Chilean Circular Economy Pioneer Poised for Expansion

Pay for the product, not the packaging. Start filling bottles, not landfills. These are just a few of the value propositions Algramo, a Chile-based company, has introduced in recent years. In business for a decade, Algramo is a circular economy game-changer … and still very much on the rise.

Algramo provides a self-service, cashless way to buy big brand cleaning products in a more sustainable way. Algramo stations – which are smart dispensing systems, similar to vending machines – are set up at retail locations, including Walmart, throughout Chile. The process is simple: users download an app, charge their account, bring their reusable bottle to an Algramo dispenser and then select how much of a cleaning product they wish to buy.

Having just secured $8.5 million in funding from Mexico’s Dalus Capital, with participation from Angel Ventures, FEMSA Ventures, Volta Ventures, Impact Assets, University Venture Fund, Century Oak Capital and Closed Loop Partners’ Ventures Group, Algramo says it will launch pilot stations around the world.

Projects are already underway with retailers and distributors in Mexico, Jakarta, London and in New York locations to set up new stations. Algramo’s supply chain management initiative requires careful handling to promote its sustainable, bulk-refilling solution while also not upending existing supplier-retailer relationships.

Algramo’s initiative and distribution model captured the attention - early on - of some consumer packaged goods (CPG) giants, like Unilever, Nestlé and Colgate-Palmolive. As reported in a recent TechCrunch article, Algramo, in its early stages, had to make the business case to the big retailers and consumer grands of the world to provide bulk products in refillable containers to help consumers, the planet and these companies’ bottom lines. Recently, these large corporations have started to listen and respond at a local level – and have partnered with other companies to launch similar services in the process.

In the interview with Techcrunch, Algramo CEO José Manuel Moller said, “…we’re integrating into their supply chains, working with the retailers and the brand[s] so they don’t disrupt existing relationships. And actually, ordering the product in bulk saves them about 60 percent of the space.”

In addition to saving space by offering reusable bottles, any packaging costs, which can range from 10 to 30 percent of the product cost, are removed.

The result is a scalable way to bring together big brands and big retailers while saving customers money and mitigating single-use plastic waste. When customers refill their “smart reusable packaging” at an Algramo dispenser, they are rewarded with increased savings.

To date, Algramo’s funding has totaled about $11 million. This invested capital is supporting three key socially responsible investment themes: Climate innovation through mitigating plastic waste; business productivity by offering a circular economy solution; and improving consumer accessibility by promoting inclusion and enabling consumer access to better priced, big brand products.

Once the pilot stations launch and if they operate successfully, Algramo can will be able to prove that its circular economy model performs well – even within the well-established, albeit ripe for disruption, retail and CPG sectors. The success of these global stations could increase Algramo’s valuation and should help to attract additional funding in the near future. Then, perhaps within the next several years, Algramo stations will become more prevalent, offering more consumers better priced goods in a way that significantly reduces plastic waste.

This could be a likely win for everyone involved.

Image credit: Algramo/Instagram