Sydney-based startup Bearhug has announced that it will scale its supply of reusable pallet wraps across Australia to eliminate single-use plastic from FMCG supply chains after closing a $325,000 funding round just 18 months after launching in January 2023.
Five years as a truck driver saw Tom Field left frustrated by the amount of plastic being wasted on a daily basis, which motivated him to found Bearhug Pallet Wraps Pty Ltd alongside his co-founder and friend from university Max Higgins.
Since launching in January 2023, Bearhug has sold just over 500 reusable wraps and made approximately $65,000 in revenue.
Its current team consists of five employees, which includes both Field and Higgins as the main founding team who focus on the strategy and sales side of the business, besides two employees in marketing and one on the product side who manages all the wrap conversions, repairs, improvements and prototypes.
A Bearhug reusable pallet wrap saves 350kg of plastic waste, equivalent to nearly 30,000 plastic water bottles, from entering landfill and the startup’s reusable wrap has a 1000-use lifespan.
Speaking to SmartCompany, Field said the Bearhug team was stoked with the outcome of the funding round.
“The main thing is that we wanted to have that out of the way so we can just focus on actually building the business and servicing our customers, rather than pulling around for funding,” he says.
“It also just means we can get underway with a few of the projects that that funding is intended for.
“We didn’t invent the reusable pallet wrap; it’s been around for a bit. We just feel it’s completely underutilised.”
The company, which is based in the Sydney suburb of Belrose, has revealed its next steps are expanding up to Queensland, with Field confirming that Bearhug had already started setting up in Brisbane.
Bearhug is also building the world’s first ‘pooling model’ for reusable wraps where, just like pallets, they can be exchanged or transferred between businesses, and collected from the end user.
“Over the last two years of operating, we’ve found barriers associated with people moving away from single-use pallet wrap to a reusable version,” Field told SmartCompany.
“The main barrier there is the return logistics.
“So if you’re sending a reusable wrap out on a pallet, we offer this subscription model which allows you to send them between businesses, but we also need to take an active hand at some points when the wraps get to the end of the supply chain to be the ones to pick it up and get it back to the next user.”
Field said the company would mainly use the funds to help Bearhug to scale its logistics networks.
“Now we’re set up to collect and deliver wraps in Sydney and Brisbane, and the surrounding areas,” he says.
“The other sort of main use of funds is in building automation systems.
“Any larger company we talked to, very much (at the) top of their list is removing the labor involved in wrapping pallets, and most of them have automated pallet wrappers for plastic. So we’re building the same for reusable.”
Bearhug, which is on a mission to replace the world’s 2.8 million tonnes of annual pallet wrap waste with reliable systems for the movement of reusable alternatives, recently joined the ANZPAC Plastics Pact, who are focused on building a circular economy for plastics across Australia, New Zealand and the Pacific Islands.
Field confirmed that Bearhug sees this as an immediate step in its expansion, allowing businesses in New Zealand and the Pacific Islands to reduce their pallet wrap waste.
The co-founder also spoke with SmartCompany about his time as a truck driver prior to launching the company.
“I was just driving small trucks from the second I left high school and that was delivering out to pubs and bottle shops for a craft beer transport company,” Field says.
“I was there for five years and that meant churning through half a kilo of plastic every single day through that whole time.
“So what we did there was just bought a bunch of reusable wraps in, made some prototypes as well, and did a bunch of testing there. That transport company that I worked for was the first customer.
“The industry we’re focused on, or had been for a while, is craft beer and that’s where the vast majority of our customers are from as well.
“So definitely being in that industry has influenced where we’ve had our early growth.”
While Bearhug started out selling exclusively to craft brewers, the startup has since expanded to service any business that wraps pallets, with Field confirming that more than 70 businesses are now onboard.
“Mostly brewers, but we’ve seen in the last six months and we’ve done a bit of a change around the marketing and rather than just having images of craft brewers, pallets of beer wrapped in the wraps, we’re now expanding out to sorts of all other industries,” he says.
“(We’re) seeing a bit of take-up from medical supply companies, distilleries, wineries, general fast moving consumer goods, packaged goods and food.
“So it’s applicable for any industry.”
Field added that Bearhug is calling for businesses to take accountability for their plastic use.
“Our real goal now is, we’re sort of getting towards finalising a lot of trials and pilot studies with some of the bigger companies in Australia,” he says.
“So what we’re really looking for is for them to sort of make that leap and implement reusable wraps just for a fraction of their operations, just for moving between the different warehouses to moving within their own warehouses.
“Even though that might only replace a fraction of their operation, it’s still a far better option than the other alternatives available, mainly being plastic.
“So really looking for some of the bigger companies to get on board just for those smaller segments and then sort of keep ticking that up by moving to our pooling model and expanding that out to other parts of their operations from there.”
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