October 15, 2019

This Chilean startup could help US consumers use less plastic

A Chilean startup called Algramo is expanding its successful bulk-buying program, which is designed to reduce the burden of excessive packaging costs on low-income buyers.

Algramo / Indiegogo

The Chilean bulk goods startup Algramo announced plans to expand to the US in 2020. 

The company, which sells basics, from rice to laundry detergent, in reusable containers and “by the gram” (hence the name, Algramo), partners with huge brands like Unilever and Nestlé.

Founder José Manuel Moller created the company in part to help mitigate the effects of excessive packaging costs — often called a “poverty tax” — on low-income buyers. Buying things in small formats and not in bulk typically causes prices to increase 30% to 50%.

Lower prices and convenience encourage users to refill bottles

Algramo products, sold on the shelves of about 2k bodegas in Santiago, are often 30% cheaper than competing products at Chilean Walmarts — and the company incentivizes customers to keep reusing their original container by dispensing an 11% discount on each subsequent use.

The company, which has been around for 6 years, says customer reuse rates have increased from around 10% to more than 80% over time. 

Algramo has also rolled out mobile, electric refill stations that meet customers at their doorsteps.

Companies like Algramo can help address the global plastic crisis

A recent study found that, of the 8.3 billion metric tons of plastic that has been produced, 6.3 billion metric tons of plastic waste had been generated by 2015, and only 9% of that had been recycled — and that half of all the plastic made becomes trash in less than a year. 

If companies like Algramo and Loop — which delivers home goods in reusable containers and launched in the US this year — are widely adopted, they could help slow the production of plastic, which has doubled every 15 years.

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