Last week, Zero Co made headlines after breaking a ream of records for its $11 million equity crowdfunding campaign — mere days after announcing it had secured $6 million in venture capital funding from Square Peg.
The raise follows on from its initial 2019 campaign, where Zero Co’s pitch was to remove one million plastic bottles from the planet by offering reusable, refillable cleaning products delivered to its customers’ homes.
But founder Mike Smith quickly realised the single-use plastic problem is deeper and more complex than just the end product purchased.
As he tells SmartCompany Plus, “We were so focused on solving the single use plastic problem, and building this solution for everyday Aussies to get rid of single use plastic across their everyday cleaning products.
“But as we got into building out what that supply chain looks like, we started to understand how much waste there is across the whole supply chain,” says Smith.
Small businesses have some advantages over larger entities when rethinking waste. In Zero Co’s case, the company was starting from scratch and could therefore make better decisions early.
But as with any other startup, you have to learn by making mistakes. It wasn’t until nine months after the company was launched that it put in processes to sort out rubbish in its own office. That meant isolating paper, compost, glass, hard plastics, soft plastics, and general waste.
As Smith says, “It’s been an incremental process”.
Be mindful of the problem. Only by accepting there is waste in your business can you tackle the problem.
Look for easy wins for reducing single-use plastic. If you ship goods, don’t use plastic tape. Replace box fillers with sustainable options.
Many warehouses need to have stacked pallets wrapped up as an OHS requirement. Consider changing your wrap supplier to a plant-based or recycled option.
If you have an office and you’re printing out emails, cut the unnecessary ones out.
Put in place a full recycling system in your office. Sort out the paper from hard/soft plastics, compost, and waste.
Be cautious with international marketplaces where you can’t verify the supply chains. Rely more on word-of-mouth, and complete your due-diligence. Visit factories where you can.
Local supply chains involve less carbon emissions simply by cutting out freight, but you need to audit your local suppliers too. Again, being local helps here.
Sometimes, you’ll need to come up with new solutions. Work constructively with your partners. Many will be interested in working with you, but it will take time.
When you take third-party companies and their salespeople at their word, there can be a disconnect between what is claimed and what’s happening on the ground.
Zero Co was sourcing products from an international supplier that claimed it was collecting ocean plastic and making bottles for Zero Co using that same plastic.
“We had issues being able to authenticate their supply chain, and get documented evidence of the supply chain, the ocean clean up, and the bottle manufacturing,” says Smith.
Considering its Kickstarter campaign promised products made from ocean plastic and turned into reusable bottles, this was a big issue.
So Zero Co decided to build a new supply chain from the ground up in Australia.
The company has now done a number of its own ocean cleanups in Australia. Smith says they set a record for the longest underwater ocean cleanup, including one diver that spent over 24 hours underwater in Sydney harbour, who pulled up 250kg of of rubbish from the ocean floor.
Its team also spent three days at K’Gari Island (also known as Fraser Island), pulling 500kg of rubbish from the beach.
After sorting out the plastics from the waste, its sent to local recycling facilities and mixed with other waste plastics.
Zero Co has changed its marketing and claims around the products: its Forever Bottles are now made from what it calls “Ocean, Beach and Landfill Bound Plastics”, or OBL.
But it’s a big engineering challenge to mix the two. Ocean plastics and landfill plastics haven’t previously been recycled together in Australia locally.
“It’s been a nightmare. It’s been really hard trying to do something that’s never been done before,” admits Smith.
It has had to test different compositions to make its products, starting from as little as 5% OBL plastics to hit its goal of 100%.
At the time of interview, Smith said the company was on its way to releasing a product that was 50% OBL to the market. That’s still 50% virgin, or new plastic. Zero Co says that it has had success testing the 100% OBL versions of its bottles, but they are yet to hit the market.
The second part of Zero Co’s model involves refilling the bottles from pouches delivered to your door. The thin plastics use much less materials than the thicker, hard plastic bottles, and therefore reduce the overall plastic needed once you refill.
The company also collects the soft plastic refill pouches to be cleaned and refilled.
It’s little steps that get you closer to the end. A great first step is to try and localise all your supply chains.
“It’s tricky, and very challenging to do that. But we think it’s the right thing to do,” says Smith.
“And it just inherently gives us better control because we can get the car or get in the plane pretty quickly and go and visit them.”
That helps, because doing your due diligence on your suppliers means being on the ground in the sites that make your products, talking to their staff and seeing how things actually operate.
By thinking like this early in your business journey, you can create a robust auditing process that is used for every supplier.
One of the biggest shocks for Smith came from visiting warehouses and seeing the prevalence of plastic wrapping on pallets during storage, all single use, as part of an OHS requirement to improve safety for items stacked on shelves.
If you can get your supplier to swap virgin plastics for either recycled, or plant-based plastic options, it’s an easy win.
“We’ve been fortuitous, because we are starting from scratch and building our supply chain, and asking how do we cut out as much waste as we can before building it?
“It’s easier for us to do than say, Unilever,” says Smith.
Almost all of its products are made in Australia now, with its liquids being produced through a family owned facility on the NSW Central Coast, in Terrigal.
You have to accept you can’t be perfect though. In Zero Co’s case, the dishwashing tablets are made in France, and its pouches manufactured in China.
When I ask Smith, he tells me it’s a deep philosophical decision that keeps him awake at night.
His position is that to solve the plastic problem, we need to stop using single-use products altogether, and fund ocean cleanups to remove plastic from the seas.
“The reality is that both of those two things require money. My perspective is that the best way to solve a big global problem like this is a market based mechanism.
“If we can monetise the cleaning up of the oceans without relying on charity or goodwill, we’ve got a chance to scale it out and solve it.”
Paul Brescia is the coordinating editor of SmartCompany Plus.
