“HomeBiogas’ IPO is a market signal for the growth of local systems that circulate valuable resources, especially food and energy. By expanding its reach across the globe, HomeBiogas can create positive economic, social and environmental outcomes at scale, while maintaining deep roots in the local communities it serves,” says Ron Gonen, CEO of Closed Loop Partners. “We are proud to be a founding and longstanding investor in the company and continue to work closely with their team, and look forward to seeing the essential role HomeBiogas will play in advancing the circular economy.”
“This major step for HomeBiogas is also a milestone in the decentralized biogas from organic waste sector,” says Johann Boukhors, Managing Director of Engie New Ventures. “By maximizing the potential of local organic material in creating useful renewable energy for multiple types of customers, HomeBiogas bolsters the local infrastructure needed to participate in a more sustainable future built on clean, affordable, resilient energy.”
“The trust we received from the Israeli capital market, together with the rising demand for biogas systems in the world, proves how relevant and necessary our product is. Its growth rate and production efficiency allow us to deepen our entry into our target markets and increase the sales potential,” says Oshik Efrati, Founder and CEO of HomeBiogas. “I believe that the ability for any person or organization to produce energy from leftover organic waste is not far. This will reduce our dependence on fossil energy, as well as the environmental pollution and greenhouse gases resulting from the transportation and landfilling of waste. Countries and organizations are rapidly moving in this direction, both in legislation and investments. Combining our technology and knowledge with our powerful shareholders will allow us to be a leading player in the field.”
About HomeBiogas
HomeBiogas is a world leader in developing groundbreaking, simple to use biogas systems. Enabling people and businesses around the globe to turn their own organic waste into self-made clean energy, on-site. Since 2012, HomeBiogas has served thousands of households, farmers, businesses, underserved communities,and those seeking a more sustainable way of living with over 10,000 biogas systems in over 100 countries around the world. Our prefabricated, fully off-grid, patent-based systems offer modular options to suit each of our customer ‘s needs, empowering them to live a healthier, more efficient, self-resilient, and sustainable life.
About Closed Loop Partners
Closed Loop Partners is a New York-based investment firm comprised of venture capital, growth equity, private equity and project finance, as well as an innovation center focused on building the circular economy. The firm has built an ecosystem that connects entrepreneurs, industry experts, global consumer goods and technology companies, retailers, foundations, financial institutions and municipalities. Their investments align capitalism with positive social and environmental impact by reducing waste and greenhouse gas emissions via materials innovation, advanced recycling technologies, supply chain optimization and diversion of materials from landfills. Learn more at www.closedlooppartners.com.
About ENGIE New Ventures
ENGIE New Ventures (ENV) is the corporate venture arm of ENGIE, the global energy and services provider. ENGIE is committed to lead the energy revolution, towards a more decarbonized, decentralized and digitized world. ENV is a €180 million investment fund focused on making minority investments in innovative start-ups. Since 2014, ENV has deployed over €140 million of capital across 26 investments, in disruptive start-ups leading the energy transition and active in energy efficiency, renewable energy, energy storage and demand response, mobility and IoT. ENV’s offices are represented in Paris, San Francisco, Singapore and Tel Aviv. Please visit: www.engieventures.com.
Griin Raises $2M, Led by New York-Based Circular Economy Investor, Closed Loop Partners
December 09, 2020
This investment round reflects the opportunity for circular solutions that increase efficiencies, reduce costs, and protect the environment. The investment will provide the Israeli startup additional resources to continue innovation on its patent-pending system that integrates autonomous, rapid, and smoke-free roasting at the point of consumption. This shift is instrumental in eliminating both unnecessary international transportation of coffee beans to centralized roasting facilities and eliminating multilaminate packaging required to artificially preserve the freshness of previously roasted coffee. Griin is now entering its pilot stage in Israeli corporate offices of the world’s tech giants.
Griin, a pioneer in on-demand zero-pollution roasting, today announced it has secured $2M in Seed Round investment, led by Closed Loop Ventures Group, the early-stage investment arm of Closed Loop Partners. Griin’s countertop roasting solution is poised to change the commerce of coffee by bringing green coffee beans directly to the forefront of the trade and into the hands of the consumer, focusing on the workplace coffee segment. Doing so eliminates unnecessary international transportation of coffee beans to centralized roasting facilities and the multilaminate packaging required to artificially preserve the freshness of previously roasted coffee On demand roasting offers an elevated experience with a better quality for the most sustainable cup of coffee.
