A couple of weeks ago I wrote about Tearfund’s new report into burning plastic in the developing world. Unilever is one of the companies that the report singles out for its overuse of single-use plastics in countries that have inadequate waste disposal infrastructure. It also highlights some solutions, and Unilever’s partnership with Algramo is one of them.
Algramo is a social enterprise based in Chile that sells household staples in reusable containers. A certified B-Corporation, it was set up to reduce plastic use, and also to overcome a common problem in poorer communities: it is cheaper to buy in large quantities, but those who most need the discount can’t afford the higher up-front costs. Getting rid of packaging and organising sales by the gram solves both of those problems.
Algramo’s first venture was vending machines, installed in smaller local food shops. They were able to compete with the supermarkets on price, while sharing profits with the small business owners who hosted the machines. It’s a business model that reduces the power of the supermarkets and helps to reduce inequality. While plastic-free shopping could be seen as a middle class concern, Algramo deliberately chose to start elsewhere. “It would be easier for us to have started in a hipster area” says founder Jose Manuel Moller. “But we wanted people to know that Algramo is for everyone, so we started in one of the poorest areas to demonstrate that.”
A more recent venture is a refill service based around an app. Users download an app onto their phones, and use it to schedule themselves a visit from one of Algramo’s tricycles. These mobile dispensing units arrive at your home, and you top up with cleaning products, pet food or other bulk staples. This is where the partnership with Unilever comes in, as their Omo brand of washing powder is one of the leading product offers.
Where they are still common, deposit and refill networks are often seen as old fashioned and inconvenient, and single use plastics are marketed as the aspirational modern alternative. Algramo’s use of smart packaging says otherwise. The re-useable tubs and bottles have an embedded chip that communicates with the app to log what is being refilled, and there are a number of benefits. One is that it provides cashless transactions. That makes it easier and quicker, and it’s also safer for the tricycle drivers if they aren’t carrying cash on them. By connecting dispensers and packaging through the ‘internet of things’, the company can see what is being bought where, see how many times their refill tubs are being used and offer discounts for repeat customers. Connectivity creates efficiencies that keep costs down.
Algramo are an ambitious company with a proven model that saves money and builds a circular economy. They recently expanded into Colombia, and they have an eye on the drinks market. They may be one to keep an eye on, and if they don’t expand into Europe anytime soon, somebody else might want to take inspiration from what they are doing. Refills in Britain are more expensive, not less. They are found in trendy market towns and in the upmarket Waitrose supermarkets.
Like organic food or electric transport, plastic free shopping is being targetted at wealthy consumers, as if ethical shopping is a luxury. The approach is epitomised by Loopstore, which launched its home delivery refill service with Haagen-Dazs ice cream at the World Economic Forum in Davos. Algramo show that it could be different. Refills can be high-tech, aspirational, cheaper and accessible to everyone.