Single-use plastic packaging makes up a large amount of the world’s waste, but so far no one has found a good way to replace it that is also easy for consumers and cost-effective. Algramo It may have broken this nut with a combination of reusable containers and money-saving distribution points, and it is poised to expand its footprint in a big way with a new $ 8.5 million funding round.
Founded in Chile nearly a decade ago, Algramo now finds its legs as companies from multiple industries come under immense pressure to go green.
A compelling way to reduce waste is to reduce the use of single-use plastics, which are of course common for everything from cleaning products to soft drinks. The difficulty is figuring out exactly how to do it without passing the cost on to consumers. If the product is environmentally friendly but costs twice as much, only the wealthy will buy it and those working on a tight budget will have to opt, against their best judgment, for the cheapest and worst option.
“People are deciding between their pocketbook or their planet,” said CEO José Manuel Moller. “So we needed to be cheaper and better. So instead of making things more complex, we are trying to make things simpler. “
The solution they have come up with after years of testing is a modified label for existing products, such as detergent or shampoo, which includes an RFID tag that allows the consumer to easily refill the bottle from a dispenser. Sold at wholesale prices and having removed the cost of packaging (30 percent of product cost, Moller estimated), it’s cheaper and requires nothing more than going to a different shelf in the store.
However, the big breakthrough was not the idea, it was the relationships with the big brands. If someone has to stop by your regular grocery store to refill their dish soap, they are more likely to just buy a new bottle. Likewise, if only the products offered for bulk fill are random off-brand, the same is true. So Algramo has had to present the case to the Walmart and Unilevers of the world, and very recently they began to listen, at least locally.
“This was going to happen with or without Algramo,” said CEO José Manuel Moller. “But we are integrating into their supply chains, working with retailers and the brand so they don’t disrupt existing relationships. And actually, ordering the product in bulk saves them about 60 percent of the space. “
There are agreements with Unilever, Nestlé, Colgate-Palmolive and Walmart Chile. By offering a turnkey solution that brings together big brands and big retailers and saves consumers a bit of money, everyone gets what they want. Originally, Algramo operated with a fleet of small vehicles equipped with dispensers, but eventually the retail avenue turned out to be the most successful.
There are now Algramo stations throughout Chile, with around 50,000 users returning to buy wholesale products. Those products, incidentally, were not determined by profitability, but by which is the worst polluter. The worst by far, Moller said, are the drinks, but the ones that present a different challenge, one the company is happily taking on but not quite ready to debut.
Instead, there are frequently used products like laundry soap and toiletries, even dog food (dry, obviously… for now). And Algramo was careful to make sure users can buy as much or as little as they want in bulk, making it more accessible to people who have to make every penny count.
The work in Chile has helped validate the idea on a large scale, and now the company is raising money before some pilots around the world. There are projects underway in Jakarta, New York, Mexico and London, all of which undoubtedly require a lot of local footwork, as different regulations, sub-companies and distribution networks will require new contracts and agreements in all the places in the trying to do a job. beachhead.
That’s what the $ 8.5 million Series A is all about: global momentum. It was led by Dalus Capital de México, with the participation of (deep breath) Angel Ventures, FEMSA Ventures, Volta Ventures, Impact Assets, University Venture Fund, Century Oak Capital and Closed Loop Partners’ Ventures Group (the latter of which led the 2019 seed).
Moller said there are parallel efforts along Algramo’s line, but that ultimately its platform may end up being compatible with the others. Owning both the brand and retailer relationships is paramount, then the customer relationships, but the last step can be tailored to different circumstances. For example, if there is a successful reverse logistics system (like common reusable food containers throughout India) that can be part of the solution, and if someone like a supermarket chain built their own hardware solution, Algramo would be happy. to operate, at least in part, behind the scenes. (In addition, they own several patents).
That’s quite a cake in the sky for now, as Algramo focuses on building its own presence in several major markets. If you are in one of the above locations, keep an eye out for your large local grocery or retail chain for the Algramo station, or just check the map at the bottom of their website.