The investment by Closed Loop Partners, a leading circular economy-focused investment firm will enable the company to complete the initial rollout of the company’s roasting add-on appliance which fits on top of any bean-to-cup coffee machine. Griin’s appliance is powered by state-of-the-art proprietary volumetric roasting technology and orchestrated by deep-learning algorithms, ensuring a clean, rapid, and eco friendly solution. The compact desktop roaster is complemented by a supply of specialty coffee secured via griin’s direct sourcing operation.
“We are thrilled to partner with Closed Loop Partners for their resources, guidance, and many years in promoting the shift to a circular economy with their leading corporate partners including Starbucks, Nestlé and others. This funding round will allow us to release our first product to market in the enterprise high-tech market segment,” said griin CEO, Yuval Weisglass.
The office coffee market has seen incredible growth over the past five years. Vending Market Watch estimates a CAGR of 5.46% bringing the market to a whopping $19.31B by 2024. High-end bean-to-cup solutions comprise 50% of weight sales, while contributing to ~80% of the revenues. Griin is leading the on-demand roasting revolution alongside growing market demand for higher quality and sustainable office coffee solutions.
“Griin’s technology has immense potential for impact by vertically integrating the coffee roasting process at the point of consumption. Today, coffee supply chains are overly complex and inefficient, with a lot of landfill-bound packaging, culminating in high costs and a lower quality product for end-consumers,” says Ron Gonen, CEO of Closed Loop Partners. “Griin’s economy of green coffee beans increases efficiencies and streamlines processes, creating a higher quality, fresher product, while eliminating waste.”
Griin plans to continue to work on R&D projects and pilots with enterprise high-tech companies and will expand its market to additional territories, including US, Europe, and Australia.
About griin
griin is a deep-tech startup pioneering an innovative coffee roasting solution. griin’s proprietary, patent-pending technology uses volumetric heating to roast green coffee beans, enabling an optimal technique for non-industrial coffee roasting with the highest quality of fresh coffee for consumers.
At scale, this solution has the potential to decentralize the coffee supply chain, leading to a more balanced profit share for coffee producers and resellers, while dramatically improving various aspects of sustainability. The Israel based company was founded by three experienced entrepreneurs with the vision of disrupting the coffee market by providing an innovative roasting solution, focusing initially on the office/workplace segment. Learn more at https://www.griin.tech.
About Closed Loop Partners
Closed Loop Partners is a New York-based investment firm comprised of venture capital, growth equity, private equity, project finance, and an innovation center focused on building the circular economy. Investors include many of the world’s largest consumer goods companies and family offices interested in investments that provide strong financial returns and tangible social impact. Learn more at www.closedlooppartners.com.
Algramo Introduces State-of-the-Art Refill Model to Deliver Affordable Cleaning Product Without Waste in New York City
August 25, 2020
In partnership with small business owners, Algramo gives consumers a better way to refill cleaning products from leading global brands through a cost effective, smart dispensing system
New York, August 25 – Today, Algramo — a Chile-based startup solving economic and environmental issues through its vending machines that dispense staple products such as household cleaners “by the gram” — launched its first United States based refill vending machine pilots in multiple locations across New York City. The pilots represent the first exciting step in Algramo’s expansion into North America, and will provide invaluable insights to accelerate the next generation of modern, convenient, and cost conscious refill systems that advance the future of retail.
In a natural resource constrained world, reusing valuable packaging materials is a critical part of building a more circular economy. Smart reusable packaging can help minimize the amount of waste left behind from single-use plastic packaging in landfills and oceans. At the same time, Algramo’s refill system allows customers to purchase cleaning products at an affordable price. Algramo not only makes the sustainable option the cheaper option, but also the more equitable and convenient option.
