This Chilean start-up is revolutionizing reusable packaging

A Chilean start-up is addressing the issue of plastic waste with smart packaging that enables people to “pay for the product, not the packaging”.

Santiago-based Algramo - which means ‘by the gram’ - is working with global consumer goods companies Unilever and Nestlé subsidiary Purina to drive what they call the refill revolution.

Through the Algramo app, users can order as much or as little product – be it laundry detergent, rice or pet food – as they need and get it delivered straight to their smart, reusable packaging at home.

The company has also launched refill vending machine pilots in Chile and more recently, in New York, US.

Circular economy key to addressing single-use plastic

Overall, we produce about 300 million tonnes of plastic waste each year, according to the UN Environment Programme – equivalent to the weight of the entire human population.

But only 9% of all plastic waste ever produced has been recycled – with 12% incinerated, while the rest has accumulated in landfills, rubbish dumps or the natural environment, says the UNEP.

Other companies such as Loop, MIWA and Muuse are all rolling out next-generation solutions that offer consumers, retailers, band owners and cities alternatives based on bulk dispensing and ‘packaging as a service’ models. Algramo is helping to address the problem of single-use plastic pollution by keeping unrecyclable containers in use as part of a circular economy.

It is one of 17 companies selected from more than 200 applicants for The Circulars Accelerator Cohort 2021, which is run in collaboration with UpLink, the World Economic Forum’s innovation crowdsourcing platform.

The six-month programme – which is led by Accenture, in partnership with Anglo American, Ecolab and Schneider Electric – helps circular innovators scale their solutions by providing them with tailored support and mentorship, and connecting them with industry leaders.

Smart technology

Algramo uses radio-frequency identification (RFID) tagged containers and internet of things (IoT) technology to deliver product ‘by the gram’ to customers’ doorsteps on an electric tricycle stocked with refills.

Users order whatever household products they need, schedule a tricycle visit and pay via the app. They can then refill their smart containers, eliminating waste and providing flexibility as to the amount ordered.

The Unilever pilot saw some customers refill their detergent bottle 15 times, with each refill eliminating the need to recycle or send to landfill a 135g plastic bottle – removing the need for just over 2kg of plastic thanks to one Algramo product, it claims.

“Throughout the pandemic, we have seen an increase in demand for our refill services and IoT-connected vending machines, says Brian Bauer, Head of Circular Economy and Alliances at Algramo. “We are now dispensing homecare, personal care and pet food in a manner that decouples packaging waste from consumption.”

Financial benefits for low-income customers

There are financial benefits too. Algramo was founded in 2011 after then-student José Manuel Moller moved to the outskirts of Santiago and realized that lower-income consumers were often unable to buy in bulk, forcing them to buy smaller amounts for higher prices.

Moller estimates that this meant they could pay as much as 30-50% more than the same product in a larger container. So he set up Algramo to supply small stores in poor areas of the city with vending machines dispensing household products.

The company has since expanded with its home delivery service, launched pilots with Unilever, Purina and most recently with Walmart and is now present in Santiago, New York and Jakarta.