Inside a laundromat in Stuyvesant Heights, Brooklyn, it’s now possible to buy standard cleaning products like Pine-Sol without having to buy a whole new container. Instead you’ll be able to bring your old container back, and refill it yourself. The location is one of the first to pilot a new system from a startup called Algramo.
The company first launched a variation on the service in Santiago, Chile, where it uses electric tricycles equipped with refill stations to make home deliveries of common brands of laundry detergent and dishwashing soap. After an investment from Closed Loop Ventures, a New York-based venture capital fund focused on the circular economy, it’s expanding to the U.S. “The goal is to get cleaning products and other essential items to consumers without creating the waste of single-use packaging,” says Bridget Croke, managing director at Closed Loop Partners, the investment firm that runs the fund and that is helping guide the new launch.
At the Brooklyn laundromat, as well as at two other pilot locations at the Brooklyn Navy Yard and in the Lower East Side, customers can use Algramo’s app and refillable containers equipped with RFID tags at a refill station to buy as much of a product as they need. When they need more, they bring back the package to get a discount on their next refill. The smart package is also linked with the app, so it serves as a digital wallet, letting you pay just by refilling. “A lot of people forget to bring their refillable container back to a store, and never forget to bring their wallet,” says Algramo founder and CEO José Manuel Moller. “That’s why we transformed the packaging into a wallet.”
The company doesn’t require customers to buy a full container of a product. (The name, in Spanish, means “by the gram.”) They wanted to avoid the so-called poverty tax, or the fact a small package of a product usually costs more by weight than a larger package, and lower-income customers end up paying more over time if they can’t afford to buy in bulk. In Chile, for example, customers buying some products in the smallest packaging spend 140% more than those who can afford bulk packages. “The cost per ounce is much cheaper when you get a bigger product,” says Manuel. “So that’s the first problem that we’re solving: You pay like in a gas station, the same price per liter or per ounce, independently from how much you purchase.”
The service is targeting lower-income consumers, not those who might be willing to spend more because they want to avoid waste. “We really want to be able to show is that this is a better model for people who are cost-conscious,” says Croke. “So while we think it’s something that will be really interesting for a higher income, plastic-concerned consumer, we’re far more interested in kind of democratizing these models and making them accessible to more people. And so the locations that we decided on were very intentional to be able to go after a demographic that’s not typically the first adopters in these kinds of programs.”
Algramo planned to launch in New York City later in the year, but accelerated the process because of the coronavirus crisis, partnering with large companies like Clorox and Colgate-Palmolive to provide standard, commonly available products. It wants to provide easier access to essential products like hand soap and sanitizer, and is in talks with large apartment buildings about adding refill stations to shared laundry rooms. The refill stations, controlled by the app, are fully touchless, and since consumers use their own container repeatedly, they also don’t have to worry about the package being handled by someone else.
The startup also wanted to respond to the fact that single-use plastic waste has been growing during the pandemic. “We really wanted to be able to show that there’s new models and better models refill and reuse,” says Croke. After the initial pilot, which is also happening at Brooklyn Navy Yard, it will expand throughout the city, add products, and begin expanding to other parts of the U.S.