The various Algramo refill systems, which activate this week, will dispense cleaning products including, Clorox Splash-less Cleaning Bleach* and Pine-Sol Multi-Surface Cleaner*, Softsoap Liquid Hand Soap from Colgate-Palmolive Company, and hand sanitizer from EcoLogic Solutions in the pilots taking place at Essex Market in the Lower East Side of Manhattan, Building 77 at the Brooklyn Navy Yard and The Laundry in BK with a goal of growing throughout the city and beyond. Harnessing the power of digital technology, Algramo’s smart refill system will incentivize reuse, improve operations, and strengthen customer relationships and the community. Their low-contact system meets rigorous health and safety standards, minimizing the various touch points between customers and their purchasing of a product and getting it home.
Customer experience, cost competitiveness, ease of integration at small businesses, and measurable impact on waste reduction will all be key priorities tested in these pilots. The aim is to ensure that this business model is applied in a way that works for busy New Yorkers. Accelerating systems change is not easy and paving the way forward for scalable “refill on the go” models requires continuous testing and honing of solutions. These pilots are a critical part of the learning process, building on successes thus far and advancing developments for the system as a whole.
“These pilots will be invaluable in proving the viability and superiority of refill models that eliminate the need for single-use plastic packaging and address social and economic barriers to more sustainable options,” says José Manuel Moller, CEO and Founder of Algramo.
Closed Loop Partners, the lead investor in Algramo and a pioneer of circular economy focused investments, is bringing Algramo to the United States. “Algramo is on the forefront of a new retail experience; their tech-enabled refill system optimizes the customer experience and meets the growing demand from customers for convenient, accessible and waste-free solutions. We are seeing a lot of market demand for this solution,” says Bridget Croke, Managing Director at Closed Loop Partners and Algramo Board Member.
Founded in 2012, Algramo began in Chile and already operates in over 2,000 family owned stores that reach over 325,000 end-customers in Santiago de Chile. This year, Algramo expanded to the U.S. and was selected to join Newlab’s Circular City Studio that empowers urban tech startups to help make New York more equitable, livable, and resilient.
“Colgate-Palmolive has committed to eliminate plastic waste by designing and delivering circular and alternative solutions for our products,” says Emily Fong Mitchell, General Manager, Personal Care North America, Colgate-Palmolive. “We are excited to partner with Algramo on this pilot as we work to achieve our ambition.”
“EcoLogic is proud to partner with Algramo and its synergistic mission of working towards a more sustainable future. We are thrilled to be working with Algramo’s modern and convenient reuse model to reduce our impact,“ says Anselm Doering, the CEO of EcoLogic.
*These products are not EPA registered
About Algramo
Algramo came into existence to solve a problem impacting millions of low-resource families: the poverty tax. This market failure occurs when low-resource families buy products in small formats and pay up to 40% more for products. Algramo solves the poverty tax with a reusable packaging distribution system that enables families to buy the exact quantity of products they need at bulk prices. Algramo is honored to bring together brands, retailers and packaging producers to work towards catalyzing reusable packaging on a globally significant scale to keep packaging in the economy and out of the environment. Learn more here.
About Closed Loop Partners
Closed Loop Partners is a New York based investment firm comprised of venture capital, growth equity, private equity, project finance and an innovation center focused on building the circular economy. Investors include many of the world’s largest consumer goods companies and family offices interested in investments that provide strong financial returns and tangible social impact. Learn more here.
4 Key Drivers Accelerating Resilient and Circular Supply Chains
May 13, 2020
COVID-19 has disrupted inertia around the existing linear system, forcing a re-evaluation of the status quo and highlighting the risks of opaque and global supply chains. The timeframe of transformation is unprecedented, happening in months rather than years. The current circumstances emphasize the need for a transition to a more resilient circular economy. This sentiment was echoed in our webinar this month on Trends in Circular Innovations for Resilient Supply Chains.
Panelists from seemingly unrelated fields: fashion, recycling/technology, and logistics identified four themes that resonate across industries, build resiliency to system shocks, like COVID-19, and propel the circular economy forward: transparency, localization, digitization and automation.
Fast Tracking Transparency
The movement towards a circular economy cannot be accomplished by one actor, one company, or even one industry. Therefore, transparency and collaboration are essential. This means data sharing within and across industries and thoughtful collaborations.
Opaque supply chains prohibit stakeholders from understanding where, how and when ingredients or products are sourced, in transit, at a store or where they go after use. Identifying these gaps creates opportunities to reduce waste and increase efficiencies; all foundational elements of a circular economy.
Ocean freight shipping is a USD 115 billion industry with significant environmental impacts. Reports note that shipping accounts for about 3.1% of the world’s greenhouse gas emissions annually. Our portfolio company, TradeLanes, is transforming the industry that operates behind the scenes to supply many of our products. They are enhancing transparency by providing an online platform that addresses inefficiencies, digitizing and managing trade execution for bulk shipping of commodities (e.g., meats, grains, paper, plastics).
By digitizing the process, TradeLanes enables greater transparency. Parties are able to ensure timely negotiations, delivery and tracking of products. This reduces unnecessary wastage from mismanaged or spoiled goods and reduces error rates for clients. For exporters still reliant on outdated paper filing systems (a shockingly large proportion of the industry today), COVID-19 is shining a spotlight on how a lack of transparency creates industry-wide problems as critical shipments are delayed, poorly routed or lost amidst the chaos. TradeLanes is just one example of an innovator disrupting an industry through increased transparency in a complex multi-stakeholder process.
From Global to Local
As global supply chains are disrupted and industries experience supply shortages as a result of COVID-19, localization becomes increasingly attractive. By bringing production closer to end markets, supply chains can be more resilient to system shocks. Much like the eat local movement, companies are looking to source, manufacture and produce closer to market. An ancillary benefit includes a reduced product carbon footprint. With mounting pressures for greater ESG disclosures from investors, corporates and the public, among others, more companies are recognizing that localizing their supply chains has multifold benefits.
In the United States, the world’s largest apparel market, 97% of clothing is made abroad. The path of one cotton t-shirt may be thousands of miles, with the cotton grown in India, milled in Mexico and sewn in South Africa. As awareness grows around the carbon footprint and resource intensity of the industry there is a growing movement to lessen the miles traveled. Our portfolio company, The Renewal Workshop, discussed how localization is built into their business model. Their team helps brands repair and resell clothing, keeping materials that would otherwise be landfilled in play. The Renewal Workshop showcased its agile business model as it was able to quickly source local materials and pivot to respond to the demand for gowns and other personal protective equipment during the pandemic. The team is distributing gowns to hospitals in their home state of Oregon, while continuing to provide repair services for their brand partners.
Automating for Efficiencies
Like other themes enabling the circular economy, automation plays an essential role in creating change. AMP Robotics CEO, Mantanya Horowitz, discusses how his company’s AI and robotics system improves the efficiency of materials recovery facilities (MRF). Their robotics system is rapidly learning to identify material types and “picking” them off the conveyor belts. With the adoption of automated recycling systems, facilities increase the accuracy and purity of sorted recyclables, and thereby improve the economics of the industry. Furthermore, when system shocks like COVID-19 span industries and require immediate change, like social distancing, robots give businesses the flexibility to adapt and reorient to new circumstances; in doing so, ensuring their employees health and safety. Automation can also enable staff to dedicate time to the most pressing responsibilities.
Doubling Down on Digital
Transparency, localization and automation could not be possible without the digitization of systems. Digitization closes the gaps in systems by providing accurate and real-time data on the location, availability and condition of materials. With unwavering agreement, our panelists remarked on how systems devoid of digitization are likely to lag in a transition to the circular economy.
As COVID-19 brings the world economy to a sudden and grinding halt, it highlights the existing pain points in our current system. There is no better time to reflect on the fragility of the linear model. Resiliency lies with a transition to the circular economy, an economy that is transparent, local, automated and digital.
Closed Loop Partners Invests in Algramo to Advance Affordable, Reusable Packaging Systems
Already in partnership with brands like Unilever, Algramo’s smart packaging reimagines the future of grocery shopping while eliminating single-use plastic packaging waste.
Contact: [email protected]
October 14 – Closed Loop Partners, a New York based investment firm focused on building the circular economy, announced today its investment in Algramo through its venture capital fund, Closed Loop Ventures (CLV).
Founded in 2012, Algramo is a Chilean based startup solving economic and environmental issues through its vending machines that dispense staple products, like household cleaners and grains “by the gram” to customers.
Jose “Cote” Manuel Moller, Founder and CEO of Algramo, saw first-hand in Santiago, Chile, how those living in low income neighborhoods were penalized by an effective 40% “poverty tax” for purchasing smaller packaged consumer products, unable to afford larger-format products.
“By creating low-cost reusable packaging and reducing the cost of distribution through our vending machines and dispenser system, we dramatically cut costs for customers and allow them to purchase small quantities of products at an affordable price. This benefits brands too who want to sell product, not packaging. Our system easily integrates into local bodegas, large grocery store chains, and can be delivered to a customer’s home through our mobile delivery app.”
Cote, Founder and CEO of Algramo
Awareness around the negative impacts of single-use packaging on human health and the environment is growing too. Packaging is ending up where it shouldn’t; in landfills, our oceans, or even as a contaminant in the recycling system.
“Reusable models like Algramo’s are an important and necessary step in the reduction of single-use plastic packaging. Algramo is a leading innovator showcasing a circular solution to a global waste issue by ensuring that valuable materials are kept in play for multiple uses.”
Danielle Joseph, Executive Director at Closed Loop Partners
Algramo’s smart packaging, equipped with RFID chips, also encourages and accelerates positive consumer behavior change so that individuals can easily and conveniently embrace a reuse revolution. Each time a customer refills their existing container or bottle with product, they earn credit that can be applied to future purchases, equating to an 11.5% discount on their next liter of detergent for example; the more the packaging is used, the more value it accrues.
Algramo already operates in over 2,000 family owned stores that reach over 325,000 end-customers in Santiago de Chile. Their business model has attracted the attention of a number of large brands, including Unilever, which is currently partnering with Algramo to pilot a mobile dispensing system that uses electric tricycles to deliver products to people’s homes via an app. Algramo was selected as a winner of the MIT SOLVE Circular Economy challenge. Algramo is now looking to expand their operations into the U.S. and beyond.
Closed Loop Ventures is leading Algramo’s Series A round. CLV makes early-stage equity investments in sustainable consumer goods companies, advanced recycling technologies, and services related to the circular economy – reducing waste or closing the loop on various materials. To date, CLV has invested in 18 companies spanning a number of sectors: recycling, textiles and apparel, and food and agriculture.
About Closed Loop Partners
Closed Loop Partners is an investment platform that invests in sustainable consumer goods, recycling and the development of the circular economy. Investors include many of the world’s largest consumer goods companies and family offices interested in investments that provide strong financial returns and tangible social impact. Learn more at www.closedlooppartners.com.
About Algramo
Algramo came into existence to solve a problem impacting millions of low-resource families: the poverty tax. This market failure occurs when low-resource families buy products in small formats and pay up to 50% more for products. Algramo solves the poverty tax with a reusable packaging distribution system that enables families to buy the exact quantity of products they need with bulk prices. Algramo is honored to bring together brands, retailers and packaging producers to work towards catalyzing reusable packaging on a globally significant scale to keep packaging in the economy and out of the environment.
LOLIWARE: The Seaweed Straw of the Future
We caught up with Chelsea Briganti, founder and CEO of LOLIWARE, while onboard the National Geographic’s ship, SeaBird, for the first week of the Sustainable Ocean Alliance’s (SOA) Accelerator at Sea this September. LOLIWARE was part of the inaugural cohort of SOA’s ocean-tech focused accelerator in 2018.
Chelsea Briganti, Founder & CEO of Loliware
LOLIWARE is a Closed Loop Ventures’ portfolio company that is pioneering biomaterials derived from seaweed to replace plastics; healing the planet by making single-use plastics obsolete.
Born in Hawaii, Chelsea grew up feeling a strong connection to the ocean, where she was baptized, nourished, and calmed by the waves throughout her childhood. This, along with her industrial design background and desire to use her skills to create a better planet, have helped propel LOLIWARE forward. The company is now working with several Fortune 500 companies and partnering with Marriott and Pernod Ricard to disseminate millions of plastic-free straws.
We sat down with Chelsea to catch up on the latest news. This interview has been condensed and edited for clarity.
With the help of a team of material scientists, food technologists, seaweed biologists, and biopolymerists, LOLIWARE wants to replace the 360 billion plastic straws used globally every year. How far along on this journey are you?
We’re currently underway with a massive scaling effort. This is where most startups completely drop the ball. They have a great idea, it could be world-changing, but they struggle to take it from the lab to mass scale.
Fortunately, I learned a lot from our initial work at LOLIWARE on the cup. We were creating a cup that you could eat rather than throw away. It was an interesting idea and helped put us on the map, but we dropped the ball on the manufacturing side. I learned that LOLIWARE’s strength and core competency, our real sizzle as a company, is our material technology and innovation pipeline, it’s not that we’re manufacturing geniuses.
What we are is a leading materials innovation technology company. This means that we continue to pioneer biomaterials derived from seaweed to replace plastics at scale. We’re doing this by inventing new materials and inventing the process to scale these new materials. We can then take these two blueprints to a plastic manufacturer, for example, and license them. Plastic manufacturers will be dinosaurs unless they evolve with current regulatory and market forces. There are tons of bans on plastics and millennials don’t want plastic anymore. We’re pitching a new technology to help manufacturers evolve with the times.
LOLIWARE’s straw feels just like a traditional plastic straw, but it’s 100% plant-based, hyper-compostable, and marine degradable. What’s the significance of seaweed in your mission to heal the ocean?
The reason seaweed is so special is because it sequesters carbon as it grows and has a fast, renewable lifecycle of four to six weeks. What comprises the seaweed is cellulose, naturally occurring polymers, and proteins. All of these represent opportunity. They can be used for other packaging innovations, for example, you can create a SeaPulp™ by extracting cellulose from seaweed. This can be formed into any shape, with the added benefit of avoiding any health issues associated to PFAs.
When you look at our competition, the only consequential one is paper. You’ve got tons of fiber companies on the scene and China has said that their solution to plastic is paper. But, you’re going to start seeing backlash against paper. In some cases, paper has a worse carbon footprint than plastic because of its inputs: Trees have a long lifecycle and often you have to transport them thousands of miles for processing. We are tree-free and rainforest-free, believing that these precious carbon sinks should remain intact versus be used for packaging.
Seaweed is definitely part of the future of replacing plastic. All of our seaweed is sustainably sourced. Our supplier in Europe harvests it in accordance with strict regulations. Right now, less than 1% of it is harvested and, in turn, LOLIWARE only uses a fraction of that.
LOLIWARE has already built a strong and recognizable brand, appealing to consumers who want to avoid plastics, toxins, and GMO products, among other things. How important has branding been for growth?
You have to have a killer technology, but you also have to have a killer brand, especially given the current climate. I got a lot of push back from early-on investors in LOLIWARE. They felt like we were wasting time, asking “Why do you even have a social media presence?” But I always knew they were wrong. We’re B2B2C and we’re a movement to go plastic-free. We’re also a technology to replace plastic. Both of these things come together. That’s the secret sauce. There is no brand of paper straws or corn-based plastics that people identify with, yet people connect with LOLIWARE. It’s important to be clever, to be fun, and to have beauty in sustainability when it comes to branding.
We also really focus on being a women-empowered brand. For the longest time, women’s inventions have been sitting on the sideline – underfunded and underdeveloped. Yet, women have a lot of buying power and care about sustainability. Now is the time to rally them. We need more women in leadership to solve the problems of the ocean and the planet.
And lastly, we can’t ignore the incredible natural environment we’re in right now as we head toward Sitca, Alaska. How do natural backdrops like this help to inspire your work?
When you’re an entrepreneur you can easily sequester yourself in the office and become hermetic. For me, I’m inspired by nature’s vast expanse. I love how Charles Eisenstein expresses the importance of being in places where the dream of the planet still lives. You definitely feel that here. It’s the dream of the planet, a pristine natural environment. You get the visceral sense that you are on the planet versus in a manmade landscape like New York City. Too often we’re in landscapes where everything is made by us and we can quickly become disconnected from the natural world. It’s important to be able to take the mental image of the dream of the planet back to your work. It’s what we’re trying to protect or even recreate in places where the dream of the planet is dead or dying.